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.