Question12/19/07
Dear Steve,
We’re a two car family, and have recently decided to junk my wife’s 1997 Ford Escort wagon after the estimated cost for more repairs would’ve far exceeded the market value of the car. Now we have only my 1990 Nissan Sentra between us.
We’ve done a lot of research looking for a new car that would be reliable and safe (Consumers Reports, Edmunds.com, etc.), besides asking other people’s opinions who are in the know about such things, and had narrowed it down to either a 2008 Toyota Matrix, or Honda Fit Sport. We test drove both, and surprisingly I liked the way the Fit handled much better, as well as it having many standard features (that would’ve been optional in the Matrix), and all at a much lower price.
My questions are mostly about “swimming with the sharks”, i.e., putting up with the dealers. In your opinion, is this the best time to buy, or should we wait until after the holidays? Consumers suggests we go along with the dealer financing to better negotiate a deal up front, then tell them “we’ve changed our minds” about their financing in favor of a third party’s lower rate, and thus avoid what they call “backloading” their deal. Presently, we have $10,000 to pay for the loan, but would have to finance the rest (say like $7,000). Right now this has been a stalemate for us, as we’re trying to review what options we do have available to us.
Questions: 1) Do you recommend looking for a 0% credit card? 2) Is it wise to borrow against our life insurance policies with Metlife, of which we’ve been paying an average of $500/mo. for over the last 20 years (BTW, I’m 56, she’s 59)? 3) Take out a second mortgage? We currently own our own home and payed the mortgage off in 2001, but the property taxes here in north Jersey are killing us (approx. $10,000/year).
Any other suggestions or advice you would care to share with us would be most welcomed and appreciated. Thank you.
Answerhi,
i personally like the Matrix. Toyotas are less expensive to service and repair then the Hondas..as far as how to finance the car, the line of credit you can deduct the interest on your taxes (assuming the bracket is high enough---that question take to the accountant). None of the ways you have mentioned have pre payment penalties, so if you can use your own financing that is good...sometimes the dealer financing is better, but get your price as if you were paying cash with no financing..Let me know if you have any other questions. Have a great holiday!!
Steve
