31 replies to this topic

[mo_dingo]

I just bought a 2006 F150 off Craiglist from a private seller. Much better price than the local dealers.

The low prices on newer models aren't ALL scams (although most of them are), some have rebuilt titles and some are high mileage.
Look at the photos of the vehicle background and see if the picture looks local. If you live in Kansas and see a beach in the photo, somethings off.

Nada, KBB, etc all use a depreciating model based on MSRP when the unit was brand new to calculate the vehicle's current value. They may claim otherwise, but if you track units like I do, you will see the formula they use. Their numbers can be skewed in one direction or another.

Assume that offer prices are a little on the high side on craigslist - negotiate hard! I check ebay for completed auctions to see what FMV is for the unit. That way you know what someone was actually willing to pay for the vehicle. They can offer any buy it now price for the unit until they are blue in the face.

Also, as stated before, be wary of vehicles that are selling for 30-40% less than the FMV price. Something is likely wrong with the car (either mechanical issues, or the vehicle was in an accident & the guy rebuilt the car).

Carfax is a joke; you need a certified inspector trained in detecting prior paint work to look at the car before you buy it. MOST ACCIDENTS are not reported to carfax. A car that was in a nasty accident may have all sorts of problems. Believe me, I know! It may also not even have any information on the title indicating salvage/rebuilt.

To the OP, you seem like you are in a lot of debt. I don't want to sound judgmental or condescending. I know you want a dependable and nicer car now. Buying a used lexus is definitely a good idea as they will hold their value. I purchased my 2005 M3 back in 2008 for 24k, and they sell for a similar price to this day (I do keep mileage low though). But if I may make a suggestion...Please pay cash for a cheaper car now. In a years time (or once you reach your debt reduction goal), then buy the nicer car. You can always sell the cheaper car a year from now and it will hold it's value pretty well. Adding another payment to the list of payments you already have will only decrease your savings rate, which will reduce your ability to knock down your debt.

FWIW, if you have low interest student loan debt, I wouldn't worry so much about that - Pay that last! It's the high interest CC debt that needs to go first. It seems like you got an awesome job that pays well, use it to destroy debt! I hope you take this in the spirit in which it was intended.

[54regcab]

+1 mo_dingo.
Agree about paying cash for "beater" for now and upgrade later.
I too agree about the carfax, taking to a body shop (or other competent person) to have them look for signs of work being done is best. I wouldn't automatically run away from something that's been in an accident IF the work was done right (the body shop would be able to tell you this) and the vehicle was priced right. It's the 1/2 done work that creates future problems, these can be identified by uneven gaps around hood/doors/trunk and they may not close properly. Vehicles may pull, steering may not be centered. Mast parts are bolt on these days, the old "overspray" test isn't as accurate as it once was.

Edited by 54regcab, 12 November 2011 - 09:10 AM.

[uptomyneck]

I just bought a 2006 F150 off Craiglist from a private seller. Much better price than the local dealers.

The low prices on newer models aren't ALL scams (although most of them are), some have rebuilt titles and some are high mileage.
Look at the photos of the vehicle background and see if the picture looks local. If you live in Kansas and see a beach in the photo, somethings off.

Nada, KBB, etc all use a depreciating model based on MSRP when the unit was brand new to calculate the vehicle's current value. They may claim otherwise, but if you track units like I do, you will see the formula they use. Their numbers can be skewed in one direction or another.

Assume that offer prices are a little on the high side on craigslist - negotiate hard! I check ebay for completed auctions to see what FMV is for the unit. That way you know what someone was actually willing to pay for the vehicle. They can offer any buy it now price for the unit until they are blue in the face.

Also, as stated before, be wary of vehicles that are selling for 30-40% less than the FMV price. Something is likely wrong with the car (either mechanical issues, or the vehicle was in an accident & the guy rebuilt the car).

Carfax is a joke; you need a certified inspector trained in detecting prior paint work to look at the car before you buy it. MOST ACCIDENTS are not reported to carfax. A car that was in a nasty accident may have all sorts of problems. Believe me, I know! It may also not even have any information on the title indicating salvage/rebuilt.

To the OP, you seem like you are in a lot of debt. I don't want to sound judgmental or condescending. I know you want a dependable and nicer car now. Buying a used lexus is definitely a good idea as they will hold their value. I purchased my 2005 M3 back in 2008 for 24k, and they sell for a similar price to this day (I do keep mileage low though). But if I may make a suggestion...Please pay cash for a cheaper car now. In a years time (or once you reach your debt reduction goal), then buy the nicer car. You can always sell the cheaper car a year from now and it will hold it's value pretty well. Adding another payment to the list of payments you already have will only decrease your savings rate, which will reduce your ability to knock down your debt.

FWIW, if you have low interest student loan debt, I wouldn't worry so much about that - Pay that last! It's the high interest CC debt that needs to go first. It seems like you got an awesome job that pays well, use it to destroy debt! I hope you take this in the spirit in which it was intended.

