So, a few days ago I received an email from my car dealership. They would like me to trade in my 2009 Yaris for a 2011 Yaris. Traded in, including all the taxes and registration and fees, they would come back with a monthly payment of $5 less per month.
I haven’t asked for more specific details yet, but is this even something to think about? My current loan is 0% and I think if this new loan has interest, I would balk, but if it’s also 0%... Well hmmm. A car two years newer is always nice, even if I have car payments for a few years more, but at theoretical 0%, it would hard to say no. Right?
What else would I have to ask besides interest rate? The Yaris's (Yari?) are pretty bare/standard, so it’s not like I would be trading down in features… What a sales pitch. I can't think of the downside, and there's got to be one.
What do you think? I’m not sure what I think. My husband isn’t sure what he thinks either.
Car Deal?
July 13th, 2011 at 11:32 pm
July 14th, 2011 at 01:29 am 1310606999
What you are failing to look at, is how much you owe on your Yaris. I can absolutely 100% guarantee that you owe LESS on your current car, and have FEWER monthly payments left, than if you were to finance a brand new one.
So, no, do not take that deal.
Also, your first mistake was purchasing a new vehicle. See my blog about buying used vs. new.
July 14th, 2011 at 01:49 am 1310608174
July 14th, 2011 at 02:14 am 1310609661
I don't see any reason to take the *deal.*
July 14th, 2011 at 03:21 am 1310613677
Do you need a new car? If not, then there is no reason to spend money you don't have (i.e., take on MORE debt). Look at your goals. Focus on those.
July 14th, 2011 at 12:32 pm 1310646762
Am I right in thinking that you'll be rid of car loan 1 by 2013? That's only a couple more years of payments then it's gone
July 14th, 2011 at 04:00 pm 1310659232
I think ThriftoRama hit it on the head. I crunched the numbers last night, and unless they pay me more for my trade in than it’s worth and/or have me pay way less for the new car than what they want, it has to be a 6 or 7 year loan. Yikes. That’s a long time for a car. Plus, I’m pretty sure it would get rid of my 0% financing.
No new car for me, which strangely enough makes me happy. I love my current car.
And, no worries, I only look at the monthly payments for the 0% financing. If there is interest involved like (used) car #2, then I look at the total amount and how much we’ll pay by the end which stressed out the car salesman when we purchased car #2. :-D It was fun when I wouldn’t give him a monthly payment range despite multiple times of him asking. I though he was going to pull out his hair and stomp his feet.
@Scottishgirl - It will be done by the end of 2013 before the Russian Olympics only if I can come up with some extra payments, otherwise it will carry on until that April I think, which isn’t too much longer. I agree though, it’d be nice to free up that extra monthly cash by then and not worry about “late” payments or overpayments while we’re overseas.
@uRabbit – I was not debating new vs old car purchases. I was only asking about this “deal” because I couldn’t see the catch and it didn’t make sense to me. I am VERY happy with my new car purchase (in 2009) at 0% financing that did not lose thousands when I drove off the lot and has never been close to being underwater or need repairs as of yet. I will drive this car until its dead and I put on just under 20,000 miles per year. Then again this isn’t a fancy car that has a bazillion features worth tens of thousands of dollars upfront. If I had bought the same car used (a 2006 or 2007 Yaris in 2009), I would have saved around $1500 since I would have had an interest loan (no 0% for used cars). No thanks. I prefer to be the only owner with a car that will be around for 2 to 3 years longer for that amount of savings. But, I do agree, taking this current “deal” would be a "mistake".
July 14th, 2011 at 05:21 pm 1310664072
July 14th, 2011 at 11:37 pm 1310686679
July 15th, 2011 at 06:46 pm 1310755572
July 15th, 2011 at 06:51 pm 1310755908
Jerry