I think so too. Something doesn't feel right and I am the expert at having buyer's remorse. Besides that issue, remember I don't like Fords and I don't like new cars, but my opinions do not count in your decision. High mileage, ... Or "kilometerage", or whatever it's called in Canada, is not necessarily a problem if it was driven long distances on the highway regularly. Where I am, cars fall apart from road salt and rust long before engines give out. The fact that I'm still driving an '88 Grand Caravan means I don't care what my vehicles look like or where the wind comes sailing through, as long as I know it will get me back home.
From what I read here, I suspect you could look forward to fewer engine and transmission problems with this car compared to a lot of other models but you are still going to be putting money into it on a regular basis. I would feel better if you would keep saving until you find something you like closer to home. Many dealers will give you a 50/50 30-day warranty if they have faith in what they're selling you but you don't want to drive an hour to find out they can't get to the car for three days.
As for financing, keep in mind the monthly payments are just a tiny fraction of the cost of owning a car. Don't forget insurance, maintenance, license, repairs, etc. Too many young people spend every last cent on the car, then work to earn the money to make the payments. There's no money left to take Betty Lou to the movies and she don't like people with no money.
Now let me get into "teachur mode". A car loan is a nice way to start building a good credit rating but what you should watch for is the interest rate, not the amount of the monthly payments. Too many young people jump at the financing the dealer comes up with because they can afford that amount. Often the interest rate can be double what you would find yourself at a bank or credit union. Sometimes part of that interest goes right back to the dealer or salesman as a commission. No need for you to be paying that when it's easy to apply for a loan yourself. If a banker turns you down, (and they'll tell you why), but the salesman can get you financed, you have to wonder what extra cost you're paying.
It's also becoming more common now to find longer-term loans. That reduces the amount of the monthly payments, which looks great on paper, but it increases the number of those payments you're going to have to make. When they shove the paperwork under your nose, multiply the number of payments by the amount of each payment, then add in your down payment to get the total cost of the car. Don't be surprised if that $1000.00 car is going to cost you $1600.00, and you haven't put gas in it yet or paid for insurance.
If you have a secure job right now, you will be way better off in the long run if every month you stash your paycheck in the bank and save it toward a car. The excitement of buying and driving a car wears off real fast, especially when it comes time for that monthly payment, ... Again!
On the other hand, if you like your job, you will probably get a few raises along the way, but your car payments won't increase. Credit unions allow you to pay extra each month which lowers the total interest you will pay. You have to watch banks. This might not apply to car loans but with home loans, if you pay extra at a bank, you have to specify that it be applied to your loan balance right now, otherwise they can hold it in escrow, (storage), and apply it when there is enough saved up to pay the loan off. That doesn't benefit you at all.
With a credit union, if your payment is $500.00 and $50.00 of that is principal, you can make a second payment on the same day by paying only another $50.00. If you do that every month, you cut in half the total number of monthly payments you have to make.
Didn't mean to get into all of that, but these are things that came up every year in my classes. I taught Automotive at a community college, and my students were in your age range. Too many of them had to do rent, diapers, food, text books, tuition, electric bill, and car payments, and they couldn't do them all with their part-time paycheck. The kids who waited a few years for all of these things always had the best cars and clothes later and seemed to have much fewer worries. Very often someone would show up with their new "ride" and brag about the deal they got thanks to our class discussions. No one in high school ever teaches personal finances.
So, to get back on topic, be sure to get an independent inspection that you have to pay for. Some shops will pick a car apart mercilessly because it's being sold by a competitor so you might get better results from a shop that isn't affiliated with car sales. If the selling dealer doesn't have their own service department, they have to farm the inspections and repairs out to another company. Try to find out which company that is so you don't go back there. Even if they find a problem, they might not want to admit that they overlooked it the first time, or if they did find it and the dealer elected not to spend the money to fix it, the inspector might keep his mouth shut to avoid "tattling" so to speak. Anything that is found should be listed in writing on a checklist or on the invoice when you pay the bill. You can use those items too to negotiate the sales price with the dealer. They always have a little "wiggle" room built in. It sounds like they're having trouble selling this car so if you're really "emotionally-involved" with it after seeing it, don't be afraid to offer less than they're asking.
Tuesday, May 3rd, 2011 AT 9:56 PM