Talking About Cars

It’s a good time to be a car buyer.  The uncertain economy and recent auto manufacturer struggles mean that there are lots of good car deals to be had.  But what if you want more than just a good deal?  What if you want something that’s both cool and affordable?  Never fear, because there are a number of cool cars that can be bought for less than $20,000.  The following are five of them.

When it comes to the 2009 Honda Fit, Car and Driver magazine wrote, “If there’s a better combination of thrift, practicality, and fun-to-drive, we haven’t seen it yet.”  High praise indeed for this front wheel drive, five passenger, 5-door wagon.  For the 2009 model, the wheelbase has been made a little longer and the car is a little more of everything – more room, more muscle and more spirit.  But best of all?  This subcompact starts at just over $15,000.

Honda also scores with the 2009 Civic.  The body style is sleek – making it look much more expensive than it is – and the performance solid.  For these reasons, the Civic has consistently been one of the best selling small cars on the market.  The interior cabin is made of quality materials and this year, Honda has slightly modified the front end for an updated look.  The base starting price for the Civic starts at just over $15,000.

The folks over at Edmunds call our next choice “…a hoot to drive,” with its “…polished interior, comfortable ride, solid German engineering and strong power.”  That car is the 2009 Volkswagen Rabbit.  The Rabbit handles as well as it rides – in fact, the Rabbit shares its foundation with the more expensive Volkswagen GTI.  For this reason, Edmunds calls the Rabbit “…one of the most entertaining entries in the economy car market.”  Just take a look at the full power accessories, cruise control, 60/40 split rear seat, tilt and telescoping steering wheel and CD player with 10 speaker stereo and you’ll pronounce it “cool” yourself.  The base list price for this German coolness is just over $16,000.

Next up is the Hyundai Elantra.  One of the really cool things about this car is that it provides both reliability and quality, without sacrificing affordability.  It comes with a great warranty and U.S. News recently named it the Best Car for the Money in the compact class.  The seats are some of the most spacious and comfortable that you’ll find in any small car – all you have to do is sit back and enjoy the great fuel economy you’ll be getting.  Another really cool feature of the Elantra is that with a base price of just over $14,000, you have room to add some options and still stay under your $20,000 budget.

The last car on our list is the 2010 Mazda3.  Love it or hate it, the exterior styling is distinctive.  But it’s the energetic engine and upscale amenities that really catch the eye.  The navigation system on the Mazda3 is widely touted as one of the best, most intuitive models available today.  Bluetooth connectivity is also available as a standard feature.  This sporty car is fun to drive, and with a base price slightly over $15,000, you can add some options and still stay on budget.

The smart thing you can do to get the best deal on a new car is research and more research. If you’re armed with knowledge before you walk in the dealership you’ll be more resistant to high-pressure sales tactics, and you may be able to resist a skilled salesperson’s subtle tactics, too. As solicitous and helpful as a salesperson can seem, they’re object is not really to help you buy the car you want, but to sell you the car they want to sell you. Knowing what you want is the first step to getting a good deal on a new car.
Don’t even walk around the dealership and give a salesperson a chance to start making suggestions until you know the car you want to buy. It’s a good idea to have a few options in case the car you want isn’t available or the price is a bit out of reach, but even on these know exactly what you want and what you’re wiling to compromise on.
Know your budget before you look for a new car loan, too. Start with your bank or credit union, consider borrowing against any investments or life insurance policies you may have (as those often give the best rates) and then finally look at the dealership financing after you’ve gotten quotes and numbers from other people.
When you’re at the dealership, negotiate the price of the car before you’ll discuss financing. Also, don’t talk about a trade-in as you’re negotiating. The crafty salesperson will calculate in his or her head and raise the price of the car according to the amount you can get on that trade-in. By making sure of the car’s price first you can actually get something out of your old car.
If your asked point blank if you have a trade-in and you don’t want to say no only to turn around and mention the trade-in later, then you should start out as if you might purchase it for a child or as a gift where there’s not a trade-in, and then after the price is quoted, “decide” you might want one for yourself and mention your trade-in vehicle then when it’s too late for the salesperson to up the price.
Chances are pretty good that if you didn’t use your car as a trade-in and sold it privately you’d make more money from it, so the trade-in may not be an issue anyway. But if you want to consider it, find out the blue book value of your vehicle and look at similar vehicles that are for sale so you’ll know if you’re getting a good trade-in value or if you’d better off selling it privately.
Also, while it’s good to have your budget firmly in your mind, don’t ever tell the salesperson that you’re only willing to pay X dollars per month. You’ve just given the salesperson far too much information and leverage and have just about guaranteed that you’ll end up paying much more than you need to on your new car loan.

