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Old 09-23-2004, 08:24 AM
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New car buying need help

I am in the process of buying a new car. I hate dealing with car dealerships. My current truck Iam about $6,000.00 upside down on. The sales manager at the dealership is telling me the best thing is for me to do a Smartbuy or balloon payment as its also called. Were after four year I can bring the new car back and walk away as long as its in good shape and with in the mileage. I get to walk away owing nothing. So were dose the negative equity go? Has anyone ever done one of these? Thanks for any help.




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Old 09-23-2004, 10:04 AM
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Find the vehicle you want, and look for it on the internet.
Ebay, autotrader, and local ISP classifieds.

Find out as much as you can on what MAY go wrong with that vehicle, if its model has a history of problems.

Take all of this information to a dealer in an area where they are priced lower than your immediate locality.

Let them know you have a payment ceiling and what it is (give them a moderately lower number than you can really afford, $300 rather than $375).

Let them know you have a payment term length and can extend it NO MORE (if you can afford 60 months, tell them 54 months).

Tell them (if they struggle with the above) you came there looking, and can leave looking as well.

It worked for me, I did the math while he was "haggling with his boss", and changed my mind on them twice.

I had someone ask the price of the Impala before I bought it so I knew where to start.

I told the salesman my "top dollar", it took two "sessions" with the boss to get there.

I then changed my mind on the term length he gave me, and asked about lowering it by 6 months.

I finally got what I wanted for MY price, and it took them 4 days to get it right.

I had to remind a few people that I could leave the deal and the car, and that another sucker would most likely pay what they were asking, as I walked out the door.

I like the 2000 Impala, and can afford to pay it off in half the time I took the loan out for.
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Old 09-23-2004, 10:08 AM
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That's the way to do it M&M!

Remember Maverick, YOU are the customer! Follow M&M's guielines and you should not have any problems!
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Old 09-23-2004, 11:14 AM
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Yeah that is good advice and actually we had a deal worked but I still didn't like it. So I told them it wouldn't work and I was done. Thats when the Director of sales got involved and started talking about the balloon payment to get me out of the negative equity. No one ever mentioned it till I told them I was walking out. I guess I just want to hear from someone else that the Balloon/smartbuy is the best way to get me out of the negative equity. Thanks for your advise!
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Old 09-23-2004, 11:41 AM
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I use a bit different tactic.

First, I sell my vehicle outright when I can. I WILL NOT sell it until its paid for. If you can't afford the one you have, how will you afford that and the new one? Thats what you are doing. Wrapping up the old in-equity with the new in-equity. Hang on till its paid off. Then you are closer to "getting on top". The only time I trade in , is if the car is under 60,000 miles, so it doesn't get wholesaled. You can save an amount equal to the taxrate, if you can get the same trade value as open market. High end cars typically don't sell well in private sector.

Second,
It sounds cold, but if you can't pay it off in 36-48 months, it costs too much. This length of time will vary depending on warranty. And the milage /year you drive. Whats the sense of having a "new car payment" with repair bills? Nope. Not for me.

Third.
Dealers: Research the car, going rate prices, etc. KNOW the facts. Go into the dealership ALONE, look for the Newbie salesman. The sales mgr will be trying to help him make quota. First sit down goes like this: "I will pay $xx,xxx. for that car. If the sales mgr balks, then tell him to save EVERYONES time, and come see me. I WILL NOT wait for more than 5 minutes. I will leave. (and look at your watch) I don't have time to jerk around, I will buy a car today. Here, or elsewhere." At this time , he's all flush, and runs to the S/M. 5 minutes goes by, and he comes back alone with a counter offer. You tell him " You didn't hear me correctly, I said if he want to haggle, get over here. " Then stand up. The salesman will have a kitten. The S/M will see you, and come over. YOU ARE DRIVING NOW ! You control the coversation from this point. He will mention his cost of the vehicle. You ask, if that includes incentives, hold-backs (a Biggie!), or other programs available. He will then know what he's dealing with. It helps to research incentive programs available BEFORE you go, to see if your getting stroked. You can also mention a program that he "forgets". These guys HAVE to move vehicles, so they need to negotiate EVERY deal. The longer they sit, the longer thay pay "floorplan" on them. You can also mention that about a vehicle you have seen sitting there for a month or so. Say"Gee, that Red Silverado has been sitting there for 2 months (if it had) The floor plan must be killing you!"

I've bought 12 new cars, and the WORST I did was 12% off the sticker. Best was 26%. My lastest venture was upgrading my 02 Tahoe for an 04 that was loaded up,even a DVD player, for $7,000.00 (Thanks in part to a GM rebate of $5,000) The old one had 61,000 miles. I'll take that.

For right now though, I'd get into positive equity before moving.
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Old 09-23-2004, 12:01 PM
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Yeah thats is exactly the way to do and is what I should have done when i bought the current truck Iam up side down on. What happened was when I bought this truck my credit wasnt very good so I let them talk me into going thru Capital One to get financed at real high rate. Its not that I couldn't afford the payment just my credit wouldn't allow me to get financed. So now I have 80,000 miles and three more years to pay on it with 6-7,000.00 of negative equity. I have been much smarter this time. I just cant get out of the negative equity. And I dont really want to keep it for anther three years. I am even pre-approved thru the Credit Union at 3.78 percent but its only for the MSRP and not the negative equity. Just frustrating to be approved for a loan at that great rate and still not be able to buy a car.


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