A few questions about buying a car.

In My Humble Opinion
1

I’m currently driving a '95 nissan sentra, which I have a feeling is getting ready to start going downhill. It is at 80,000 miles right now and hasn’t had any major repairs. It isn’t in very good condition altogether, it alread needs a few hundred dollars in repairs right now I think.

The car served its purpose however, it got me through college with no major repairs, and now I’m out of school and (hopefully) about to start working full time.

So, I’m hoping to buy a car within the next few months. One car I am very interested in is the Nissan Altima, especially the V6 model. I also like the Maxima, but its probably out of my price range. I am also looking at other cars similar to these, pretty much mid-sized sedans with a bit of pickup and some decent options. Any suggestions of other vehicles like these?

One big question I have is if it is a good idea to buy a new car. I have always heard that the best way to buy a vehicle is to get one that is about a year or so old; is this true? I have also heard that you can get better deals/financing on a new car; is that true? Of course I’d perfer a new car over a used one, but it really isn’t that big of a deal to me.

Another of my main quesitons is how much can I afford to spend? The cost of a new Altima like I have designed on their website is not much less than I expect to make a year to start. Some Maximas are more than I expect my yearly salary to be. Is there any kind of “rule of thumb” to know how much you should spend on a car compared to how much you make? When I compute monthly payments for 48 or 60 months, they are generally something I think I can afford.

I am single and I will be living with a roomate so I will have a little extra money compared to someone who has a family or is living by themselves or whatever. I figure some of this extra money I’m saving right now could go into my car.

Another question is whether I should buy or lease. As of right now all I have been thinking about is buying. Is there any reason I should look at leases instead? I would assume that buying a car is more economical, right?

So, in a nutshell, my main question is: “What kind of car should a new college grad just starting work get, and how should they finance it?” Or, something like that.

I guess that’s about it for now, if I think of more quesitons I may post them later. Thanks.

2

It looks like I forgot the y in “buing” in my title. My bad.

3

I always wanted a new car. I still want a new car. I’ve never had one and probably never will. Money is of course an issue, if it wasn’t there’d be no problem.

That said, you get more for your money buying used. New cars take a huge hit in depreciation the first year (actually, immediately after you sign on the line). So, you pay $25000 for a new Altima and by the time you get it home, it’s worth a few thousand less. You don’t say what the rest of your financial picture is, but I think that hurts. Even if you’re going to keep a car forever, it’s still a better idea to save the initial hit and buy one a year or two old.

Of course, the best idea would be to spend the few hundred on your Sentra which has tousands of miles of life left, deposit the car payment your not making in your bank, tough it out for a year or two and enjoy having money. You probably be paying $350-400 per month for a car like that Altima, right? After a year that would be almost $5000. That would be a nice cushion or a down payment. Think of what else you could with $350 every month, trips, dates, nice clothes, eating out.

New cars are nice. If you have lots of money, buy one. If you’re like most people, save your money, buy a cheaper used car or keep the one you have.

4

There’s plenty of horror stories of the problems in returning a leased car. It has to be pristine or they will charge you for any issues. I’ve never been able to keep under the recommended yearly minimums for mileage, either.

I’ve been buying “lightly used” cars the last couple of times. Mileage usually around 30K or less, probably a year old. Much cheaper than a new car and it still has lots of life left in it.

$.02

5

I hate to say it, but a recent college grad whose employment prospects are still a bit vague should be driving a car like a nice, reliable '95 Nissan Sentra with only 80k miles on it.

You say it needs a few hundred dollars’ worth of repairs? Compare that to spending $15k - $25k on a new car, and it begins to look like a bargain to fix whatever’s wrong with the Sentra. Short of trying to fix a serious rust problem, it makes economic sense to keep repairing an older vehicle for as long as it remains reasonably reliable.

But, there’s a lot of emotion involved in car ownership, so you may not be able to control your lust for something newer. Just remember that if you get a new (or even newer) car, you’ll have to have collision and comprehensive insurance on it (and you should not keep that kind of coverage on a '95 vehicle), which, at your age, could be pricey. Check with your insurance agent before making the leap.

I won’t bore you with the details, but leasing is never a good option unless you’re talking about a business vehicle, where the lease option yields some tax advantages. Basically, leasing is a way for people to get more car than they can afford, but there’s no free lunch. They end up paying for it in the end (vague reference to getting screwed intended!).

6

carbuyingtips.com it’s your friend.