If you’re about to start the process of financing a new car purchase, there are some things you need to do before you even look at cars or shop around for the best car loan. You can take care of some things early on that will make the whole process easier for you. You can also lower your chance of being turned down for a loan if you do some prep-work.

The most important consideration when you’re ready to buy a new car is determining if you can really afford it. Today, new car loans are harder to get than ever before. People with great credit are being turned down when they’ve never had a problem, just because the institutions they use aren’t lending money. So keep that in mind when you start looking for financing and don’t get discouraged if you’re turned down. You can shop around and hope for a better result elsewhere.

To minimize your chances of rejection, the best thing you can do is be an informed consumer and approach the lender with the facts. If they see you’ve done your homework in regards to buying a new car and looking for financing, you’ve increased your odds of getting a new car loan already.

So look at your budget and really determine whether or not you can afford the new car you want at this time. If your projected monthly payment eats almost the rest of your monthly budget, then it may not be a good idea. Because chances are, the monthly payment you’re considering isn’t even high enough. If you took the sticker price of a vehicle and divided it up, added some interest and figured that as your monthly payment, youunderestimated.

You have to consider the monthly cost of insurance, as well, as it will be part of your new car expense. You might have added in the cost of the insurance you have now, but that’s less than you’ll pay when you purchase a new car. So with that in mind, call your insurance company and get some estimates. If you have a specific car in mind (and you should—knowing what you want can help keep your costs down) get a price quote for insurance. Ask for quotes on a handful of other cars that you would consider if you couldn’t get your first choice.
Now refigure your budget and see how it looks. You should be able to determine about how much a monthly car payment you could afford. Is it not enough? You can always figure the payments on those other options you gave the insurance company to try to come up with a combination that fits into your budget.

It’s important that you can actually afford the payment and the insurance, and that you know this before you even go for financing or to a dealership. If your budget really doesn’t allow for a new car purchase that you want, you can make a plan to save more for the new car financing down payment.

If you are looking at buying a new car, then you are probably worried about the financing.

Things in the current market can be a little tricky, and you may not find the same kinds of low cost financing opportunities that you may have found even as little as a year ago.

There are several different ways to think about how much of a payment you can afford on a new car.

When looking at a vehicle loan, you need to also consider all of the other obligations that you have each month. Taking on a new car loan is a long-term commitment these days. Some loans extend as long as five or six years, which is a significant period of time.

Experts often use a “rule of thumb” calculation to give a rough idea of the amount you can afford to spend on a new car payment.

For example, many experts say that you should calculate your monthly income, then subtract from it all of the set expenses that are non-negotiable. These would include rent or mortgage, utilities, food, required credit card or other payments, and any recurring transportation costs.

The amount that is left is your discretionary income. A car payment should be 20 percent or less of that remaining amount.

Naturally, you may be tempted to ignore certain bills when figuring that amount, since it will increase the amount you have available for a car payment. But this is actually a dangerous and unwise strategy that could leave you in a hole, and could make you lose your new car anyway.

Its better to know what you can really afford then take steps to either increase the amount of discretionary income each month or save for a larger downpayment in order to get the car you want.

The other choice, if 20 percent of your discretionary income is not enough to afford your ideal car, is to change the type of car you’d like to buy. Look around at other options – you may find something more affordable that meets your needs.

You should also consider expenses that are optional, but are ones you consistently incur. Fro example, do you eat out often? Is it something that is a part of your lifestyle that you would miss if your car payment prohibited it?

The next step is to find out the going interest rate on an auto loan for your credit rating. The easiest way to find out the going rates is to begin calling around to banks and credit unions and determine the general rate they are giving.

Some will say they can’t give you an accurate interest rate until they know your exact situation, but you can get round figures. They generally don’t differ greatly for an over-the-phone quote.

Use a payment calculator such as the one you’ll find at http://autos.msn.com/loancalc/newloan.aspx?pkw=PI&vendor=Paid+Inclusion&OCID=iSEMPI/. These calculators allow you to enter the price of a vehicle, the interest rate and the term of the loan to find a payment.

These calculators make it easy to compare the deals you get from a bank or credit union with the financing offered by the auto dealer.