Paying for next car- cash or finance?

[q-school]

the fancy new cars display from the rear camera onto the dashboard when you put the turning signals on and have sonar and audible and visual warning to tell you if there is a car in your blind spot.  the biggest problem is if the side view mirror needs to be replaced now theres a lot of electronics that go into them.

 

[childay]

Zaphod wrote:

What, I thought everyone knew by now the “blind-spot” exists only if you dont set up the mirrors correctly?

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Hah NO they do not know that.  And even when I try to tell someone they don't listen..

[Zaphod]

Donnie wrote:

LizOB wrote:

JWeb wrote:

New Honda Odyssey’s are $46k. We just bought a 2014 Honda Odyssey Touring for 28K with 66k miles on it.  And I bet that most of us couldn’t tell the difference the new one and the old one if they just put a 2017 sticker on the 2014.

Also, you’re paying more most of the time to have 0% financing (or 1-2%). They build that into the price.

Also, don’t trade in your car. We were offered $5500 for our 2008 Honda CR-V from the dealer. We just sold it for $8500 ourselves. That’s a $3000 difference for about 2 hours of work. WCI may not even make that much per hour.

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The highest trim one is 46k, I’m thinking about doing one of the lower-tier trims.

Agree on no trade-in: a few years back when we replaced my husband’s car the dealer offered something like $1500 and Carmax gave us $5000. Getting the appraisal from Carmax took about an hour, definitely time well-spent. (We did finance my husband’s new car at 1.49% but we didn’t have the cash at the time because all extra cash was being used to pay off my student loans at a higher interest rate)

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I suggest going for the highest trim.  You deserve the world’s most expensive vacuum cleaner 

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Noticed they have a screen for the "blind-spot"? What, I thought everyone knew by now the "blind-spot" exists only if you dont set up the mirrors correctly?

I dont have a blind spot in mine, except for after the car wash, when I have to re position them. Reminds me of the dumb 10/2 advice from yesteryear. Hopefully we are getting some evidenced based driving tips for the next generation.

[The White Coat Investor]

FIREshrink wrote:

just bought a new vehicle and financed 100% over 4 years at 1.94%. sweet deal.

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I'm financing my next one right now at -10%. Even sweeter deal.

[JWeb]

Donnie wrote:

I suggest going for the highest trim.  You deserve the world’s most expensive vacuum cleaner

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We didn't get the one with the vacuum cleaner. But thanks for telling me what I deserve.

[Donnie]

LizOB wrote:

JWeb wrote:

New Honda Odyssey’s are $46k. We just bought a 2014 Honda Odyssey Touring for 28K with 66k miles on it.  And I bet that most of us couldn’t tell the difference the new one and the old one if they just put a 2017 sticker on the 2014.

Also, you’re paying more most of the time to have 0% financing (or 1-2%). They build that into the price.

Also, don’t trade in your car. We were offered $5500 for our 2008 Honda CR-V from the dealer. We just sold it for $8500 ourselves. That’s a $3000 difference for about 2 hours of work. WCI may not even make that much per hour.

Click to expand…

The highest trim one is 46k, I’m thinking about doing one of the lower-tier trims.

Agree on no trade-in: a few years back when we replaced my husband’s car the dealer offered something like $1500 and Carmax gave us $5000. Getting the appraisal from Carmax took about an hour, definitely time well-spent. (We did finance my husband’s new car at 1.49% but we didn’t have the cash at the time because all extra cash was being used to pay off my student loans at a higher interest rate)

Click to expand...

I suggest going for the highest trim.  You deserve the world's most expensive vacuum cleaner  

[LizOB]

JWeb wrote:

New Honda Odyssey’s are $46k. We just bought a 2014 Honda Odyssey Touring for 28K with 66k miles on it.  And I bet that most of us couldn’t tell the difference the new one and the old one if they just put a 2017 sticker on the 2014.

Also, you’re paying more most of the time to have 0% financing (or 1-2%). They build that into the price.

Also, don’t trade in your car. We were offered $5500 for our 2008 Honda CR-V from the dealer. We just sold it for $8500 ourselves. That’s a $3000 difference for about 2 hours of work. WCI may not even make that much per hour.

Click to expand...

The highest trim one is 46k, I'm thinking about doing one of the lower-tier trims.

Agree on no trade-in: a few years back when we replaced my husband's car the dealer offered something like $1500 and Carmax gave us $5000. Getting the appraisal from Carmax took about an hour, definitely time well-spent. (We did finance my husband's new car at 1.49% but we didn't have the cash at the time because all extra cash was being used to pay off my student loans at a higher interest rate)

[Megalops]

Honda has a nice inventory website that shows not only what's on the lot but also what that dealer has "in transit". Dealer websites are very hit and miss for current vehicles.