Thanks! I appreciate the word of wisdom. I sat back and decided that I will try to aim maybe for January for the car. Hopefully my mom wont keep stressing about driving their car. I am going to put most of the money on the bills and then hopefully Ill be down in utilization, feeling better to make a decision, and can find a reliable car. I am however still going to try to get a used paid for car, as I think it would be better in the long run to have that to take to work, and then maybe next October get something nice after I save a good amount of emergency money up, and can feel more secure. Now all I have to do is figure out what I want to get, because I need something that can get through snow since this is my first year in a long time trying to get through the winter, and I wont have my dad to help shovel me out Good thing is I only have to get off of my block, and Im free and clear on major roads...but last year the block was HORRIBBLEEE!!! No one did the street or driveways...not sure if a sedan will get me on my lonesome out of spots

[mo_dingo]

If you can keep borrowing your mom's car, that would be very advantageous. I borrowed my dad's 1984 Maxima for about a year due to a lack of credit. It sucked so bad, but it did allow me to save a lot of money!

Once you have saved enough for a decent down payment on the newer car, and you feel comfortable with your debt levels, you should hopefully be able to get a loan. These steps will also help:

1) Document your debt history for the past few months, so you can show the CU that you are serious about reducing debt.
2) Have copies of old and new credit reports to show the CU that you are serious about improving your credit (and avoiding more negative accounts)
3) Have the car and purchase price documented before you show up to the CU again. That way they have a specific amount that they can approve you for.

Are you a member of a credit union? They are very lenient with loans but they usually want you to use them as your primary bank. As long as you buy the car at a good price, so you are not upside down, the decent down payment will mitigate the risk to the credit union. That way, if they need to, they can repo the car and sell at auction and not take a loss. If you look at it from that perspective, you should be able to calculate the proper purchase price and down payment.

Lastly, if you do go to a dealer to buy the car, remember their asking price is much higher than their floor price (lowest they are willing to take). They either bought the vehicle at an auction or purchased it as a trade-in. Either way, they likely payed anywhere from 15-30% below FMV for the car. Know what the car sells for on the market, start with a bid of 20% below FMV, and stay firm. They will try all sorts of tricks, like proposing a 72 or 84 month loan, or no money down, "extended warranty" or whatever. All of these are tricks to get a high purchase price. If they will not budge as much as you think they should, slowly start backing out of the deal. If they still wont budge, start walking out the door. If they still wont budge, move on. They are assuming that a sucker will come in and buy the car some other day. If the car has been on their lot for over 2 months, they will be willing to negotiate. Lastly, they will always try to tack on fees for processing the title/registration paperwork ($500-$1500). Refuse any of these fees. They should do it for free!

If a dealer financed the purchase at auction, he will probably have 90 days to pay the entire balance of the loan. If he can't sell it within 90 days, he will likely have to take it back to auction and sell it for a loss. Ask the dealer how long he has had the car before you start negotiating - this may be used for leverage. Don't tip your cards though, if he thinks you are an insider, he may stonewall.

Hope this helps!

[uptomyneck]

If you can keep borrowing your mom's car, that would be very advantageous. I borrowed my dad's 1984 Maxima for about a year due to a lack of credit. It sucked so bad, but it did allow me to save a lot of money!

Once you have saved enough for a decent down payment on the newer car, and you feel comfortable with your debt levels, you should hopefully be able to get a loan. These steps will also help:

1) Document your debt history for the past few months, so you can show the CU that you are serious about reducing debt.
2) Have copies of old and new credit reports to show the CU that you are serious about improving your credit (and avoiding more negative accounts)
3) Have the car and purchase price documented before you show up to the CU again. That way they have a specific amount that they can approve you for.

Are you a member of a credit union? They are very lenient with loans but they usually want you to use them as your primary bank. As long as you buy the car at a good price, so you are not upside down, the decent down payment will mitigate the risk to the credit union. That way, if they need to, they can repo the car and sell at auction and not take a loss. If you look at it from that perspective, you should be able to calculate the proper purchase price and down payment.

Lastly, if you do go to a dealer to buy the car, remember their asking price is much higher than their floor price (lowest they are willing to take). They either bought the vehicle at an auction or purchased it as a trade-in. Either way, they likely payed anywhere from 15-30% below FMV for the car. Know what the car sells for on the market, start with a bid of 20% below FMV, and stay firm. They will try all sorts of tricks, like proposing a 72 or 84 month loan, or no money down, "extended warranty" or whatever. All of these are tricks to get a high purchase price. If they will not budge as much as you think they should, slowly start backing out of the deal. If they still wont budge, start walking out the door. If they still wont budge, move on. They are assuming that a sucker will come in and buy the car some other day. If the car has been on their lot for over 2 months, they will be willing to negotiate. Lastly, they will always try to tack on fees for processing the title/registration paperwork ($500-$1500). Refuse any of these fees. They should do it for free!

If a dealer financed the purchase at auction, he will probably have 90 days to pay the entire balance of the loan. If he can't sell it within 90 days, he will likely have to take it back to auction and sell it for a loss. Ask the dealer how long he has had the car before you start negotiating - this may be used for leverage. Don't tip your cards though, if he thinks you are an insider, he may stonewall.

Hope this helps!

Thanks! I had gotten info on doing dealer auctions this weekend as well!!! Yes, I think since my debt will be down I'll be putting less in BOA and more into the CU, when I go to my credit union by then majority of my check should no longer go to the "bills" and more to my pocket, so they will see me more so as my main bank.

[uptomyneck]

Just an updated, I reapplied two weeks ago, and was approved online, with no documentation needed with BECU. Received $30k approval with 4.4% rate. Brought a 2009 Nissan Maxima SV and am so happy!

[MarvBear]

congrrrrrrrrrrrrrrrrrrrrrrrrrrats