QUOTE (markuswarren @ Jul 17 2010, 10:05 AM) index.php?act=findpost&pid=342481
Interesting thread. I too am in Canada and we're considering a Santa Fe (well, it's actually a forgone conclusion that we'll get one, just depends when
Forgive what will be a very stupid question no doubt, but what's the problem with basing a car purchase on the monthly payment? I ask as that is what we've been working on. If the vehicle costs X then per month payment will be Y, if Y is, for example, over CAD$480 a month then that might be beyond what we want to pay per month. As said, I'm probably missing something here and sorry for somewhat taking the thread OT.
As for what we are looking at, well, I'd love to say we'd go for the range topper, but I think mid-range AWD V6 is what we are more likely to go for.
A lot of the time, a salesman will focus on what you can afford per month, and back into a price and length of loan to make that "work". Meanwhile, you've not been paying attention to the price you're being charged, you've focused on what monthly payment you can afford. It's very easy to pay too much for a vehicle when you let them do this.
It's the same silly deal with trade-ins. They'll offer you what you think to be a very fair price for your old vehicle and make it up (and then some) in the price of the new one.
The appropriate strategy when purchasing a car is:
1) Ignore all discussion of monthly payments up-front. Focus on the price of the vehicle. WHEN you've established a decent price, THEN discuss loan terms with the finance guy, not the salesman. You should already know how much you plan to borrow and have a good idea of what the monthly cost with interest will be before you visit the dealer. You should, in fact, already have shopped for loans before you get to the dealer, preferably pre-qualifying for one. That puts you in a stronger bargaining position when it comes time to talk real payments.
2) Ignore all discussion of trade-ins up-front. Focus on the price of the vehicle. WHEN you've established a decent price, THEN discuss what they're willing to give you for your trade-in. If you like the number, fine. If you don't like the number, consider moving your old vehicle as a private sale. Yes, it's a bit of a hassle. You'll want to weigh the difference in money you'll get with the effort you'll expend. You should already know the wholesale and private value of your vehicle before you get to the dealer.
Next to a house, a vehicle is probably the most expensive thing most people will ever buy. Worse, unless you're dabbling in collector vehicles, it's assured to be a depreciating asset.
Can you imagine negotiating the purchase price of a HOUSE based upon the monthly payment? Never comes up during the discussion, does it? Before you start, you already know how much you can afford to borrow, and you're negotiating price, not monthly payment. The seller could care less about how you finance it and the terms of the loan, just so long as the deal gets done.