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Discussion Starter #1
Hello all. I'm new here and I was wondering if you could give me sone advice. I'm 21 work for min wage ($10.00 in California). I really want to buy a FiST, but I don't know how the new car buying process goes. I'm coming from a 2001 Focus S2. I'm really interested in buying a Molten Orange FiST from a dealer or Carmax. I'm not sure if buying used or buying a new one from last year would be more affordable. I don't have any bills except for insurance. I'm sure my insurance would go up slightly. I don't know anything about apr or payments. Can anyone give me any insight to the new car buying process?
 

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Here are the basic facts --- like 'em or not. If you don't have 20% to put down on the car, you can't afford it. Never, as in NEVER EVER buy a car with less $$$ to apply to the down payment. That way you are never "under water" on the loan. That is you are never stuck in the position of owing more for the car than the car is worth. (that way if you loose your job, become disabled, whatever, you can sell the car and pay it off) Dealers will ALWAYS sell you another car to get out of owing more on the first one, only to put you deeper into the well of debt.
ALWAYS check loan rates at your local CREDIT UNION (as opposed to your bank). You can always do a Credit Union Direct Loan (CUDL) if the rate from the dealer is more than the rate from the credit union. They will be able to give you a chart that tells you how much you payment will be per $1000 borrowed, at various rates of interest. (also available on the interwebs) This will tell you how much you can afford.

Now a piece of personal advice..... never allow your payment to be more than ONE WEEK of unemployment income. That way if you do get laid off, you can keep the payments going and not ruin you credit rating. (and KEEP THE CAR)
 

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Zormecteon makes some valid points. I might say 10% is the minimum down payment. The more you put down the lower your payment obviously. But it also shows discipline and a little extra income. You aren't spending every penny before you get paid again. There are a bunch of variables to consider before you buy. I am going to leave most of those alone. The big one being can you afford a new Fiesta ST. Unless you live with your parents I don't think you can on minimum wage. But it all depends on how you spend what you earn. How much debt you already have, what you could sell your current car for and a bunch of other factors. So here is my step by step guide to buying a new car.
First join a credit union. I would recommend this regardless. Most will have a loan calculator on their website. Look at the interest rates then enter a bunch of numbers recalculate it and take notes. Figure $20K as a ball park price for the car. Add 10% for tax and licence. I paid a little less than that but it wasn't easy. Enter different down payment amounts. Be realistic! What can you actually get together for the down. If you decide you can afford it then apply for the loan. This is called getting pre-approved. The dealer will sell you the car whether you can afford it or not. This is a good way to get in over your head. If the credit union won't loan you the money then you can't afford the car. This is my full stop point. If the credit union won't loan you the money you can't afford the car!
Now for dealing with the dealer. They are NOT your friend. They want to sell you a car period. They will do whatever they can to distract you from what you are going to pay for the car. A favorite tactic is to ask you what monthly payment you can make. This is where being pre approved comes in. Tell them you are pre approved and that the price of the car is all that matters. They will still come at you with sheets showing different monthly payments. Ignore all of the numbers except the price of the car.
Another number to ignore is the dealer invoice. It is fiction. They will tell you they are losing money at that price. That is a lie. They will not sell you the car at a loss so don't worry about them.
They will also try to upsell you all kinds of crap At the beginning of my negotiation they ran the car up to $30K with crap. Clear coat, upholstery protection, two kinds of security systems, service contracts, extended warranties and more. They will also try to sell you this at the contract signing portion. No thank you. Repeat as needed.
This price is for today only!!!!! Bullshit.
My main point is focus on the price of the car. PERIOD! They do this for a living. They have mastered the art of selling to their advantage. They will do all kinds of stuff to distract you from the bottom line. Do not let them do that, keep the price of the car clearly in sight. The salesman will act like your friend and then they will bring in other people with the price they want you to pay. They had 3 or 4 people working on me. It took 5 hours to get them to the price I wanted to pay. Again this is the advantage of being pre approved. You know what you can afford. Don't pay more than that amount.
Finally if you get stressed out walk. You can come back later. The dealership isn't going anywhere and they will still want to sell you a car tomorrow. In fact if you walk out you can count on getting called everyday there after until you tell them you have bought a car and are no longer interested. They do not want you to walk. There is too good of a chance that you will go to another dealer and buy there. If you walk you will probably be unhappy with them and will go to another dealer and buy. That is what happened with me. I went to one dealer and they wouldn't come down. A week later I went to another dealer and they came down and I bought. First dealer lost the sale.
Hope this helps. Sorry if it rambled.
 

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Discussion Starter #5
I don't have any credit. I live at home and have no bills to pay. I can probably sell my car for $3,500 since it's a limited edition.
 

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I don't have any credit. I live at home and have no bills to pay. I can probably sell my car for $3,500 since it's a limited edition.

What makes your car a limited edition? And just because the kelly blue book says it's worth $3500 doesn't mean it's $3500. Take into consideration any dings, scratches, wear and tear on things like tires and brakes. Honestly, it sounds like you might be in over your head. $10/hr is 20k per year. Even if you bought the car used at say 18k, that's like 90% of your yearly income. You haven't taken the time to account for gas, insurance, maintenance for the car or whatever else may come up. Honestly if I were you, don't do it. You will be swimming in a pool of debt that may not be easy to get out of. And if worse comes to worst, say you lose your job you won't be able to afford the car and will lose it. Then you will have a repossession on your credit and it's takes a LONG time to get that off your credit report.
 

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If you can get the car out the door for $21,000 to $22,000 that would be $10,500 to $11,000 down. If you can do that then you might be able to pull it off. Get an insurance quote for full coverage and find out how much that will be.
Hard to say what your car is worth. In the end it is only worth what someone is willing to pay for it.
 

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Discussion Starter #9
I wouldn't mind if it's used with 20,000 miles. I've seen used ones for 17,000-19,000
 
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