T Nation

Buying a Used Car


#1

Background:
Let's say I've been driving the same car since I turned 16 (now 25) and it has lasted til now. I was given a 1995 Nissan Maxima with 82k miles when I turned 16. I think we got it for $7200 at the time. Car ran great for as long as I can remember. Had a few O2 sensors go bad, replaced spark plugs, did breaks a few times, fluids, filters, tires regularly, etc.

And then in my last year of college, my car repeatedly got broken into. Let's just say I was left with only about half of my dash. And then a lady hit my car causing $1000 in damage, and I had to use the insurance check to pay rent for a few months. I ended up using a rubber mallet and suction cup and doing a decent job fixing myself (but not perfect).

From my senior year of college, to now, I really haven't had money to get a new car. I also didn't care about maintaining my current car as I looked at it was a beater car by now. It slowly started running badly, but running. It still gets me A to B. In the last 3 years I have only put $1000 into the car including maintenance and repairs.

I change the oil when I remember, which is maybe every 3000-6000 miles? (yes, I know bad). I haven't changed any other filters, and I know I could use new spark plugs and probably coil packs. I've bought "used tires" 3x at $80 for all 4. I've had to replace a control arm due to a pothole, 2 batteries, and a power steering pump.

Other than the above, the car still ran, despite the lack of even simple maintenance. Long story short, its a tank. I've been driving with a bad wheel bearing for probably a year now, and it finally gave out. I am going to replace the whole front knuckle with a used part from a junker.

Time to get a new car:
So I am looking at getting a new car in the next couple months. I am finally in a financial situation that will allow me to afford a car payment (recent job promotion). To put it simple, I do not want to buy some Econobox, nor am I trying to get a car out of my means. With the experience and trust that I have with my Maxima, I am thinking of going for another. This is where my question comes in. I would have to finance the car.

When I first got out of college, I was turned down for car financing saying that I didn't have enough credit or job history. I was trying to get a 2000 Maxima that was $10,000. However, they approved me for a 2008 Pontiac G6 brand new, which I did not want.

I now have 3 years job history, but in the time being, I did incur 1 bad credit incident (which should be handled by time I go to buy a car). I don't know my actual credit score right now though. Other than student loans, my only other debt is a credit card that I am sitting at about $1000 balance and a $1500 credit limit. I plan on paying this off by the end of the year.

My financing options, I assume, would be
1) from the dealer
2) from my bank
3) from a credit union

I've been told the best bet is to sign up for a credit union and try to get a loan through them.

On a used car, what kind of term and interest rate would I be looking at? I would assume that it would depend on the year, mileage, price of the car, etc. I had played with a car loan calculator and decided I don't really want to spend more than $250/month on a car payment. I came up with these options, and used 7% and 9% interest rates.

1) $12,500 loan at 7% interest for 60 months = $247.51/mo
2) $12,000 loan at 9% interest for 60 months = $249.10/mo

  • This is assuming they would do a 60 month loan for a used car. If I go this route, I would be looking for an 2004-2006 with 60k or less miles.

3) $10,500 loan at 7% interest for 48 months = $251.44/mo
4) $10,000 loan at 9% interest for 48 months = $248.85/mo

  • I would really only go this route if a 60 month loan would not be approved, but the age/mileage of the car would go up slightly

5) $8,000 loan at 7% interest for 48 months = $191.57/mo
6) $8,000 loan at 9% interest for 48 months = $199.08/mo

  • Obviously the age/mileage would go up quite a bit, but I would not buy with more than 100k miles. Would I even be able to get a 48 month loan for this?

7) $8,000 loan at 7% interest for 36 months = $247.02/mo
8) $8,000 loan at 9% interest for 36 months = $254.40/mo

  • Probably more reasonable than 5&6 in the term of the loan I would think, but I don't know. Also, key in point, 5-8 would be cheaper to insure by about $50/mo.

Also, aside from the financing aspect, what are the thoughts on buying a 2004-2006 with 60k miles vs a 2002-2004 with 80-100k miles? I feel like with the first option, I won't really have to worry about repairs, or maintenance, but I'll be paying more on the total loan, as well as probably more per month, and higher insurance. On the second option, I may have to put some money in small repairs, but the car payment and insurance would be less or would be paid off sooner.

Any input is greatly appreciated as I go off to the junker to get a part for my sweet 95 Maxima with 170k miles riding strong despite not getting any love.


#2

I think the first thing you should do is to get a copy of your credit report and your score.


#3

Look for financing in this order:

Credit Union
Bank
Dealer

The only time I would look at the dealer first is on a new car where the manufacturer is subsidizing the rate.

Keep in mind, many banks aren't going to give you an auto loan for a car more than 5 years old, although they may give you a personal loan depending on your financial situation.

Personally, I would take an older car with less miles over a newer car with more miles, but that's your personal preference. A car with a transferable warranty would be best.


#4

My 89 Honda drives like a boss. My only advice is if you do buy anything used from someone and not a false is to perhaps spend a couple bucks to get it inspected by a licensed mechanic. I would honestly look into a Toyota or a Honda. They really do last but the resale value is a bit ridic.