[JWeb]

New Honda Odyssey's are $46k. We just bought a 2014 Honda Odyssey Touring for 28K with 66k miles on it.  And I bet that most of us couldn't tell the difference the new one and the old one if they just put a 2017 sticker on the 2014.

Also, you're paying more most of the time to have 0% financing (or 1-2%). They build that into the price.

Also, don't trade in your car. We were offered $5500 for our 2008 Honda CR-V from the dealer. We just sold it for $8500 ourselves. That's a $3000 difference for about 2 hours of work. WCI may not even make that much per hour.

[Craigy]

Megalops wrote:

Timely post for us as I just finished a spreadsheet of local (within 2 hours) inventory for the specific 2018 Odyssey we want. Time to start emailing dealers. We planned to pay cash but last night the thought to finance if we could get 1.5% or less did cross my mind. I don’t think we would spend more by financing as we are pretty set on trim level and there doesn’t seem to be much wiggle room with the prices, but that’s why I’m emailing so many dealers. Will likely pay cash in the end and definitely drive it 8-10 years.

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That's a benefit of shopping a Honda.  It's super easy to compare prices at different dealers since Honda doesn't offer options, only different trim levels.  You can email 20 dealers for their out-the-door price on a '18 Odyssey EX and prices should be readily comparable.

Also, you should be able to shop these without knowing each dealer's inventory, although it might be nice info to have for test drives and whatnot.  Dealers can order you a car or will buy/trade inventory from other dealers, so they're not limited to what they have on the lot.  Plus they have new inventory coming in all the time (and are selling new cars everyday) so your spreadsheet might not give you the whole picture anyway.

[Craigy]

Donnie wrote:

The general rule of personal finance is not to borrow money for buying consumables, but as I’ve said before, the car is the most leveragable asset most people will ever own. Can’t get 100% financing at less than 1% rates on anything else.

The best financing is from the OEM. If it is a new car and you’re getting OEM financing, the dealer doesn’t care if you pay cash versus finance, so he’s not going to give you any better price for that. Only used car dealers typically care about cash versus finance because usually they are forced to eat a discount from the lender, i.e. You buy a car for $10k, put $2k down and finance $8k. The Lender will typically buy the $8k loan from the dealer at something less than $8k depending on credit quality of the buyer.

My advice is to find a car you could pay cash for. If you can get 1-2%loan, take it and keep your cash invested. At 3-5%, it becomes a tougher call. At 6%+, you shouldn’t take a loan in my view.

You also generally shouldn’t buy new because the depreciation curve is steepest in the early years, but it’s ok to buy new as long as you don’t make it a habit.

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Manufacturer financing isn't always the best, for some brands depends on whatever special they're offering.  Some brands tend to offer low rates like 0% or 1.9% all the time, some don't.  E.g., my local credit union offers 1.99%, so if I was buying a new Lexus and Lexus Financial was only offering 3.9%, I shouldn't use the OEM financing.

But you're right, unless the dealer is lining up their own financing for you and making money off it, you are the same buyer if you're paying cash vs. financing with the manufacturer offer.  Virtually everyone on WCI forum is going to be a "well qualified buyer" or "well qualified lessee" and qualify for the best rates, so the old adage of "don't tell them you're paying cash until the last minute" and the like doesn't really help you out on price.

[Megalops]

Timely post for us as I just finished a spreadsheet of local (within 2 hours) inventory for the specific 2018 Odyssey we want. Time to start emailing dealers. We planned to pay cash but last night the thought to finance if we could get 1.5% or less did cross my mind. I don't think we would spend more by financing as we are pretty set on trim level and there doesn't seem to be much wiggle room with the prices, but that's why I'm emailing so many dealers. Will likely pay cash in the end and definitely drive it 8-10 years.

[FIREshrink]

just bought a new vehicle and financed 100% over 4 years at 1.94%. sweet deal.

[Donnie]

The general rule of personal finance is not to borrow money for buying consumables, but as I've said before, the car is the most leveragable asset most people will ever own. Can't get 100% financing at less than 1% rates on anything else.

The best financing is from the OEM. If it is a new car and you're getting OEM financing, the dealer doesn't care if you pay cash versus finance, so he's not going to give you any better price for that. Only used car dealers typically care about cash versus finance because usually they are forced to eat a discount from the lender, i.e. You buy a car for $10k, put $2k down and finance $8k. The Lender will typically buy the $8k loan from the dealer at something less than $8k depending on credit quality of the buyer.

My advice is to find a car you could pay cash for. If you can get 1-2%loan, take it and keep your cash invested. At 3-5%, it becomes a tougher call. At 6%+, you shouldn't take a loan in my view.

You also generally shouldn't buy new because the depreciation curve is steepest in the early years, but it's ok to buy new as long as you don't make it a habit.

[StarTrekDoc]

--you know this is another variation on the theme of debt incur/payoff vs invest over time -   :P