FWIW, I set out to buy a used car (50-60K miles) 18 months ago. Between the low inventory of used cars coupled with the the higher finance rates, I ended up with a new car for the same monthly payments. Weird, but true. Don’t know if the situation has changed since, but it is worth looking into. USAA will probably give better finance rates than any dealer.
Interest rates for a new automobile are sometimes 0%. It’s time to find out how well you’ve raised him/her. ;)
USAA has car insurance also so he could call the insurance company and get some advice on the cost of insurance. I got a car in Kentucky in 1069 when I was in the service and the insurance for 6 months was enough to buy a car. Consumer reports has lots of information on maintenance costs of different brands.
If you’re buying used, do NOT buy a Chrysler product. And whatever you’re looking at, do your homework. There is plenty of info to be found on just about any car here on the interwebs.
Debt in general makes one a wage slave to the bank in addition to being a tax slave working for the gov't.
Have him look at the price of the car new, versus the Blue Book value of the car slightly used in excellent condition. That’s the cost of driving a new car off the lot.
Cash for Clunkers ruined the used car market. I looked & looked & looked for used. CarMax, Autotrader, Craigslist, you name it. And for daughter driving back and forth to college 250 miles each way . . . while yes even a new car can break down.
I’d say go for something ZERO or very near zero, 0.9% financing. If his credit can get those rates. Go new. Go basic model. Upgrades are expensive.
Otherwise in today’s market you can’t touch much of anything for 10K with less than 100,000 miles on it.
We bought daughter a Honda CR-V last August, about 21K, 0.9%.
Almost got an Escape . . . but in the end got the CR-V. Either one by time up go up a level or two you wind up with a 30K car . . . basic is good enough . . .JMO
And for us, NO GM or Chrysler products. And living in the Southeast, this is our first non-Ford product, but with all the production going on in TN, SC, AL & GA . . . I don’t feel guilty at all. :)
Neither did I.
I don't remember who said this (could've been Twain or Will Rogers) but some wise person said, "the older I get, the smarter my parents were."
So you got that going for you.
That said, ask him what he would do if he had an extra 10,000 dollars in his pocket.
Then show him how financing a car is like throwing away 10,000 dollars over the life of the loan.
Show him that even though the list price on the car is X (say 20,000 dollars), by the time he's done paying for it, he will have spent Y (30,000 dollars at least).
A 10,000 dollar difference. At least. Obviously it depends on the "price" of the car.
p.s. on insurance . . . my 19 yr old daughter, now 20 since then . . . was on a 2001 Ford Escape with 195,000 miles on it for driving when she was in high school and sat here her first year at college . . . lived on campus and transit and foot . .. was about 45.00 a month . . . fast forward to last August and a brand new Honda CR-V with a loan 0.9%, and insurance with full coverage only 55.00 per month. I was pleasantly surprised!!!
If he is on base, there should be tons of decent used cars.
When I was in the service, we frequently had to deal with young enlisted not being able to pay their bill.
Invariably it was new car payments, child support payments or both.
His car will get beat up, tell him to buy a car that is already ugly, that way he doesn’t have to get mad when his buddy pukes in the back seat or he walks out and sees a new crease in the door.
Also warn him of the town honeys, they know that the military will ensure they get every dollar of child support awarded. Frequently they will have a whole brood with a different enlisted man as the father of each.
One word, used or new: Toyota
You’ll never regret it.
If he does buy new, make sure that he really reads the terms of the loan and understands them before signing it. I had a friend who bought his first new car and didn’t bother with that. After a few years, when he lost his job and couldn’t make the payments, he found out that he could not sell the car to pay off the loan, because they had applied all his payments to the interest, so he still owed 100% of the principal. His only choice was to let them repossess the car as a total loss.
Explain why and then let it go.
The lessons one learns well are from personal experience. After you've shared your experiences and your advice, you are done.
God didn't rest on the 7th day because he was tired. God rested because he was done.
First, he’s an enlisted MAN.
The military doesn’t take kindly to the “my car broke down” excuse, so a $1000 beater isn’t a good idea unless he lives on base.
The used car market right now is such that a car that’s a couple years old costs almost the same as a new one. I just bought a new car and was amazed at how a 2 year old Camry sells for the same as a new one. And they wanted more for low mileage 2 year old F-150’s than Ford is selling them new! (Are the auto manufacturers manipulating the used car market to steer people towards buying new?? Perhaps.)
If he gets a 3-5 year old car with low miles, it will still cost quite a bit and require a loan and then he owes money on a car with high mileage and that could mean payments PLUS repairs. If he has the $10k to pay cash, then that would make a good down payment on new or slightly used.
If he doesn’t fall into the “trade every two years” trap, then starting out with a quality new car or truck while he has a good dependable paycheck (a rare thing in today’s economy) and keeping it until its paid for is not a bad idea.
It has been totally reliable, it is easy to work on, and parts are dirt cheap.
It really depends on what he is buying. I have bought and sold lots of autos, all used. I have never bought new but over the past 3 years have found that many Honda and Suburu cars with 30K or less have retained almost all of their value. A 2012 Civic LX goes for about $13,500 (wholesale) and about $16,500 (new with rebates from a good deal). There is a trick to buying used vehicles that will save you between $1,000 and $3,500 dollars pretty easily if you are comfortable negotiating and have some time and patience. You should not expect to get the wholesale price (per black book auction rates for your area) as the dealer has to make some money too. But you can get close if you know where to negotiate from.
Ask him if he would like to pay $250 a month for a 3 year old car with 50k miles on it. Then tell him that is what he will be doing I 3 years if he gets a 5 year loan.
Bought a 2008 equinox for a daughter away at school. We bought the extended warranty—something I do for my business truck, but not for my cars. She has more than paid for that with a couple of dealers.
Depending on how good he is with repairs and if he has that much of a down payment, buying new is going to be better. We looked for both of our girls—and the best we could do for either of them was recently used, 50,000 miles, and about $18k.
Out there now, there are $20k decent used, and $2000 beaters. Nothing in between.
People are not buying new cars these days because they want to. They buy them because they have to.