Financing new vehicle

[drz]

I am thinking of getting a new -- to me, i.e., used -- car. Maybe e36 or e39. I am trying to figure out how much car I can afford. I would like to go with a 60 month loan. That would make a 2001 vehicle 10 years old by the time I get it paid off. What are your thoughts on this situation. Those of you who financed used vehicles, please tell me a little bit about your particular case.

By the way, my current car has 185,600 miles on it and will need some money dump in for maintenance and looks very soon if I decide to keep it.

[c1apton]

"Doc", a 60 month loan on a used ride is going to be slim from a bank or a credit union. Most will do 48 if "feasible" in their eyes. The few places that will go 60 mos will be high % rates. I'ld talk to your bank (as long as you're in good standing w/them) and get their thoughts.
You might find it a better investment to do the maintenance on your car now and accumulate $$ a bigger down payment on your next ride

[Dudesky]

Yup. But 48 is a bit high IMO, I'd say the average maximum a lender would allow would be a 36-42mo loan on a 5yr old car. Going 5yrs on a used car loan is a bad situation, if you can even get it. I would strongly advise you against that. Too many things can go wrong, and you'd be paying a ton of interest. Do whatever is necessary to keep your current car running, and save for a bigger down payment. Or borrow money from family interest free to put down. You may be paying back both family and the bank, but your end cost and interest will be reduced dramatically.

Take an '01 540i with 66k in excellent condition for example. Private party value is about $25,000. Dealer pricing will be about $29k. So you put down $3k and get a 60mo loan for the balance. At 7% APR, that's a monthly payment of about $530, for a total of $32k on a $26K loan . . that is, if you can get 7% on a used car- most people won't. After 5yrs, you paid $10,000 more than what the car was originally worth, and when you add insurance, the monthly expenses for the car will already be equivalent to a decent mortgage in most states

One big mistake people often make is accurately assessing their current vehicle. They get all excited about the prospect of something new, something different, that they don't see it may not take too much to restore or repair their current ride. Next thing you know they're locked in to a huge loan they can't deal with or don't want. Monthly payments suck, and 60 of them will drive you nuts. Plus, paying full coverage insurance on an older car gets to be a waste at some point, but it will be required for the full term of the loan. Considering this, a 2-3yr lease on a new or certified pre-owned car might be more attractive, and may even be easier to attain. Or fix the current ride and save $$$ for the win

[EnvyM3]

I agree with you Dudesky but my emotions played more of a deciding factor than the actual money.
I got my previous 323 (the one in my sig) for $20,000 about 20 months ago. I put $1K down and financed $19K for 60 months. My payments were $395/mo. Now when I went to get my 330 last week, I got $12K for trade when I still owed $13.4, which average would have been 14K for trade. The reason why I got less is b/c I paid a lot less for the 330 than the retail. Plus the 323 had 26K miles on it when I bought it and I just got rid of it w/ 70K miles on it. Retail on the 330 was about $24,500 and I paid $20,000. So I got less for my 323 but I paid less for my 330 so it was kind of a wash.
So I was upside down on my 323 by 1400 so I paid that off cash and financed the $20,000 for 60 months at an 8% APR.
The end result is that my payments went up to $418/mo so I am paying $23 more a month for a 330 that is a year newer, it has less miles (50K) and a CPO warranty up to 100K or September of 07 (whichever comes first). I guess I couldn't say no for $23 for the extra power and ext. warranty. I know I'll probably end up paying close to 4-5K in interest over the loan term, but I got hte car for a few grand less so whatever. The way I see it, you only live once so live today to the fullest and enjoy what you can while you can.

[Storamin]

If you're paying upwards of 395$/month for a 2000 323i... why didn't you just lease a new one? 400$/month will get you a pretty nice new 3 series. Especially with the fact you traded it in in 20 months.

[drz]

Thanks for the replies so far guys. I am still undecided. I also thought about getting something closer to $15000 nad paying it off (mostly) in a year. My big deal here is that I am wantintg to buy a house. I haven't spoken to lenders yet, so I don't even know if I will be able to afford a mortgage that can buy something in which I would like to live. When I do go out and see lenders (which may not be for a year), I don't ant to have high payments on a car that would reduce my chances of getting a bigger loan. If I get a car this year and pay it off in 12 to 15 months, then I will have the car's title before it gets too old, and I won't have that monthly payment to deal with once I start paying a mortgage. This would, however, affect my cashflow.

I have been thinking that it would be more expensive to maintain my e36 than it would be to just get something newer. What are your thoughts on this?

