After some careful examination, I decided that getting that ’99 Civic would have been an awful $9500 mistake. Seriously. Luckily my bank would’nt’ve financed it; they turned it down because it was a year too old. After discussing financing with the dealer, they took my credit info, checked my history, and made me an offer: they “sweetened” the deal by dropping the sale price to $6650 + TTL, and “threw in” a 2-year service contract.
So, with $1200 down, about $230ish a month for 3 years, I took those numbers to my boss who plugged them into his spreadsheet. He calculated that the interest on the finance was a whopping 22.1%, and that interest charges would amount to over $2500 for the finance term. Sickening.
I turned the offer down, and the dealer offered to explain things in further detail, saying I’m operating on partial information and that I should give him and the business manager a chance, etcetera. I still declined, and he offered to let me test drive other cars and so on; I drove a Neon and was completely unimpressed. He showed me a “sample” spreadsheet with the offer terms: his sheet said 11%. It was then I noticed that the 2-year extended warranty was actually on top of the price of the car — a trump-up to increase the finance amount. Gracefully, yet fatiguedly, I declined the offer. I most likely will not be returning to that dealer.
I learned this week that I can go to my bank and get prequalified for auto loans; it was my assumption that I had to have a vehicle already picked and ready to buy. Not so. Thursday morning I applied with my bank for a personal, unsecured loan (Wells Fargo’s version of prequalifying). The banker left in her notes that this loan will be for a car, so there will be collateral. We played phone tag on Friday, so I don’t know the outcome of the application, whether I got accepted for my requested amount or if they’ve made a counter-offer, or if I’ve been declined. Knowing this bit of information will affect what I’m looking for.
Until then, I’m resting from the used car battle.