Car buying Advice for the Mathematically Challenged?

Question

Right now I'm driving a '98 Nissan Maxima with about 138000 miles on it. It is going to need some major suspension work within the next year or so, and I'm tired of paying for 93 octane gas in the car (91 is the min, but we don't have that in my area).

I figure that I can get a trade in of $2000 for the car, and that would leave me about 2k in the hole on the car. I don't have an extra set of wheels, so selling it to a private buyer would be very complicated.

The question is... I have a payment cap of no more then $210 month and I will be carrying in 2k into a new load. I have average credit so will only have to worry about a moderate interest rate. My credit union has already told me that I would get approved for pretty much anything I need up to 20k.

Normally I wouldn't get a loan that stretches more then 4 years, but I don't really have the luxury to worry about that right now. So, taking the loan out for 5 or 6 to get a decent car is acceptable.

How large of a loan can I get and still maintain under $210 a month, and how new of a car do I have to have in order to get a bank to agree to a longer loan?

Answer 1

Most banks will not finance a used vehicle for more than 4 years and the interest rate will be about 1-2% higher than a loan on a new vehicle. There a lot of really good cars that sell under 20G, you should check them out. Huyndia, Honda, Chevrolet have some nice ones. You should really think hard and buy yourself a new vehicle. Also, don't count on $210 being your cap. Things aren't cheap anymore, but there are bargins to be found. If you can, wait until a holiday to buy a vehicle, most of the dealerships have sales and they have to sell all the 07 & 08 vehicles they still have on there lot so they can make room for the new 08 & 09's. Good luck.

Answer 2

If your credit union approved you for $20k, that would be about $387 per month (5 years at 6%) If you stretch it to 6 years it would be a payment of about $331 per month

If your maximum payment is $210, that would be a loan of about $10900 (5 years at 6%) or $12700 (6 years at 6%)

Depending on the interest rate you qualify for, these figures may be slightly different.

The car would probably have to be at least a 2005 or newer to qualify for a 5 or 6 year loan (at least that's my credit union's policy; yours may be different)

http://www.bankrate.com/brm/auto-loan-ca...

Answer 3

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