Need some Car Buying Advice

[Dillon Poole]

Okay, I need some advice for my wife. She has a 97 Monte Carlo that she bought before we were married and she had no credit and no co-signer, so she got royally screwed with a 22% interest rate. :(



Anyways, fast forward two years. She owes about $6000 on the car, but its got high miles (113k) and has some damage from being transported when we moved. I did an Edmunds and Blue Book price lookup and Edmunds says its worth about $3000 and KBB says about $5000 or so.



Basically I know we are gonna get screwed no matter what we do with this thing. But we don`t want to keep it, I`m a Japanese car guy (99 Toyota Tacoma that runs perfect) so I`m just terrified of the Monte Carlo breaking down with us still owing so much money on it.



What options do I have? We are determined to get rid of the car. Help me out please. Thanks

[BradE]

Well, your options seem clear. 1. Sell the car 2. Trade the car in. You will always get more for the car by selling it yourself than trading it in. The question is, are you willing to go through the hassle of selling it yourself?



The KBB estimates mean nothing, the dealer is only going to pay wholesale for a car with 113K miles on it. Any damage is going to further reduce the price. You might want to PM bretfraz with the specifics of the car, he can find the wholesale price for you.



:xyxthumbs

[imported_bayork]

Well, there are several ways to go about this, depending on what you want to do. You didn`t say if you want to get into a new car or just into another used car. If you want to get a new car, there are some good finanace rates going now, so you could get into another car upside down (basically, that means you add your balance owing on the present car to the new one). You can save substantially on finance charges presently. Meaning you can pay off the money you owe at a cheaper interest rate.

Go to at least 3 or 4 dealers and work with the one that offers the highest trade amount. And don`t hesitate to tell one that another is offering you more.

Selling to an individual might get you more, but it takes your time and effort and is inconvenient. Good luck.

[Dillon Poole]

Sorry, should have mentioned, yeah, we are looking for either a new car or fairly new car (2001 or 2002) in the $20k range or even maybe a lease as she doesn`t drive all that much and I`m in the military so when I`m deployed she drives both cars, so she doesn`t rack up much mileage...I rack up mileage but only on my truck, but I do all my own work on the truck.

[HellrotCi]

You`re going to get the lowest trade-in/wholesale value for you MC no matter what. I think you`ve got your KBB and Edmunds values backwards because KBB is always lower than Edmunds. Anyway let`s say you get $3,500 for trade-in. That means you will have to roll $2,500 into the new loan above what the other car costs you. You will get a tax break in the cost of the new car because of your trade-in. Let`s say your new car costs $20,000, deduct $3,500 for a total of $16,500. You will only pay sales tax on the $16,500 not the $20,000 which will save you $175 @ 5%. Depending on your state`s sales tax rate and the cost of licensing the car and any dealer fees, you`re looking at an average of 8% added to the cost of the car to cover these expenses. That`s another $1,300 added to your loan. So you have $16,500 for the car, $1,300 for taxes, title and fees and $2,500 from the previous loan for a loan total of $20,300. You may or may not qualify for the lowest loan rate, but since I have to assume a lot of things, I`ll assume a loan rate of 8%. An 8% loan rate on $20,300 will give you a monthly payment of about $410.



You say you`re worried about the MC because of the miles. 113,000 on modern cars really isn`t that bad. You will have some maintenance issues to deal with, but every car has these issues and it`s always cheaper in the long run to deal with them than buy a new vehicle. Manufacturers want you to worry about high mileage cars so you`ll buy a new one, but in reality it`s unfounded.



All my figures are ballpark, but they`re based on 30 years of personal experience.

[imported_BretFraz]

I don`t know where everyone is getting their numbers but a 1997 Monte Carlo LS with 113K in FAIR condition is hit by KBB.com at $920. GOOD condition is $1475. A car with body damage and 113,000 miles on it will not get hit at a GOOD condition price by any sensible used car appraiser. If the car is loaded to the hilt (leather, moonroof, CD, alloy wheels, etc, etc) and is in spectacular mechanical condition with a huge stack of repair receipts, it might hit $1500. That`s about it, I`m afraid.



If you`ve absolutely got to ditch the car and cannot bear to sell it yourself, buy a car with a big rebate on it and use the rebate to help payoff the negative equity.



If you can get the damage fixed for under $500, do so and sell the car yourself. If everything is nice on it (tires & brakes like new, AC blows cold, stereo works perfectly, everything else in like new condition) you could get $2500-3000 for it. The market is thin for these cars so the condition has to be showroom and the price has to be dead on right. Otherwise you won`t get too many calls.



A couple more comments, if I may:



1. Rolling negative equity into a new loan may not solve your problem. Few banks will fund a loan if the loan amount is over 105% of the purchase price. For example, if you buy a car for $20,000, the most a bank will loan you is $21,000. Some credit unions will go to 107-110% but that maxes you out at $22,000. The rest of the $$ has to come out of your pocket.



2. Very few people get approved for those 0% interest loans. The national approval rate is 12-15%. So if you are counting on the low interest rate to keep payments low, be very careful. You may be better off getting a loan from a credit union or an online source like People First (don`t do E-Loan, most dealers I know hate them because they`re so hard to deal with) and taking the rebate. There are great calculators at www.bankrate.com to help you determine what is the best path to take.



Hope this helps. Best of luck.

[Dillon Poole]

Yeah, I know the value is nothing for trade-in, I wasn`t planning on trading it in cuz dealers rip everybody off this way. My figures were calculated on both sites through retail, not trade in. I also checked local 97 Monte Carlos through Autotrader.com and they were actually priced higher then I would have imagined as American cars are still big out here in the Midwest as opposed to California where I recently moved from (military).



