Buying an Old Car

Quote: AZDuffman

Most do not understand affording the payment <> affording the vehicle. People, soldiers, making $30 grand a year taking payments of $400+ per month as "no big deal" so they can have a BMW, Mini-Cooper, Escalade, whatever. They don't grasp how much more insurance and maintenance is on this kind of vehicle. People thinking their 610 FICO is "not that bad and it has been going up" so time to get a huge loan.

My ex-wife got me into this. To me, interest is up there with AIDS and Bills fans on my list of things to avoid. Interest offends me greatly, so I never, ever used credit. She got me onto it because, well, you kind of need it. And it was good. My score was in the mid to high 700s and I had no debt. THAT'S what got me into that big truck.

And then the bike.

And then the ATV.

And then unneeded house upgrades.

And then the truck exploded.

To her credit, she was sort of a magician. She kept juggling debts to low or no interest loans and cards and kept us happy as pigs and financially worry free. But when we got divorced, I got a $40,000 surprise.

Been clawing my way out ever since. Very pleased to say that other than my $9k truck note, I should be completely recovered within a few months. This truck advice is just making sure that I am ;)

Quote: AZDuffman

I'm more anti-idiot than anti-business. Answering phones all day will jade you at perhaps 50Xs the rate of someone in a dealership by simple volume. Some think they have or should have a 3 day or more right to cancel. Most have no clue of what negative equity is and how it buries you. Most do not understand affording the payment <> affording the vehicle. People, soldiers, making $30 grand a year taking payments of $400+ per month as "no big deal" so they can have a BMW, Mini-Cooper, Escalade, whatever. They don't grasp how much more insurance and maintenance is on this kind of vehicle. People thinking their 610 FICO is "not that bad and it has been going up" so time to get a huge loan.

We would talk before shift or on break and ask, "Doesn't anyone drive junkers anymore?" The average car loan is somewhere near 66 months now. Then there is leasing for when you really want to drive a car beyond your means!

I agree with your second to last sentence. One thing counts in this life---GET THEM TO SIGN ON THE LINE THAT IS DOTTED! Nice guy? I don't care! Good father? GO HOME AND PLAY WITH YOUR KIDS!

But--------the average car buyer is too stupid or lazy to learn any of this.

We agree. But I take a more reasoned view. I like my customers, and I think they have the freedom to make whatever choice they want. I won't judge them; I'll let them judge themselves, if it comes to that. If I started thinking badly of them I would become ineffective at my job.

Regarding leasing, it is smart to crunch the numbers. I've leased 3 Nissans in a row. With the huge subvented residual and the factory rate buy down, the total of the payments is less than the real world depreciation over 3 years. It is cheaper to lease than it is to pay cash.

Negotiation, and sales, is hard because it is emotionally hard. You don't have to be smart, and you don't have to be strong. In fact, the smarter you are the harder sales is. You have to be able to take a lot of no, and turn it into yes. It helps to have a great attitude. When I learned this business, I was in training for two solid weeks, 8 to 10 hours a day, and every day we faced a big sign that said:

MENTAL ATTITUDE! KEEP YOURS POSITIVE!

To this day my attitude is mine, and no one is allowed to change it. Ever. If I get down, it costs me money. Got to keep your eyes on the prize.

AZDuffman, for as different as we are, I bet we'd get along pretty well.

Quote: Mosca

We agree. But I take a more reasoned view. I like my customers, and I think they have the freedom to make whatever choice they want. I won't judge them; I'll let them judge themselves, if it comes to that. If I started thinking badly of them I would become ineffective at my job.

Some of our members (customers) were great, but even the great ones could drive you buggy. As much as I respect members of our military I swear there is not a group less financially aware on earth. When half of them need their income for the loan app they need to go and ask someone. However, lots were simple fish on the car lot. Many came from little money and just jumped in over their head.

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Regarding leasing, it is smart to crunch the numbers. I've leased 3 Nissans in a row. With the huge subvented residual and the factory rate buy down, the total of the payments is less than the real world depreciation over 3 years. It is cheaper to lease than it is to pay cash.

My biggest problem with leasing is that you walk away with nothing at the end of the term. I had a worker who married late in life so they kept individual financial lives. She was going to lease some kind of SUV, I forger which but high-line. Range Rover maybe. So she says she is going to lease for 5 years. When he asks what she will do at the end of the term she says she will buy it with a 4 year note. He was flabergasted! 9 years to pay off a car! If that isn't driving what you cannot afford I don't know what is.

Another uneducated customer lease story! My brother was buying an Explorer and had to wait while they got stuff for the deal together. Behind him was a girl and her dad, finalizing a deal. Her salesman had the day off so another guy was writing it up. He looked at it and said he could turn the lease into a sale for $4 a month more, same term. The father lost it and REFUSED! The salesman couldn't believe it, but the guy accused him of jacking the payment.

So that is the kind of stuff that drives me nuts. Not that I care but just crazy.

Quote:

Negotiation, and sales, is hard because it is emotionally hard. You don't have to be smart, and you don't have to be strong. In fact, the smarter you are the harder sales is. You have to be able to take a lot of no, and turn it into yes. It helps to have a great attitude.

Negotiation is its own skill. The ability to walk away is the most important thing. What I can't believe is how crazy car negotiations get. I've heard of people being at dealerships until midnight. For a car! Now that is one stuck buyer.

