Our Xterra got vandalized this weekend and the est. damage total is $7,200 which will "total" the car. A rock was thrown through a window and the perps. decided to have fun with the interior by pouring motor oil over all of the interior.

Anyways, our cars value is just about 10 grand. We will now be looking at purchasing a Murano or Armada for about 20 grand. Should I put 10 grand down and finance only 10 thousand? THis would make our payments very close to the 200/ month mark. Or should I put 5 thousand down and use the other 5 for payments and such? Any advice would be appreciated!

 

I'm a firm believer in not going into debt, even on a car purchase, unless there is no other practical option. In other words, if you have enough cash in the bank that you can afford the full 20K and still have enough reserves left over for an emergency cushion for you or your family if you need it, then pay off your new car in cash and don't go into even more debt by having to pay interest as well. You also, of course, won't have to worry about monthly payments, and your new car can't be repossessed if you lose your job, because you own it.

If paying the full amount in cash is out of the question or not an option, then my general advice is to put down as much as you can reasonably afford and then finance the rest. Usually, depending on your credit rating, you will get your best interest rates either at a credit union or with special auto-manufacturer-financing such as the 1.9%, 2.9%, etc.... deals you sometimes see in factory incentives. Those factory incentives, however, usually apply to new cars only, not used ones (they are designed to move cars off dealer lots by a certain date), and, in general, banks and credit unions charge slightly more interest on used cars, because it is considered more of a loan risk for them.

There is one exception to my general advice to always paying cash if possible. IF you can get a low enough interest rate on the loan that you could take the money you WOULD have spent in cash and invest it (say, in tax-free bonds) so that it will actually earn more in interest than the loan itself costs, then that is an option......your invested money then can actually pay off the car loan for you. But, that can be tricky, and you have to be very careful doing that. I wouldn't recommend it unless you KNOW that it will work.

 

Thanks man! After looking at Muranos today, it looks like we will be financing about 10-12 grand which is reasonable!

 

I would also always suggest financing as little as possible because you will usually loose out (unless you are making more money with the same money you would use to pay for the car)

 

Adding to what mmarshall has said, all being great advise, just watch out for the dealer tricks, be careful you don't put 10k down only to get a payoff and interest rate equal to 20k more, making the original 20k Armada suddenly 30k.

Be able to walk away, their are plenty of deals waiting to happen.

Don't mention anything about 10k down, if anything tell them you only have 500 for the initial drive off fees, see what the loan term is, see what the interest rate is, make sure you have everything figured out, dealers love to play with numbers.

Then when all is said and done, tell them you have found 10k to put down, or keep the money and just call the bank and tell them you want to pay 10k towards the principal.

Depending on mileage, I would play hardball and insist they throw in a extended warranty, covering everything bumper to bumper, even belts and hose replacement, also get a maintenance plan and tire/wheel insurance package, now your covered and they cannot surprise you in the finance office

Happy Shopping

 

Very nice, Murano's have a factory backed CVT warranty of 10 years 120k, on all of them from 2003-10

 

It really depends on your financial situation.

Debt in itself is not good or bad. Investors purchase things via a loan (granted it has to be a real good low interest rate) and keep their cash invested when the odds of making more over the interest rate they pay for the loan is better long term.

Do you have credit card debt that has an interest rate higher than your prospective car loan? If so then pay off your credit card debt first that way your total remaining debt will have a lower interest rate.

 

Here's my recent review of a 2009 Murano LE. You said you've already looked at one, but maybe you will also find this helpful: It will give you an idea of what to expect for your money.

https://www.clublexus.com/forums/car...murano-le.html

 

Thanks everyone for the help! We are currently negotiating on a 2006 Black on Black SL model with just about all the bells and whistles except DVD and Nav. It has 45k miles and the price is 22,300. I would like to get the price to 20,500 or 21 thousand. If not, then I'm for asking for extended warranty and some other goodies like Venom suggested

mmarshall- We love the 09 models, but they are about 10 thousand too much for us right now. What worries me is we just bought a house 2 months ago so our credit could be higher.

 

like others mentioned.. the more down payment the better.. i would put 10 grand down