I can guarantee the damage is more then 500 dollars (a section of the body under where the door closes folded). Anyways, its not really worth it to fix. The rest of the car is in really good condition, no smokers and is loaded with every option and upgraded stereo...we`ll see.



Our credit since this has improved from 2 years ago to the point that I recently got a 7% car loan through my bank. I`m not gonna try for the 0% rate but would rather go for cash back incentives to offset the screwing I`m gonna get with this car.



Anyways, thanks for the advice, guess I`ll just bite the bullet and get it over with. :doh

[imported_stormsearch]

your poor wife... hopefully you`ll educate her on the beauty of buying imports that retain their value. Anyhow, I`d advise you to:



1. Sell the Monte Carlo yourself. When I was selling my old Civic with 225,000 miles, a broken speedometer and a dead throttle body computer, the dealers all offered me approx. $300.00. I parked the car next to the freeway, posted a sign listing everything that was wrong with it, offered a giant stack of all the maintenance records, and received an offer for $1000 the same night. Just goes to show you that there are people looking for the right student car, the right fixerupper, etc.



2. Don`t buy new. Buy one year used. The savings are incredible. I`ll use Accord`s because of personal experience. The new Accord EX Coupe`s are selling at 31k off the lots right now and everyone` going for the new body style. Meanwhile, you can get a loaded 2001-2002 Accord EX with leather, moonroof, cd, etc for $15-18k. These are essentially new cars. Some have 10-12k miles, others are literally the cars that just didn`t sell and are being dumped in favor of the new product line.



So in summation, sell the car yourself, and buy late model used :)

[gnahc79]

If the sell price is only a couple thousand, you might want to look into donating it and getting a tax break for it. That`s what I did for a `88 civc dx hatch (claimed $2000 back in `96) and `88 Acura Legend (forgot how much) that wouldn`t go into drive. IMO it`s inbetween the ripoff of a trade-in and the hassle of selling it yourself.

if you do go this route, be careful about how much you claim or you`ll be in tax audit central.

[imported_Aurora40]

Originally posted by Dillon Poole

But we don`t want to keep it, I`m a Japanese car guy (99 Toyota Tacoma that runs perfect) so I`m just terrified of the Monte Carlo breaking down with us still owing so much money on it.



Being a japanese car guy makes a Monte Carlo more likely to break down? Is there any reason you have this concern about it breaking down? Has it been trouble in the past?

[autohubgroupph]

Lots of good advice and examples in here so far. I don`t believe using a downpament (or vehicle trade-in value) will lower the taxable value for a new car, though.



Anyway, my advice is to keep the Monte Carlo. Re-finance it at a lower rate. My credit union offers as low as 4.74% right now for example. Pay it off as quickly as possible or save the difference in payments to pay for maintenance if it comes up.



113k miles isn`t that bad on most newer cars, especially if that has the 3.8L. Engine & trans should be good for 250k miles if kept up well.

[imported_kgb]

Sell it and get a HONDA! hehe I was always anti-imports until I went car shopping and found for a lower price than any domestic in that class I could get a fully loaded Civic EX with, better gas mileage, and built more solid. :D

[Dillon Poole]

Mechanically it is running fine because I`ve been real anal with it and do all my own work. But I think the water pump is going bad and the fuel pump has been pretty testy with me. Wife says the car has stalled out a few times from lack of gas, and this is a few thousand miles after new plugs, wires, cleaned throttle body and MAF, new air and fuel filter.



Not to mention the electricals that just fail. The moonroof doesn`t open, the stock stereo died 3k after we bought it used (replaced with a Pioneer) and we have replaced 2 wiper motors.



All this before it hit 110k. I know with Toyota trucks, they are just getting started at 110k....Lets just say I`d feel alot better driving my truck crosscountry then driving hers half that distance.

[imported_stormsearch]

I hear ya :) Our family history with American cars was so bad that when I was 18, my father issued an edict to me: "This family will NEVER buy an American car unless we win the lottery. And if you buy an American car, I probably can`t afford to help your repair it everytime you sneeze." That year my friend Jon and I both bought used cars. I bought a 1990 Honda Civic with 120,000 miles. He bought a 1997 Chevy Cavalier with 10k miles. By 80k he had replaced the automatic transmission twice, replaced the motor mounts, gone through 2 stock stereos before giving up on GM OEM parts, and several sets of joints, suspension parts, and an abnormal amount of gaskets. It constantly leaked oil and shook above 60 mph. He finally got rid of that POS in 2000. I replaced the Civic`s rear main seal at 198,000 miles and finally sold it January 2003 with 214,000 miles. With the money he paid in repairs on that POS, he could have bought a real car.:sosad

[BradE]

My expierence has been the exact opposite. I own a Ford Explorer, currently 84K miles, and not a single thing has failed. I have only replaced 1 set of tires and brakes. That`s it. Never had a single problem with any of my Lincolns either (I have owned 4)



On the other hand, my Mom had a 1988 Accord back in the day. She bought it brand new and had nothing but trouble. Before it got to 80K the AC system went out, Water pump went, timing belt, brakes galore and a new radiator, exhaust system had to be replaced. That`s just the stuff I remember, I`m sure there is more. My Dad`s old Toyota (1992) had tons of problems as well. Motor Mounts went out causing the entire engine to tilt in the engine bay, AC went out on it also, tierods were defective, ball joints failed, trunk seals leaked water. This was all before 50K miles.



So perhaps instead of making blanket statements like American cars are not "real" cars, perhaps it would be best suited for you to share your expierence instead of name calling. For every horror story about American cars there is an equal amount for Japaneese cars. No auto maker is perfect. :cool: