College Student buying car

[THESANTINI]

Good Afternoon All,

I am in college 2nd year and would like to buy a car. I just got ride of my 91 Toyota Mr2. Loved the car, hated mid-engine because it was a horrible car to drive in the rain, snow, etc. It attracts too much attention (yellow). So as I settle down I would like to buy a Honda Civic 96-98 and need help.

Anything to look for when buying used?
Private/Dealership?
Loan (what % you put down, etc) how do I get the most favorable rate (I have little credit since I'm still young... also using this to establish credit).

Any further information, greatly appreciated.

Edit: Insurance information would be helpful, I used to speed my parents won't insure me Have not had a speeding ticket since December 2000. It was six points (don't ask) and I went to driver improvement...

[Jngrbrdman]

Let's see.... A single male under 25 is basicly the worst thing in the world to be if you are getting insurance. Prepare for the worst. I was paying $165 a month on my Mustang when I was single. I got married and added a 4 Runner and an Accord to my little fleet and the insurance on all three for the two of us was the same price as just the insurance on my Mustang for me when I was single.

Avoid 2 door cars. That will kill you there. Getting a nice safe sedan will help you out in the long run. There are plenty of zippy sedans out there if that is what you are looking for.

As far as getting a loan goes... If you don't have much credit then you may need a co-signer anyway. I don't know many people who were trying to establish credit that were able to score a car loan for any significant amount without a co signer. The % will depend on how much the car is and what kind of deals are going on. I know around this time of year a lot of dealerships will match your downpayment if you use your tax return. That is something to maybe look into.

I tend to trust dealerships a little more than the private seller. Unless you have the cash in hand then its a little tougher to buy from a private seller anyway. You'd have to get a loan from your bank which also requires credit and probably a co-signer. I guess just shopping around is the key. When I was looking for my car I could have cared less if I bought it from a private seller or a dealership. I knew that it would be new enough that it was safe to buy it either way. Just make sure you have your mechanic check it out before you buy it from either place.

Maybe I'm biased (....ok. I'm a lot biased) but I'd say go look for a Honda. They are peppy cars that won't ream you for an arm and a leg. The insurance isn't too bad on them either. Not to mention that they hold their resale value forever. A Civic DX will still retain 75% of its resale value after 5 years. Its a fact. That is just my suggestion. I've bought and sold a half dozen cars and trucks since I've been a married and have had my lesson taught in the art of car sales. Its a sticky world out there...

[BradE]

As far as the loan goes, do you have a job? What's your montlhy income? What are your monthly expenses? How much can you afford for a car payment per month?

Many factors will play into a bank's decision process, plus since you have no credit you are going to be paying higher interest rates (your a bigger risk). If you don't have a job, and held that same job for at least a year, chances are a bank is not going approve your loan. As Jngr said you might need a co-signer. Bank's don't give out large loans to "establish" credit.

It would be in your best interest to have a large down payment.

[THESANTINI]

Thanks for the comments thus far.

I am looking to buy about a $8000.00 car (most likely $6500). So I don't need a large bank loan, and I'm going to get it used so that should make things easier.
I'm planning on getting a mechanic to look at it. I'm not too worried about the mechanic because it is a family friend that only works primarily Japanese cars so I shoudl be okay in that sense.

My plan is to get a Civic EX because it has simple looks, and is reliable. Any other alternatives that don't look ugly (i.e. Corolla). As far as Civics that are well mantained, how long will they last?

My monthly income is $610.50 before taxes (working two days a week). My monthly expenses are $35.0 cell phone bill.

I Neeed to factor in insurance! I really want the Civic EX coupe, I don't plan on doing any modification to it.

[Jngrbrdman]

$610 before taxes probably comes out to be about $400 take home. I don't know how much of a car you are going to be able to get with that. How much do you have saved for a down payment?

Something to keep in mind is that the EX is just an LX with a sunroof and alloy wheels. Maybe a spoiler. There is no difference in power or anything else. You may want to think about that when you are shopping around for one. We bought an LX Accord because the cost difference for alloy wheels and a sunroof just weren't worth it to me. I can buy alloy wheels used for less than the difference was going to be. If the power is the same and all the other features are the same then it may be a waste of a $1500 price difference.

Honda's hold their value extremely well. We sold a ten year old Accord with 162,000 miles on it for $5000. Book on it was $6200. To find a Civic in that price range then you are probably going to have to start looking at about 93 or 94. Just a tip.

[BradE]

You must also keep in mind a bank WILL NOT lend you the full blue book value of a used car. They only lend up to blackbook (wholesale value).

How long have you been employed at your current job? Banks are very leary of making loans to people with part time employment. If you have been there a while that will help. Don't forget you will also be paying interest. You won't get any .09% financing or anything like that. It's on new cars only and is only for people with approved credit.

The amount of down payment you have will be a major factor. From your credit status and imcome level I would say you need at least 35% down if you purchase a car for about $8,000. I would probably push that to 40% down if possible. Otherwise you are running a good risk of the loan being rejected and paying huge interest rates.

[THESANTINI]

Alright fellas, thank you for your help. I'll have to talk to my parents into cosigning.

Wish I wasn't a crazy teen back when, lol.

[THESANTINI]

Jngrbrdman- must have = Sunroof. This car is going to last me a couple of years out of college !

[Jngrbrdman]

Man, I wish I could give you the one off my teg to save you some money. I hardly ever use it.

Look at the Special Edition Integras while you are at it. If you are into the Civic then the teg should be nice for you too. The SE had the wheels and the sunroof of the GSR but had the engine of the LS. Some of them even had the leather if I remember right. Plus, Integras look so much better than Civics.

[THESANTINI]

I just want to avoid the "sports" car look altogether. When I get my first real sports car.... its going to be either a Supra, Rx-7, ///m3. In the meantime I'll be saving the money and investing, etc.

The Integra is not a bad option though, great reccomendation.

[jem7vwh]

Good choice with the Honda, they last forever!

For insurance purposes, the Civic's a good choice, but you might consider an LX instead of a DX.

Here's your trade off between power and insurance. The EX came with a slightly more powerful VTEC engine. Insurance companies know that and will charge you for your extra torque.

Also, consider a 5th generation Accord. These were produced from 1994-1997. They can frequently be found between $5000 and $6000 until 90k miles in excellent condition. You'll have the insurance benefit of owning a "family sedan" and the power benefit of 130 HP as opposed to 105 on the Civic.

Regarding buying, be weary of brokers (guys who own lots or sell out of their homes as a business). Dealers are the safest bet, but you'll pay for it. They need to profit off of the car too. Individual sellers are usually the best deal, but you'll have to make sure you're not getting a lemon by yourself.

If you do- make sure to let me know and I'll give you a checklist for a used Accord or Civic.

I'm enjoying a new used Accord myself. 1994 Accord LX, 88k miles, $5000. What a good deal it was.

[Jngrbrdman]

I did some looking on AutoTrader.com and was looking at Civics and Integras. You can't really get anything newer than a 96 with $6500. Even then you are going to be getting a car with well over 100,000 miles on it. Not that it matters to a Honda. They are 250,000 mile cars easy. I just thought that might help you when looking.