The story I tell about my brother is my favorite way to handle it. I gave him all the Black Book numebrs he needed and explained how to use them. He went to the dealer and they gave him all the usual nonsense so he shows the number and says. "Look, all I am asking is the middle on the purchase and the trade." Salesman gets deer-in-headlights look and admits he did his homework so he goes to the "sales tower." After the second trip back my brother informs him the next trip there will be the last, meet the number or he moves on. They met it.

Most people, however, don't research a thing. Then they wonder why they are negitive equity car after car....

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AZDuffman, for as different as we are, I bet we'd get along pretty well.

Probably. What some folks online do not get is that I have my positions but can separate that from getting along. Just don't push a lease if I walk on your lot................................ :-)

Leasing, financing, and paying cash are just financial tools. Apply the right tool to the right job and you get satisfied repeat customers. If a customer is on a 3 year cycle, and likes new, lease might be a good choice, like for me. But not for you, because we are different. That's all. The good salesman learns the differences among the customers and caters to them. Everyone who buys does it because they are satisfied.

Quote: Mosca

Leasing, financing, and paying cash are just financial tools. Apply the right tool to the right job and you get satisfied repeat customers. If a customer is on a 3 year cycle, and likes new, lease might be a good choice, like for me. But not for you, because we are different. That's all. The good salesman learns the differences among the customers and caters to them. Everyone who buys does it because they are satisfied.

You are correct on the financial tools thing, my issue is more that so many people trade too often. There are folks who need a certain prestige of automobile, others just are not motorhead enough like say Face and myself to be able to live with some of what older cars need. I'm not blaming the salesman, more blaming what some people have let society tell them they need in a car.

Yup, different we are. If you can get me an insider deal on a Mazda late next year let me know.

Quote: Face

This was my most considered plan. I've no issue making payments and actually plan to pay $100 - $150 more a month soon, as I'm freeing up some cash and want it paid off faster.

I think the thing that's got me all in knots was what happened to my Dodge. Not only was I a few grand in the hole from depreciation, but the engine assploded just 2k miles passed the warranty. If you toss in all the repairs for that, that $2k in the hole grew to $8k. I've been digging myself out of that hole for going on 4 years now. I guess I've not yet rid myself of the fear that incident caused and worry about it happening again due to the age of my rig (even though the truck is solid)

What about the other option - downgrading? I though buying a 10yr old+, $5k truck would get me out of my hole immediately, but I suppose I'd then have the worry of trading one, 120k mile truck that's solid for another 120k mile truck that's unknown. Think that's too much a gamble for the ~$3k I might "save"?

My '96 Neon's head gasket went AWOL about one month out of warranty. '90s Neons / Cirrus / etc were notorious for this, and man, I was pissed. There was a TSB on it, but no recall. The repair was $1800. So, I paid the bill, wrote a letter to Chrysler asking them to reimburse me, that I was a life-long Chrysler guy, and so on. They wrote the check.

I would have done the same with your Dodge... there's no harm in asking.

My problem is that I am not exactly a mechanic. I know enough to research and figure out what my car problems are but I don't have the wherewithall to fix it. I used to do my own oil changes, but that's about as savvy as I would get with a car. And frankly, new cars are almost impossible to service beyond a fluid change out anyway.

And I agree with Mosca's words. I went 20+ years of driving without a new car, buying used, from friends, etc. In 2008, I decided that I wanted new and ended up with my Civic which I love. The same decision came up again in 2014, and the prospect of research and buying used frankly is more daunting to me than buying new, more so for my wife. We wanted more luxury because we drive alot of miles and our bodies are getting older. There isn't much in the way of prestige for me... I could finance myself into a Mercedes if I wanted to or a sportscar... it's a mix of practicality and luxury because we spend so much time driving.

We get that we lose thousands in value as soon as we walk off the lot, and that we are suckers for buying new. But look at it this way: someone has to buy new cars.

Quote: boymimbo

My '96 Neon's head gasket went AWOL about one month out of warranty. '90s Neons / Cirrus / etc were notorious for this, and man, I was pissed. There was a TSB on it, but no recall. The repair was $1800. So, I paid the bill, wrote a letter to Chrysler asking them to reimburse me, that I was a life-long Chrysler guy, and so on. They wrote the check.

I would have done the same with your Dodge... there's no harm in asking.

I might should have, but I was stupid back then. I just wanted it to be over, and by day 7 I was already ready to kill someone. Imagine, then, how I felt at day 40 and after. I wasn't thinking properly at all, I just wanted the bad thing to stop. Ah well, live and learn.

But it has completely turned me of from Dodge, and I've been a MOPAR man, previously a MOPAR child, since birth. They had a future life long customer, as I loved my Ram. But never again.

Quote: Face

But it has completely turned me of from Dodge, and I've been a MOPAR man, previously a MOPAR child, since birth. They had a future life long customer, as I loved my Ram. But never again.

My 1988 LeBaron convertible did the same to me. MOPAR needs to be divided to pre and post-Iacocca eras. Post is just plain junk mechanically.

I had an '86 Lebaron that was a POS. Lasted about 100K miles before it was undrivable. Of course, I was 26 at the time... could have been the driver.