Natasha24 Posted June 6, 2012 Share Posted June 6, 2012 I know this is a very vague question with tons of possible answers, I'm just looking for some help.. I need to buy a car. I don't have any money saved up, which means I need to get a bank loan. Can anyone give me any information? I'm painfully uninformed and I feel so stupid about all of this. None of my friends can help me (they all still live off their parents) and my family is unwilling to help me. - How do I go about getting a bank loan? Should I get a line of credit or a personal loan? I don't even know the difference. - I have next to no money in my bank account, but luckily no debt on my credit card. I work, but I make very little money. Will this affect my chances of getting a loan? - Where do I buy a car? Do I get new or used? How will I know if I'm getting suckered/scammed into buying something worth less than what I'm paying? - Do I pay for it up front? What happens after I buy it - do I have to register it with my city/province and pay for it? - I know there are things like "e tests" in Ontario that my car has to pass. What other little things do I have to worry about? I appreciate any help. (Please be gentle, I know I'm very young and stupid about all of this. And please no flak for not having any money saved up. Long story short: My fiance dumped me and left me with several of his financial burdens) Link to comment Share on other sites More sharing options...
EQIQ Posted June 6, 2012 Share Posted June 6, 2012 Agency or a private deal? There are many dealers out there, just watch out to not get scammed. If you have a friend that is a mechanic take him/her with you to examine the car. A new popular car that sells for around 20,000, could be financed for around 300$/month. But take into account insurance as well. It can get costly. The plus side is warranty + new car smell An used car, you never really really know what you are getting. You can take precautions... but... And no warranties. They need to pass the emissions test. You would need to do the licensing for the car, get insurance for it as well. I bought an old car along with my father 2 years ago, spent 1200 on it (old car, payed cash with my money, got a better deal paying cash upfront), plus licensing and some repair to pass the safety test, it came up to a bit over $1500, it was a Hyundai Accent 2000 with a small dent on front bumper. So there are cheap options out there that work. Won't look amazing, and you need to be careful to not buy a money pit... Link to comment Share on other sites More sharing options...
Seraphim Posted June 6, 2012 Share Posted June 6, 2012 Most car dealerships arrange financing. If you do not have money down or bad credit you can expect to pay through the nose in interest rates. You also have to arrange car insurance and plates ect. Link to comment Share on other sites More sharing options...
RedDress Posted June 6, 2012 Share Posted June 6, 2012 I'm in Ontario! I think the first thing you have to figure out is whether you are going to buy new or used because the process is different for each. For example: - If you are going to buy new, you will likely want to do financing with the car dealership because the rates are waaaaaay better than what a bank can give you (in most cases). It's not unheard of to get 0.9% financing, for example. - If you buy new, you don't have to do emissions testing for a few years - If you buy through a dealership, they will often take care of registration, etc. You need insurance, though. Honestly? To find out what you can get - I would go to a dealership (just don't buy yet). Most dealerships sell both new and used. Beware, though! They will push the used because they make more money off used cars. Start with investigating the cost of a new car and see if you can afford that. They will be MORE than happy to figure that out with you. If you can't afford new, they will start getting you to look at used - and they can tell you (roughly) how much you can afford. But again... don't buy! Just go on a fact-finding mission. If you are going to go the used route, you can ask their rate of financing and then go to a bank and find out what they can do for you. Make an appointment with a financial advisor. It's free and they will give you great financial advice. Finally - for the new vs. used debate... I mean... that's a whole discussion. There are pros and cons to both. A new car is under warranty, presumably you have less hassle, less maintenance, no e-tests, etc. but they are expensive and you lose a lot of it's value the second you drive the car off the lot. For a used car, it's more of a gamble in that you could be buying someone else's problems... but... it is also less expensive, retains it's value more and really? I've had good experiences. It's often the cheaper option (but not always with the financing rates these days)! I'll start with that. LOL! Lots more to add... Link to comment Share on other sites More sharing options...
Natasha24 Posted June 6, 2012 Author Share Posted June 6, 2012 Does anyone have a rough idea of how much insurance will cost? I'm a 24 year old female. I just make so little money, I don't know how I'm going to afford car payments and insurance. Link to comment Share on other sites More sharing options...
DN Posted June 6, 2012 Share Posted June 6, 2012 Try one of these online quotes to get a rough idea: link removed Link to comment Share on other sites More sharing options...
EQIQ Posted June 6, 2012 Share Posted June 6, 2012 Depends on the car and your driving experience. You can easily get a quote by googling and calling an insurance company. Also most banks deal with insurance as well. Some even have an online way to get a quote based on the information you provide. For a general idea... Younger than 25 tends to be more expensive. You are a female, less expensive (they are assumed to be less aggressive drivers), assuming you have a G license, and got it at 18 yrs of age, and a clean driving record. For a $5000 non-sports car.. I would guess around 200/ month. I stand to be corrected though. Link to comment Share on other sites More sharing options...
