First time buyer question
 

So i went into a dealership today to look at an rx-8. it was a 2004 w/ 16k miles, all the options(heated leather, navi, everything) but when we started talking about financing i got really pissed off. the sticker price was $22,094, their offer was $499/month for 72 months. i did the math, that is a 17.8% interest rate and extrapolated out would be $36,000. so fuck that.

here is my question. I'm am i recent college grad who landed a pretty good job but i dont have much credit built up.

i can afford 499/month but i was expecting something like 450 for 60 months. so does their offer sound typical or is it BS?

Also, any other first timr buyer advice you may have would be greatly appreciated

Tell them to stuff it. You can do better than that - check with your bank to see what kind of rates you can get, if need be. Also, that price seems a bit jacked up. I'd be looking to pay closer to 20 grand or so.

I could go on for days with car buying tips, but I'll spare you. The biggest bit of advice I can give you is have a number in mind, but never tell the dealer what that number is and never EVER negotiate in terms of payments - deal in absolutes - "The car will cost $xx,xxx." (If you give them what you're willing to pay, they'll simply work on getting you to pay more)

Otherwise, just remember to let them come to your numbers - always give them a number that's just slightly lower than the lowest you think they can go. This gives them very little to work with, but if you go too low, they'll just think you're screwing with them. Don't act excited (and don't let them excite you into a stupid decision), they'll often detect excitement and know they're basically ensured a sale - don't give them the power. Finally, most importantly, if a deal sounds borked, it probably is. Don't be afraid to leave and sort everything out. Despite what they'll try to tell you, both the car and the deal will, in fact, be there tomorrow.

Your credit must be pretty bad if they offered you 17.8 %

I'd run your credit report or at very least get a credit card with 6 months to a year of perfect payments and no more than 50% of your limit charged at a time, to try and clean up your credit.

Payments like they were offering you, would be like payments for a new car. What do you have for a down payment?

That is rather steep. My credit is in the average person's range and when I bought my first car they gave me 10% over 5yrs.

well i left this out, i talked them down to 20k for the car, but we never figured out exactly what it would make the monthly payments. regardless it was still rediculous.

its not that my credit needs cleaning up its that i dont have any to start with. I've been in college for the last 4 years and didnt really have the need to put a lot of things on my credit card so my credit is like 630.

the $499 for 72 month they were offering was with a down payment of only $500

i figure that i'll try to find a bank with some more reasonable rates but its a time consuming process. if anyone knows which banks are the best for my situation please let me know

Your college or you work place may allow you to use their credit union and you can get much better interest

Check your local bank - the one you have your checking account with - I am sure they will have something for less than 17% - Since it is a used car - you might check and see if another Mazda dealership can do better - they trade these cars back and forth all the time -that is how I got my blue...

You need a cosigner. If your parents have good credit and will cosign a loan for you do that. Second, find a local credit union and see what their rates are. Usually they are the lowest. Don't go back to a dealer without pre-approval for your own financing from a bank or CU. Rates are commonly a couple percent higher on a used vehicle, but 17% is rediculous.

The hard news. If you can't get a co-signer don't finance an expensive car. Build some credit first. The last thing you need is to fuck your credit up even more.

I agree with other posters: shop around for the best loan deal, such as a credit union. Also, you may want to put aside $450 or so a month for a few months or a year -- this is under the assumption that you have a car now you can drive and that you can afford to save the money, as your first post claims -- so that you can put down a lot more on a car. Finally, take steps to increase your credit score. Be patient: I looked for months for the right car at the right price at the right interest rate (which I found at a credit union).

+1

Dealers ALWAYS try to negotiate in terms of payments. They will ask you what you are willing to spend per month, and then they will sell you on their in-house over-priced financing that stretches the payments for years longer than you should be paying on a car. The payment looks good, so you never argue over their inflated price. A lot of customers eat that up.

The red flags should go up when you sit down to sign the paperwork and the finance officer says: "You should buy our gap insurance because you are going to owe more on the car than it is worth for the next few years."

This is just the finance guy trying to make a buck. I know - I am a finance guy. ( for a toyota dealer ) GAP is a good idea for ANY new car.

And as for the thread starter . .. . .do you have NO credit at all? Not even a credit card? The only way you can get that bad of a rate is if you have NO credit except BAD credit. (like a couple cell phone bills that never got payed.)

Let me put this in to perspective - - - - - - When my credit was bad, I bought a $2000 car, 0 down, $200 per month for 2 years. That hurt, but it did raise my credit score to allow me to buy a brand new RX8 for less than $400 per month for 72 months. And that included not only 0 down, but I had to bury $1000 from my trade in.

Pull your credit ( freecreditreport.GOV!!!! NOT COM!!!!! .GOV )
Find a local bank that will finance you, then go see a dealer, you will have more fighting power when you know your credit and can just write a check. ( check from a different financial institution. )

Now - focus on price, agree to ANY payment, just focus on price. If they think they are gonna get $ on the back end ( financing ) they will lower the price to make you happy. Once you are in the finance office, tell them you are paying cash. ( which is the check from another bank )


Good luck

I'm in a similar position. I just graduated, got a decent job, and REALLY want an rx-8. I would be able to make a pretty good sized monthly payment but I think I'm going to try saving the money instead. My goal is to put $1000 in a high yield savings account every month. I can get 5.05% interest instead of paying 10% or what ever the loan would be, so I'm guessing I would be saving about 15%( i haven't done the math)

In two years I'll save $24,000 and gain about $1000 in interest. Plus I'll be over 25 so I get lower insurance too. Hopefully I can hold out that long. I have two savings accounts online that give a $25 bonus when you open them.

Just my .02.