Give me your civic I'll give you my fit

 

This is good advice.

There are some exceptions tho. My case for a lower payment is tied to the fact that I am house shopping and having $200 less tied up in payments makes about $20,000 difference in my pre-approval for a house loan. This is more important at the moment than what I end up paying overall for a car.

Also, In my case, my terms are going to be extended, However, even extending out 12 mos, I will end up paying about $8,000 less for the Fit Sport by the time it is paid off, vs what I would pay for the Civic Si.

As far as the holding of value... well, as of now, and judging by used prices the Fit Sport seems to hold its value better than the Civic Si's. But who knows about the future...

 

This explains why the dealer and your friendly salesperson are so eager to work with you: they are taking you to the cleaners (or helping you take yourself to the cleaners). Your bank or credit union will likely give you a much better rate.

There's an old rule worth keeping in mind: never finance a car for a period longer than the warranty. That's three years for a Honda.

If the mortgage lender you're working with was referred by the car salesperson, run as fast as you can.

 

First off, I don't think rarely anyone is going to rag on their little econobox, apart from some ricers on this forum.

Second, you're crazy!! The FA5 is one car I'd really like to own, and I don't see why you can't just take it for spirited drives. I wouldn't expect too much fun from a drive from home to work.

 

Ahhh... A bit more info. (the house shopping).
My opinion has completely changed. Trade the Si unless you can outright sell it. (try that first) going upside Down on a trade-in is never a good idea in itself... except when it can save you elsewhere (which you above post blatantly states). By downsizing, you are going to have $20K more for an actual investment. (albeit a long term one).

Also, the fit will allow you to haul more stuff home from Home Depot

If it had just been car for car... I'd say Si. but Car for house??? The house always trumps the car.

~SB

 

I know I'm coming in a little late on this... But I just traded my 06 s2000 with 20k miles for an 09 Fit Sport. Now THAT was a hard decision.

I think you can pull it off

 

Damn you! *shakes fist*

 

Hmmm. I thought thats a good rate, especially for 72 mos. I understand that its not a 0% APR incentive or anything, but there aren't any current incentives on the Fit Sport right now... My local credit union has a 6.35% rate for a max of 66 mos.. (Southeasten Federal Credit Union).


Yeah, an S2000 would be hard to give up... A while back, I had a job that required me sell my 2004 Mazdaspeed Miata for a 4-Door. I was sad...

 

5.9% for 72 months is a bad rate? It's a challenge to get below 7% these days. A few years ago anyone with good credit would be a sucker to take more than 3% but those days are pretty much gone.

 

excellent point!

 

I am amazed you are only $2,000 in the hole. Most new cars depreciate at the least $5,000 the minute you drive them off the lot. Unless you put $5,000 down I really don't understand how your Civic held its value so well. I know it's a Honda, but because it's a Honda is why it should have dropped only $5,000 compared with American or Korean which drop about double that.

Based on your financial workup it doesn't seem like there is any danger in trading. I would normally never advise trading in such a new car because of the huge negative equity hit, but somehow you've managed to avoid that, so go for it if the Fit will make you happy. No sense making a monthly car payment on a car you don't like.

 

It's mainly due to trading with the same dealership that I bought it from, they are a little more willing to help. Plus, It's always better to go with a dealership that actually carries that brand (ie. Honda). If I was to go to, say, a Toyota dealership (that didnt have a sister Honda dealer), they would not give me NEARLY what Honda has offered for my trade. Thats because they are not familiar with the car and more likely to try to give the MINIMUM that someone would give for the car (ie. Auction Value to sell it to another dealership).

 

My Experience has been the opposite of yours. My Honda dealer wouldn't give me even close to what I wanted for my wife's Civic and My Acura Integra. So, we sat on the two cars for about 9 months. we went to a Nissan Dealer and they gave me $1k more for each of the cars than the Honda Dealer did... 1 year later.

Now... when we went to trade the Altima, we took it into the Honda dealer and sat down with them. I knew what they could put it on the lot for based upon it's condition and what they were putting other similar used cars on the lot for. I told them what I wanted for the difference and reminded them that the last time they didn't give me a fair value for a car, I bought a Nissan. Well, I walked out this time too and told them... call me if you change your mind. well, they called, and I got good value on our Nissan from the Honda dealer.

~SB

 

find a free one day financial planning course and take it. If you are worried about an extra 20k for preapproval then you need some assistance. Don't just live within your means. Stay away from the limits (ie dont ever buy what "you can afford"). Some people say the economy is the way it is because people financed what they couldn't afford. The problem is these people really thought they could afford these cars and houses because the creditors told them they could. My bank preapproved me for a $75k car loan. I laughed my ass off and told the lady the banks really haven't learned theirs lesson.

 

Hey, thanks for that. Congrats on your $75k car loan.

Look, im not an idiot and wouldnt take even a $30k car loan. Im still a new professional on a single income, paying student loans, and looking to buy my first house. So yes the difference between a $80k house and a $100k house IS a BIG difference.

I am admitting that I am currently paying for something (a car) that I am not using like it should be used and I am looking at trying to remedy that. So sorry for screwing up the economy.

And just for your information: I pay almost double the cost to rent in my town than what the mortgage would be on a $80k house, so I don't think that getting that extra $20k will put me over what I can afford. It just means that I can get approved for a house that is actually in a good location vs. ghetto.