#5

Actually, most conventional oil is not needed to be changed every 3k miles any more.

5-6k is recommended.

If you use something like Mobil 1 Syn you can get away with every 8k or so, and they also have a 15k mile oil I use. No sludge build up.

Though, be sure to change the filter at least 1 in between long stretches.

forget financing if at all possible, pay cash.

That's what we did. We needed an SUV and while a somewhat newer 4Runner would have been great, our budget allowed for about $6k (cash) SUV.

We picked up an 01 Jeep Cherokee w/100k miles which are built like tanks, for $4200 cash.


#6

Fuzzyapple, believe it or not, I think you replied back to my thread 3 years ago when I was thinking of getting a new car, and I decided to keep riding out my Maxima. I'm at the point where its time to retire it. I think I could get a grand for it, which will go towards a down payment, plus some other cash I will put towards it.

I'm attached to a Maxima, as like I said, I have not put any real maintenance into the car in over 5 years and it still runs. I drove it on a bad wheel bearing for almost a year. It misfires. I have no radio. AC is dying. But it still runs.

Now I don't plan on abusing a new car, but the series of events that happened to my car just gave me "I dont care" attitude. Of course which I would not take on with a newer car, one that I am financing, etc.


#7

I have a Honda Accord with 200,000 kilometers on it.

I brought it to a Honda mechanic the other week for an "E-service" - a comprehensive inspection of the whole car - and was told that there was literally not a single thing wrong with it. He said I could reasonably expect 450,000+ km out of it if I maintained it well.

I don't even treat it that well...I'm a big fan of jackrabbit starts and rapid stops. I drive the hell out of it and it asks for more.


#8

I like Nissan actually. They're not as expensive to buy, fix, or maintain as a Toyota or Honda and the one I've had (Altima) has been very reliable. My other car is a 2006 Mazda 3 and it's been good to me so far as well.


#9

I would really only have max $2k to put down (with half that being what I would sell my car for). I rent (don't own) and getting a new car has been next on my list for quite some time. I just put it off and ride the old one out. It's time to move on.. and financing is really the only option.


#10

then buy a $2k car??? I know, not what you plan.

For example, we have a '96 T-Bird w/160k miles and would sell for $1500 and it runs great. so decent cars can be had for your budget.

Just don't get a brand new car, such a waste of money. Slightly used would be your best bet if you must finance


#11

Agree.. I don't want a "new" car. I would go slightly used. I'm not jumping right on it right away. I had been planning on beginning of 2012, but with the recent breakdown, was considering maybe October.. but I guess I'm not in a rush. I just wanted some input from anyone who has experience because I've never been in the position to buy a new (to me) car.


#12

In danger of sounding like your mom, I think it's crazy you would consider throwing away a working vehicle and getting stuck with a monthly payment when you have unpaid credit card debt -- especially $1000, which says to me you don't have much in savings.


#13

If you've been riding around in a junker for this long, unless it has more serious problems than you can tolerate, may as well keep driving it until it fails. If you do end up selling it or getting a piece of it back as part of a trade in, it probably won't be enough to make up for a few months of newer car payments. If you figure it in as part of a trade-in, the dealer would just figure it into the total price of your purchase, so you wouldn't see that money anyway. Even if you negotiate well with the dealer and it seems like you are getting a good deal for the trade-in, they might use that to entice you to buy as opposed to actually dropping the sticker price of your purchase (so the sales taxes would still be just as high).

Also, I was in a similar situation a few years back. Had an old Pontiac Grand Prix that got me thru college and the first few years of my professional life. Put 250K miles on it with very few problems. Then I bought another Grand Prix thinking it must be a great model of car. The newer Grand Prix gave me tons of problems over the years. So, based on my experience, I wouldn't necessarily be on the hunt for another Maxima just based on the durability of your old one.


#14

Finance through a credit union. I actually refinanced my Durango to my credit union because they offered me 5%.


#15

Well, its a working vehicle, but case in point, I never know when its going to break. So either I am proactive about replacing it, or I wait for it to break again, and either fix it again and keep it, or fix it (sell it) and get a new car, or just get a new car.

But you're right. I have $1000 on a cc that NEEDS paid off, and will be paid off by the end of the year. My plan was to wait til then to get a new car, but with the recent breakdown, it made me think otherwise.

I guess I'll see what happens in the next couple months


#16

Oh, and let me clarify.. it is a working car, but to get me from A to B and back home again. I would never drive more than 30 mins away for fear of getting stuck there, hah.


#17

If you have $2k cash, settle your debts now, IMHO.

If the car is working, then keep using it while keeping it maintained until you save enough to buy a car without financing. Paying things off SUCKS.


#18

Good idea to wait until the CC is paid off.

Right now, you're freerolling with the used car; it's not going to lose any more value no matter how much longer you drive it.

I had a bad wheel bearing on my 3500 series truck. New wheel hub, $175 (autozone prices) + $40 labor to have it replaced. A Maxima wheel hub should be significantly cheaper.

Also, going by the dollars you're looking to spend, you're either looking at getting an econobox or a car on the cusp of the large maintenance schedule.