EgoJoe Posted June 6, 2012 Share Posted June 6, 2012 Hello, OP. I happen to be a Sales Associate at a larger dealer in my state and I'll be more than happy to guide you through this. First off, Do you have 500-2000$ down? Do you have six months job history? On a scale of 1 to 10 how is your credit, 1 being bad, 5 being none, 10 being great? Do you have a long commute? Do you go places where traction might be an issue? Will you be doing primarily city driving or highway? Link to comment Share on other sites More sharing options...
Natasha24 Posted June 6, 2012 Author Share Posted June 6, 2012 I only have my G2, and I haven't had it very long at all. I have a clean record. Most quotes are saying like $400-500 per month. I don't think I can afford that. Link to comment Share on other sites More sharing options...
EgoJoe Posted June 6, 2012 Share Posted June 6, 2012 How old are you and is G2 a complete license? Link to comment Share on other sites More sharing options...
Natasha24 Posted June 6, 2012 Author Share Posted June 6, 2012 Thanks, EgoJoe! Do you have 500-2000$ down? Yes Do you have six months job history? I don't really understand this. Do you mean have I been working for 6 months? Yes. On a scale of 1 to 10 how is your credit, 1 being bad, 5 being none, 10 being great? 10, I think? I have a credit card, but I rarely use it. When I do use it (usually no more than $50 at a time), I pay it off by the next day. Do you have a long commute? No, 20 minutes each way. Do you go places where traction might be an issue? No Will you be doing primarily city driving or highway? City I'm 24 and G2 isn't a complete licence. I can drive on my own, but G is the "full" licence that I won't get for another year. Link to comment Share on other sites More sharing options...
DN Posted June 6, 2012 Share Posted June 6, 2012 Do you go places where traction might be an issue? NoAre you sure? You say you live in Ontario? Winters have been less harsh recently but we still get snowstorms. I doubt that will be an issue though because insurers will already have factored that in. Link to comment Share on other sites More sharing options...
EgoJoe Posted June 6, 2012 Share Posted June 6, 2012 So you have a probationary license, no biggy. First off, insurance rates per month are significantly higher than if you buy the policy yourself. When I have younger customers without insurance, I have an agent help them out. This agency operates like this: They buy the entire six month policy, attach a fee to it and still sell it to you per month cheaper than it would be if you bought it month to month. I mention this because you always need to shop around extensively for your first insurance. Secondly, provided you make $2000 or so a month after taxes, you can afford a car payment and insurance IF you shop around. Do you have any questions before I give you a good way to move forward? Link to comment Share on other sites More sharing options...
Natasha24 Posted June 6, 2012 Author Share Posted June 6, 2012 I didn't think of snowstorms when I said traction wasn't an issue - you're right, DN. I just meant I won't be driving on dirt roads or anything. I don't make $2000 a month, it's about $1500. Link to comment Share on other sites More sharing options...
blueidealist24 Posted June 6, 2012 Share Posted June 6, 2012 I don't know much, but I know my interest rate went down after I turned 25. How fast do you need the car? I'd recommend waiting until after you get a G if you don't need it IMMEDIATELY. Link to comment Share on other sites More sharing options...
EgoJoe Posted June 6, 2012 Share Posted June 6, 2012 Is that 1500 after taxes? How much is your rent? How much is your phone bill? How do you commute now and what does it cost you? Link to comment Share on other sites More sharing options...
Seraphim Posted June 6, 2012 Share Posted June 6, 2012 If you live in the GTA you can expect to pay pretty high rates. We paid $300 a month for 2 cars. That is being married, over 40 and no accidents or tickets or insurance claims. You can probably expect to pay about $150 a month for car insurance at the least. Link to comment Share on other sites More sharing options...
RedDress Posted June 6, 2012 Share Posted June 6, 2012 I only have my G2, and I haven't had it very long at all. I have a clean record. Most quotes are saying like $400-500 per month. I don't think I can afford that. Yeah - that's about right. When I first moved here from another province, I had my full G license but an accident and a minor ticket on my record. I was over 25 with more experience than you - and I was paying $360/month. As a G2 driver (if you can get insurance), you will be considered a "high risk" driver. I think $400/month is probably a reasonable assumption with your profile. Can you go under a parent's plan? If so, it will be a TON cheaper. Link to comment Share on other sites More sharing options...