[94bmw325i]

What exactly is wrong with your car? If it's everything in your mods list, plus your thread on the rock chips on the hood, I think it would be a lot cheaper to repair your car.

[drz]

The car runs well. Not much is wrong with it. I may not [b]need[/] all of this, but if I decide to put money into it, I will do it the right way (I am including very very rough estimates off the top of my head so that you tell me if I am wrong. I am not including any labor costs in this. Please tell me if something is not DIY and how much it could cost):

- New front brakes - pads and rotors (OEM) -- $150
- SS brake lines -- $125
- Power steering hoses -- $150
- Replace heater valve (already have valve)
- replace aux. fan (already have fan)
- New water pump -- $60, with new hoses -- $50
- maybe spark plugs -- $35 [how do I know if I need new coils?, they are like $70 each]
- New shocks and springs -- bilstein touring shocks $200, springs $250
- shifter bushings -- $85

- My sunroof does not work, but that is not prioritary
- I could also get new tails, manily because the current ones (OEM) are so worn that I am getting the "Brake light failure" message on my OBC
- I will put money into getting a climate control unit with a good display. I will try the final stage capacitor fix, but I doubt that will do it.

I would then add the following:

- 17" wheels for sure (I have the stock bottlecaps) -- plan on getting used for about $700

- underdrive pulleys -- $300
- CAI -- $250
- m50 intake manifold (maybe) -- $180
- firmware remapping -- $300
- maybe exhaust (doubt it, though)

The stuff that is for sure adds up to about $1800, not counting labor and or any tools I will need to purchase. Would be another $1000 or so for the performance stuff listed at the end (still without an exhaust). To that I must add the paintwork.

I guess it could be doable, unless my estimates are too optimistic.

All opinions welcome.

FYI: the car cost me $6,000.

[EnvyM3]

Originally Posted by Storamin

If you're paying upwards of 395$/month for a 2000 323i... why didn't you just lease a new one? 400$/month will get you a pretty nice new 3 series. Especially with the fact you traded it in in 20 months.

I couldnt lease a car b/c I work in sales and I put on about 25-30K miles per year. I had the 323 for 20 months and I had 26K on it when I bought it and sold it with 71K on it. Otherwise I would definitely lease a new one. But I will always love the e46 model

[94bmw325i]

wow power steering hoses are $150 that sucks, my power steering is leaking a tiny bit I think, hope I don't need to replace them.

[drz]

^^They're maybe a little bit cheaper than that, but I know one of the two I need to replace costs about $90.

How do my other estimates look.

Is suspension work DIY?

What about SS brake lines?

[Storamin]

unless your current brake lines are failing, i wouldn't bother getting SS lines. just another 100$ you can spend elsewhere. Suspension work is definitely DIY. Probaly about time to change your tierods, control arms, and control arm bushings up front...

[drz]

Originally Posted by Storamin

...Probaly about time to change your tierods, control arms, and control arm bushings up front...

Yes, I fear this is true.

I am thinking of taking my car to a local mechanic andhave them check out the suspension and tell me what needs to be replaced. I want to get all that needs to be fixed, but I am not looking to spend if not necessary. I don't have much money saved up right now.

[Dudesky]

Storamin's right- with the mileage you have now, it's a good bet you'll need new control arms ($170/pr with ball joints preinstalled) tie rods ($30/pr) and bushings ($20/pr). But I wouldn't spend money on the SS brake lines either. Get yourself a torque wrench and a breaker bar if you don't already have them. These are ubiquitous to the DIY'er.

There's really nothing on your list that I either haven't done or haven't seen good DIY's for. I know for a fact that our members here at UB.c have had experience with about 90% of the items you mentioned. Your pricing is pretty much on target. And the good news is that you can do it all pretty much at your own pace as money becomes available. You may need one or two specialized tools, but once that list is taken care of, that car will run like new again

And you're absolutely right about the house- place it first before a new car. Also consider that you'll be needing extra cash for other incidental things pertaining to the house purchase . . . always good to have some reserves. Otherwise you might end up relying on c1apton's shipments for your meals

[drz]

I have pretty much decided to put money on my current car. If I am unable to get approved for a mortgage that will pay for something I like, then I may consider changing vehicles. However, you already got me all excited about restoring mine. I am really curious to see how long my m52 will go if I treat it well.

What I need is to get c1apton to get me a gig as a digital artist. I'll be able to buy my own Hamburger Helper then.

Thanks for the input everyone. Fell free to continue adding to this.