Buying a new Car, Credit, Toyota... all that good stuff

Miscellaneous and Personal Stuff I Must Share
1

So, it’s time for me to purchase my first ever car. Well, I mean, I have a car now… but it’s old, tired, and it’s time to be replaced. So I decided what I wanted, and strolled down to the dealership today to figure out how I’m gonna pay for it. I know going in that I have “okay” credit and that I’m definitely going to need my parents to cosign with me when it comes down to actually buying it, but I went in anyway.

Anyway, I knew I wanted a Celica. No question about that. And I thought I wanted a GTS… but upon looking that and the GT over, I was wondering, first of all, if anyone knew what the difference is. Besides a couple thousand bucks, and about a hundred bucks per month. The six-speed manual is what pulls me towards the GTS; but the GT has a five-speed manual as an option. I didn’t notice any visual differences… are there any? What are the performance differences, basically? I’m no car buff.

So I figured I’d try to run it anyway with just me, and my credit report came back with a score of 550. Which is apparently low. :slight_smile: I’m 18, I have 2 credit cards, and… eh. I haven’t built any credit, I suppose. Is that a good score for my situation?

Now, I’ve read a few websites, but I’m still unsure of the basic difference between a lease and a… non-lease. Leasing vs. financing, I suppose. What’s the difference? I’ve heard bad things about leasing.

We didn’t discuss too much of the financial aspect, as my credit check failed. However, my parents have expressed agreement regarding going back with me to get it approved. Basically, I’m working a part-to-full-time job this summer and have nothing to pay for, except this car. So paying for it is no problem, just getting the credit is the hassle. Anyway… what kind of interest rate can be expected? On average.

Hmm… that’s about all for now, I guess. I’m new to this whole “buying a car” thing. :slight_smile: But I am determined to get it, and to pay for it, and to use it to my advantage both in responsibility and in building credit.

Does anyone have any general advice?

Thanks!

2

Since you’re looking for general advice…

I, too, just bought a car (my first new car!). If you are getting a new car, don’t just assume that financing through the dealer is the best deal, even with 0%APR. If there is a rebate offered through the dealer when you don’t finance through them, check to see if getting a loan through your bank will result in less interest paid than the rebate.

I bought a Saturn ION Coupe and had the option of financing through the dealer for 0% or financing elsewhere and getting a $2000 rebate. I got a loan through my bank for 2.9% over 3 years. The interest ends up being about $700, so I would have paid $1300 more by financing with the dealer.

Additionally, your bank is typically more forgiving of less than perfect credit since they have an existing relationship with you. My bank has a 24 hour turnaround for loan applications made online or by the phone, and making those applications with a cosigner is no problem.

3

The main difference between leasing and buying a car is that a lease is basically a long-term rental agreement.

Your monthly payments are lower, but at the end of the lease period you have the option to either give the car back or buy it outright at the price they set for the current depreciated market value.

When you return the car they will charge you for things like excess wear & tear, putting more miles on the car than they think is normal, etc.

If you buy the car, the payments will be higher, but at the end of the contract the car is yours.

4

When I bought my first car, my parents had to co-sign. No big deal, unless you’re an irresponsible kid and don’t make your payments, and the bank goes after your parents!

I never lease. Ever. Why would I want to rent a car for 2 years?

Toyota seems like a good company, their cars are very reliable and last forever (so you don’t have to worry about it falling apart the day after you mail your 60th payment).

Good luck!