Seraphim Posted June 6, 2012 Share Posted June 6, 2012 Yeah - that's about right. When I first moved here from another province, I had my full G license but an accident and a minor ticket on my record. I was over 25 with more experience than you - and I was paying $360/month. As a G2 driver (if you can get insurance), you will be considered a "high risk" driver. I think $400/month is probably a reasonable assumption with your profile. Can you go under a parent's plan? If so, it will be a TON cheaper. Yeah, unfortunately we pay the second highest rates in the country. I agree, $150 at the lowest and about $400 a month at the highest. It is costly to run a car. This is our break down. $400 a month car payment. $220 car insurance, $145 to plate both cars a year, $40 for drive clean emissions test. Also do not forget to include gas and maintenance. For both our cars in the past 2 months we have paid $800 in maintenance. I figure to run two cars for a year is about $15,000 and I drive nowhere and my husband works 1 km from our house. Oh yeah, and it is $75 for a new licence every 5years. Link to comment Share on other sites More sharing options...
RedDress Posted June 6, 2012 Share Posted June 6, 2012 Oh! I should add... if you are labeled a "high risk" driver (which, with a G2 you probably are since you have basically no experience)... you will likely need to go through an insurance broker. Me? I was not able to get insurance through the "standard" means (ie: through banks, major insurance companies, etc). They gave me the runaround because they didn't want my business... I had to go to a company that specializes in that (and really - my profile wasn't THAT bad... I was paying $110/month in Quebec, to compare) Ontario really IS terrible for that... but the good news is, it drops fast when "offensive" things come off your record. Once you hit 25 and get your G? It will drop by A LOT. A few years later, I am now paying 1/2 of what I was... Link to comment Share on other sites More sharing options...
Natasha24 Posted June 6, 2012 Author Share Posted June 6, 2012 Thanks for the replies everyone. As of right now, my expenses are pretty small (my landlord feels bad about my situation with my ex and has taken pity on me, thank god!) I know insurance rates drop when I turn 25, but I desperately need the car now. I wish I could go under my parent's plan but they won't support me financially. Link to comment Share on other sites More sharing options...
EgoJoe Posted June 6, 2012 Share Posted June 6, 2012 Thanks for the replies everyone. As of right now, my expenses are pretty small (my landlord feels bad about my situation with my ex and has taken pity on me, thank god!) I know insurance rates drop when I turn 25, but I desperately need the car now. I wish I could go under my parent's plan but they won't support me financially. Here is what I would suggest for insurance. Ask your parents if they will put you under their plan for the year and tell them you will pay the first two months up front and then pay monthly as if it was current so that they know there is leeway. Simultaneously, two months under their plan may still be less than half of what you would pay on your own. However. The reason I asked questions the way I did is this: You are going out of order. The first thing you do is find a car. The second thing you do is shop insurance, then you balance your budget for car payment and insurance payment. If it nets black with leeway money (eating out, gas, groceries, emergency savings etc.) then you purchase the car. What I suggest Go to a brand new Ford, Honda, Kia or Toyota store and ask to see their low mileage certified pre-owns. If they do not have certified pre-owns then ask to see vehicles that have the possibility for a low cost extended warranty. Then, go look for a Front Wheel Drive car with less than 100k miles and ask to see the Car Facts, Autocheck information etc. Find a car you like and do what the Sales Rep says until he does a write up and then say this, "I'm not going to pay that much." Then get up and get ready to walk out. He will give you a better offer. Keep doing this until he stops going back to his Manager and when he starts to spin the positive, or says there is nothing left. He is not lying when this happens. It won't happen immediately so don't give up easy. At the end of the day we'll always take a smaller profit, SO LONG AS IT IS A PROFIT. Now, when you're looking at used cars, make sure to look for a sale sticker and a tag sticker. Take note of the price disparity and ask the Sales Rep, "How long have you had this car?" Ask questions of the rep like this, "Would you drive this car?" If he says, "Oh yeah it's such and such whatever blah blah." Find another Rep. Even if it is at the same dealership If he says, "It's not about what I want, it's about what you want, but, I do like this car and here is why." That is a good Rep and just ask him ANYTHING you want to know. He is prepared for it. Ok, now, for the kicker. Even when the deal gets to it's sweetest. That is when you spring this on him AND NOT UNTIL THEN, "I need to shop for insurance and I need help." No matter what you say and do even if he gets the best rate on insurance you DO NOT BUY THE CAR THAT DAY. You may even get a better deal after you walk away. BUT, you are walking away the final time to talk to your parents so that you can compare rates, quotes etc. and show them that you can save money and budget easier if they help you help yourself. Not only that, they will be proud of you for working the dealer, getting the best price on a good car and using good judgment. FYI I suggest going to a larger dealership because they won't sell you crap like a little pot-lot will. They want your business now, in three to five years and they want your friend's business too so their reputation and livelyhood is on the line for what usually really only amounts to $1000-$5000 profit. Any questions? Link to comment Share on other sites More sharing options...
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