#CarPurchase #FinanceVsBuyOutright #NewCarVsUsedCar
Hey fellow car aficionados! 🚗💸
I’m in a bit of a pickle and could use some advice. I’m looking to buy a new car for my wife, but I’m torn between buying it outright (approximately $32k) which would dip into our savings and delay our house purchase, or financing it and keeping more of our savings for a house down payment, albeit with higher payments and interest rates. What would you do in my situation?
Here are some things to consider:
– Buying outright: immediate ownership, peace of mind, house purchase delayed
– Financing: keep savings intact, higher payments and interest, house purchase sooner
Personally, I’m leaning towards financing to keep our savings for a future house purchase. What are your thoughts on this? Any tips or insights would be greatly appreciated! Let’s weigh the pros and cons together. 🤔ðŸ’
Do any dealerships near you offer new car financing? I know they often will have specials for new car financing in the ~3% rate range. If you can get that I’d finance the car.
My car died 1 month after closing on our home. We unfortunately didn’t have much time and got stuck when rates were high even on new cars. I got a 5.9% rate from a dealer even with a 780 credit score, but I didn’t have enough to buy outright. I made it my mission this year to pay off the car. At the end of July I’m paying off the loan. I’ve save aggressively and picked up a few extra shifts at my job to do it
Here are some examples of promotional financing available through the OEM:
[https://www.subaru.com/shopping-tools/special-offers.html](https://www.subaru.com/shopping-tools/special-offers.html)
[https://www.mazdausa.com/shopping-tools/special-offers-and-incentives](https://www.mazdausa.com/shopping-tools/special-offers-and-incentives)
Many of the models have 1.9% to 2.9% financing.
Either option will hurt your chances of buying a house. You’re making the poor financial choice, but you knew that already:
“So I’m going to be buying a new car this isn’t for debate”Â
Since you rent, move to a place you don’t need 2 cars.
Is this really even a question.
We faced a similar situation and financed the car, dealership had a special at 3.2%. We had the cash to buy outright but then wouldn’t have been able to put 20% down on a house, where our interest rate is 7.125%…. The math makes it clear which option to take. Finance the car, just don’t let the dealership talk you any add ons you don’t need. And check that there is no fee for paying the car off early. You can always pay the car off quickly if you change your mind.
Tough predicament. If you can afford a home now and can afford the piti ( principal, interest, tax, insurance). Buy buy and buy a home. Greatest asset.
Getting rid of your emergency money is a really bad idea. Look at Facebook marketplace first to find something. I think getting a house might make the family more happy than getting a brand new vehicle.
The house savings and emergency fund would be much higher on my priority list than a new car. Vehicles are BS and certainly are not investments.
If you aren’t a member of a credit union, join one. Find one that is running a deal on refinancing — mine offers 100% financing, no payments for 90 days and a $200 bonus. We previously refinanced a car there when they were beating the rate by two percentage points.
Make sure you know what the refi terms at the credit union will be and whether they’ll work for you, If they will, get financing at the dealership. Then as soon as you’ve made the first payment, sooner if possible, refinance at the credit union.
We just bought a new Hundai Sonata and got 5.49% for 60 months. I’ll be going to the credit union to see what my refinance options are between now and the first payment in August.
I bought almost a 10 year old vehicle with 60k miles and perfect service record. It was half of what a new one would have cost.
I paid it off in 2 years and I did extensive research on what the common repairs and issues were for the year and model.
I just hit 100k and this year I’m going to spend 5k to get the most common things that go bad replaced with higher quality and more efficient parts anyways they aren’t bad yet.
I’m hoping to get another 100k miles with the 5k investment.
I’ve still spent $20-25k less than I would’ve on a new model of the same vehicle.
At 8% for a financing rate, you would be better off paying cash. If you’re looking to buy a new car, most manufacturers are offering great promotional rates. In that event I would finance.