7

Here’s the way we do it in the Kunilou household.

Figure out how much your monthly payments on a new car would be.

Figure out how much more you’d be paying in insurance.

Open a separate savings account apart from your regular money. Start depositing that much into that account each month. Withdraw from that account only to pay for repairs to your old car.

Keep doing that until you have saved sufficient money for a great big down payment – big enough that your monthly payments will now be lower than the amount you had been depositing into your account each month.

Buy your car, enjoy your car and deposit the difference between what you had been saving and your new monthly payments into your car account. After your warranty runs out, you’ll have a nice fund to pay for car repairs and eventually you’ll have saved enough again to buy your next car.

8

A Nissan Sentra? With 80k miles on it? Dude, this isn’t the 50s. And that’s a Japanese make. Take care of that car, it will last you another 100k easily, and much more than that if you really take good care of it. Also, it’s ALWAYS cheaper to drive a car into the ground than to buy a new one whenever the older one starts getting, well, older. I strongly suggest, since you’re a new college grad just starting work, that you hold on to that car for a few more years, accumulate good credit, then buy a much nicer car than you could get now on much nicer loan terms than you could get now. There’s absolutely no reason for you to even consider getting a new (or even a used) car.

9

Read The Complete Idiot’s Guide to Buying or Leasing a Car by Jack R Nerad. I’ve bought two cars with it and have found it to be exceedingly helpful.

Both cars were Altimas, BTW, and I was/am thoroughly happy with both cars (right up until the first one was smashed to bits in a crash).

10

Mod note:

Corrected typo in thread title.

Veb

11

I have always thought it best to buy a car that is about 2-3 years old and in good condition. Japanese cars last a pretty long time so if it has 40K on it I am not to concerned. Try not to be in a hurry to buy one as I feel that affects your judgement and shop the model around because dealers are competitive if you make it known you are looking at other possibilites. On the other hand there are some real good interest rates on new cars that make them look pretty good. I always liked those “6 cylinder” VW Golfs. I bet they perform pretty well and the hatchbacks are amazingly versatile.

12

With 0.0% financing plentiful, the traditionally sound advice of buying a one year old used car makes little sense right now–that one year old financed at 8% won’t cost you much less than the brand new one with a full warranty.

That said, I’m with everyone who says keep the Sentra for now. The hard part is saving the money instead of burning it, but good advice is hard to follow.

13

Never say never. Those who follow the rules do not get screwed. Keep the miles within the agreement and return the car with reasonable wear and tear. I have leased my last four vehicles and never paid a penny in penalties nor lost a penny of a security deposit.

I would not recommend leasing to anyone who is not well versed on the concept, but if you know what you are doing and can find a nicely subsidised lease with a low money factor, you can save money and hassles vs. financing a new vehicle for 60 months every 60 months, not to mention the benefit of having a new car more often that is always under warranty.

If you are comfortable with always having a car payment, don’t drive lots of miles, can negotiate a low selling price, take good care of your cars and understand leasing inside and out, leasing is for you. Otherwise, it’s probably a bad idea.

Buying a three year old car with a bit of warranty left at a low price and keeping it until it becomes uneconomical to repair is generally a less expensive strategy. Better yet, keeping your present car running as long as the repair bills aren’t out of control may be the cheapest way to go.

14

All Japanese makes are not created equal. IIRC, Honda/Acura and Toyota/Lexus’s average failure rates and longevity for vehicles manufactured during the past few years are significantly better than those of Mazda and Nissan/Infiniti which are in the same ballpark (Yankee Stadium?) as the typical Detroit and German iron.

Suzuki, Isuzu, Subaru and Mitsubishi on average are worse.

I am speaking of averages and of course, YMMV.

15

Hints:

  1. If your car has 80,000 miles on it you still have another 80,000 miles to go. At least. Here is a financial tip for you, one you should absolutely hold steady to for the rest of your life: Drive your car into the ground. Today’s cars will last a very long time before they’re either too expensive to bother maintaining or too crappy to want to drive. Your car isn’t even a senior citizen yet.

As a general rule you should not replace your car until it’s either too uncomfortable to drive or the repairs are actually worth more than a car. Every month you go without making a car payment is a month you’ve got a LOT of extra money. Absolutely do not buy a new car if your current car is that young. Please, please, believe me on this. Buying cars too often is one of the most common financial pitfalls people make; it is an absolute and total waste of money. IF you’re going to have some extra dough, pay down your debts or save it. Trust me; you will NEVER regret it.

  1. Lorenzo is correct in that the “buy a used car” notion can be wrong, if you’re talking 0% financing vs. 7-9%. Used cars are cheaper off the sticker, but the loan rates are invariably higher. Compare prices by monthly payments over the same term. Don’t try to say “hmmm, $24,000 at 1.9% versus 19,500 at 9%…” Fix a term (Say, 4 years) and a down payment, and then control for monthly payments. Not only do you get a clearer picture of the real difference in cost, but it gives you a better idea of the actual financial burden you will carry. And yes, as others have mentioned, remember to consider the insurance bump.

  2. When you decide to buy a car you have to shop around, shop around, shop around. Do not fix your sights on a Nissan Altima and go buy one; that is just plain stupid. Test drive MANY different cars in the general class you want. If you do not test drive at least five models, you’re a fool. Don’t just look at the car; TEST DRIVE IT. Take it out, and insist on driving it for 10-15 minutes at least. Drive it somewhere where you can get it going pretty fast. People who shop around are very frequently surprised to find a car they like way more than the car they originally had their sights on.

16

I maintain that if you don’t drive lots of miles, can negotiate a low selling price, and take good care of your cars, you should buy one, pay it off in 3 or 4 years, then drive it for 12-15 years. You’ll have a full decade with no car payments at all, and, given how reliable many cars are these days, you’re not going to be facing a whole lot of repairs, warranty or not.

To me, the key to the relative merits of buying and leasing is contained in the advertisements from car dealers. Every ad I see these days tells you about the lease price, not about the selling price. This indicates to me that the dealers really, really want you to lease a car. Now, that means either that they’re really nice guys, who want to take as little of your money as possible, or…

17

Wow, it looks like the dopers agree that I should stick with what I have now. I am going to have to very seriously consider that. Maybe I can get even a few more years out of this car, and seriously save some cash.

As for the Sentra I’m driving now, it may be in a little worse condition than is evident from my post. Right now, it definitely needs a new oxygen sensor and probably a catylitic converter. There is somthing wrong with the wheels, which the mechanic explained to me, but I forgot what it was. That problem was something that will be a a few hundred bucks and needs to be fixed fairly soon or it could screw up the axels. It also needs 2, possibly 4 tires in the near future. Basically, it definitley wasn’t “beaten”, but it wasn’t necessarily maintained like a mechanic owned it either.

I came up with a couple more questions as well:

If I do decide to go with a different car, should I fix anything with this car, or should I just trade it in “as is”? I’d assume a dealer could fix it up cheaper than I could, so it wouldn’t make much sense for me to get the repairs done would it? I’m not really considring selling it to a third party, because I would feel bad if I sold it and it ended up having more problems than I realize.

Also, since I’m not really on a hard time frame right now, is there any specific time of year that would be the best time to get a different vehicle. I could basically bide my time, and wait for the perfict opportunity if necessary.

Well, thanks again for the replies. It has really influenced my decision process. Before I made this thread, I was pretty set on getting a different car. Now, I am having serious second thoughts about it, and am really considering just sticking with what I have.

18

Well, tough to tell, but if the Sentra needs a catalytic converter, that could be a deal-killer. Faced with that, I might ditch the car, and look for a slightly used something else. On the other hand, converters usually last at least twice as long as this one has, so get a second opinion before replacing it. The “wheels” problem is probably rotten CV boots. They can cost a few hundred to replace, but if they’re really cracked, it’s worth doing (they tend to deteriorate over time no matter how well you take care of the car - my '92 is ready for a pair). Replacing the boots is a lot cheaper than having to replace the joints that they’re protecting, and if road gunk gets into the joints, they get loused up (“loused up” - a technical term :wink: ).

If you do decide to buy something else, I’d say to trade the sucker in “as is;” doing repairs would cost you more than the increased trade-in value. Just clean it up so that it looks decent - no need for detailing, but clearing the old burger wrappers out of the back seat and spritzing some ArmorAll on the dash certainly wouldn’t hurt!

19

That is exactly what the problem is. Thanks, I couldn’t think of it.

20

I’m in the same situation (except I’ll be purchasing my first car), and I’m starting to take the “buy a gently used car” advice to heart. Since I’ve never owned a car before and am not sure what to look for, how do I know that I’m not buying a piece of junk? Also, what cars are generally considered reliable after a few years of driving?

Thanks,

  • tsarina.