New car purchase

[AaronMN]

Hello!

My wife and I are expecting our first in January and would appreciate some car buying advice.  We would like to pay cash and are looking in the $15,000 range for a cross-over type vehicle.  To do so, we are looking at around an April/May timeframe to purchase. 

Do any dealerships offer no payment plans for x number of months?  If so, do they offer that plan with no early payment fees?

If so, that would enable us to have the vehicle in time for the baby, and be able to pay it off within the x number of months.

Is this possible/advisable?  I'm not sure if my question is clear, so please let me know if more information is needed.

[Exflyboy]

You do know that just everyone is screaming "NOOOOOO!" at their screen right now?

New car.. worth 60% of what you paid for it the moment you drive it away... Are you mad?

[tracylayton]

I am confused, because I thought you said you want to pay cash, but then started talking about paying it off. Did I miss something?

[LowER]

Compound interest is the most powerful force in the universe (Einstein), and it either works for you or against you.  The choice is yours.

[Terrestrial]

I'm confused by 'we would like to pay cash' and 'do dealerships offer no payment plans'.  These statements conflict with each other.  If one wants to pay cash you don't need a payment plan.

I know dealerships offer no interest offers on new cars, I have rarely seen 'no payment' for any substantial period of time (you may find one with a month or two of no payment...maybe).  If you have the cash to purchase it probably isn't beneficial anyway, usually you have to chose between incentives, one being financing, or the other being a cash back/reduced price incentive.

Do yourself a favor and DONT buy a new car.  If possible also don't spend 15k.  But if you MUST spend an unnecessary 15k it will go a lot further on a gently used car, and not from a stealership.  I doubt 15k can even buy anything other than the most basic stripped down base new car, if one can be had at all after the couple thousand in taxes, new car expensive registration, various dealer fees and delivery, etc.  If you are looking for a crossover you can likely find a nice later 2000's toyota matrix or similar with tons of years left in it for less than 10k.

[AaronMN]

Hello!

I apologize for not being clear.  By "new", I mean new to me.  I will be purchasing a used.

For my dilemma, we want to pay cash.  We have zero debt.  We will have enough to pay in cash if we wait until next April.  However, that means four months with a baby using our current two door car.

As an alternative, if we could take out a loan without early pay penalties, we could buy the car in January, and then pay the loan off in April.

I was looking for thoughts on the early pay on a loan.  I have not done any research into this; I wanted to start here first to see if this is possible or if we should make due until next April.

[forummm]

http://forum.mrmoneymustache.com/share-your-badassity/nissan-leaf-almost-paying-me-to-drive-it/

[Terrestrial]

If you end up needing to borrow money I doubt you will have a problem finding a loan from a bank or credit union that does not have a prepayment penalty.  I just checked Wells Fargo and there is no penalty, I would assume most every major bank is similar. Also note you don't have to buy a car from a dealership to get a loan, most major banks will do private party purchase as well.

I'm assuming by how you phrased it that you will have MOST of the 15k saved and just need a few more months to get up to the full amount?  (As opposed to not having any of the money then getting a big lump sum in April as if from a bonus or similar?)

You can always just put 10k or whatever you have down and take a minimal loan.  Less interest paid that way.  Auto loan interest isn't crazy right now but is more than you will be earning from most savings accts over that period.

[RWD]

Some dealerships offer 0% financing, which is almost what you're asking for, but that is typically on new cars only. If your price range is affecting the timing of your purchase have you considered adjusting your price range? You should be able to find something reliable and built within the last 5-6 years for less than $10k.

[Exflyboy]

Be very wary of loans from car dealerships.. the ones I have known you can't pay them off to save interest.. The moment you sigh you owe them ALL the principle and ALL the interest!

Don't ask me ho that is legal but that's what my friends got sucked into.

Frank

[ketchup]

Disclaimer: In my opinion, there is no reason (barring obvious exceptions such as if you are a racecar driver, food-truck owner, or chauffeur for a large bowling team composed entirely of rowdy German Shepherds) someone mechanically-inclined should ever need to spend more than say $3000-4000 on a car (max), and say $7000-8000 if you're not mechanically-inclined.  Those are maximums.  My two-vehicle fleet has a combined value of less than two grand, both have more than 150,000 miles on them, and they have plenty of life left in them.

My advice would be to lower your budget, and pay cash up front without any games.  Don't buy from a dealer if you can manage it.  Get something that will last a long time, do your best to make it last a long time (scheduled maintenance), and then drive it until the wheels fall off (then put them back on and keep driving it).

[retired?]

I've bought cars via loan and paid off immediately or quickly.  It was just more convenient.  I think it is the norm to not penalize early payments.....so much the norm that I never asked.

Don't tell dealer how you plan to pay until you have already selected the car and negotiated final price.  They often expect to make money via the loan.....as much or more than they made on the actual car sale.  Say you are not sure.  Negotiate on price, not "monthly payment".

That said, for a used car, I'd hesitate to buy from a dealer.  Look up on kbb.com to see the potential difference.  At 15k, could prob be 1500 difference.  You have to cover an extra middle man's costs. 

Not sure what you currently drive, but if it would be very inconvenient to load/access an infant in the back, then I'd go ahead and purchase just prior to birth.