A kata/form tip for beginning students

pdg

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You have a good point.
I buy new and drive it at less ten years. You get price breaks if you let them finance, because they get a kick back.
Then after a few payment you pay it off. In the U.S you do not pay penalties for paying off early. They get even by just dropping your credit score 10 or 20 points, but if your credit score is 850 it does not matter.

There's very few that penalise early settlement - a few definitely do, but not many.

Maybe it's still a different finance model here though...

I think the most popular is a standard hire purchase - you pay a deposit of sorts (anything from a few pounds under special offers up to 10% or more of the sticker price), then monthly payments for 2-5 years.

At the end of the agreement you have choices:

Hand the car back and walk away

Hand the car back and start again with a new one

Pay the final 'balloon payment' which is usually around 50% of the sticker price and keep the car


The first two options are subject to inspection of the car, and there are (substantial) penalties for things like damage, aftermarket parts, different make if tyres, etc. For instance, a lot of agreements are based on say 8,000 miles a year - anything over that is charged at 20p+ per mile. I know someone who had their car sat on the drive unused for nearly a year to save going over the mileage...


Then there's "personal contract plans", which is basically a fixed term lease. My sister does this for her car and is constantly paranoid (when she handed the last car back for exchange she got charged hundreds for a few stone chips in the paint).


I'll stick to using up the last vestiges of life in cheap cars tyvm :D
 

Bruce7

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There's very few that penalise early settlement - a few definitely do, but not many.

Maybe it's still a different finance model here though...

I think the most popular is a standard hire purchase - you pay a deposit of sorts (anything from a few pounds under special offers up to 10% or more of the sticker price), then monthly payments for 2-5 years.

At the end of the agreement you have choices:

Hand the car back and walk away

Hand the car back and start again with a new one

Pay the final 'balloon payment' which is usually around 50% of the sticker price and keep the car


The first two options are subject to inspection of the car, and there are (substantial) penalties for things like damage, aftermarket parts, different make if tyres, etc. For instance, a lot of agreements are based on say 8,000 miles a year - anything over that is charged at 20p+ per mile. I know someone who had their car sat on the drive unused for nearly a year to save going over the mileage...


Then there's "personal contract plans", which is basically a fixed term lease. My sister does this for her car and is constantly paranoid (when she handed the last car back for exchange she got charged hundreds for a few stone chips in the paint).


I'll stick to using up the last vestiges of life in cheap cars tyvm :D
In the U.S last car payment , the car is yours. I payoff early and to save the interest.
 

pdg

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In the U.S last car payment , the car is yours. I payoff early and to save the interest.

Is that standard practice or simply one option of many?


In any case, my preference is to make one single payment (preferably less than what two months standard finance would cost) and own the car there and then.

But then, I'm not bothered by in car toys (except stupid childish sound systems, which new cars don't have and I'd have to fit myself anyway), I know how to twirl spanners (up to and including rebuilding engines), I can weld (and own the kit), I can happily plug in my laptop and reprogram stuff...

The only thing that stands a chance of scuppering my usual plans is electric cars...
 

_Simon_

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Car kata? :) (the practical application of it.) Bringing it full circle :)

 

gpseymour

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Oh, they do exactly the same here. But I'd never buy a new car unless I was in a position to just open my wallet and pay cash - it just doesn't make any sort of sense to me.

I do like other people buying new cars though, don't get me wrong.

It means that in 5-10 years I can buy that exact car for 1/30 of the price (or less), do whatever I want to it without even considering stuff like resale or trade in penalties and if it comes to it, replace it every 6 weeks and still save money compared to finance payments.

The only possible advantage I can see to a new car is that less people will have farted in the seats...
Agreed. I've owned a couple of new cars, but I really like a good used car. My current car is an older Mercedes - a $50,000 car (in 2000) I was able to get in quite nice condition for $6,000, and have put almost 150,000 miles on already.
 

JR 137

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The car that I bought last time had 0% interest rate. The number that we played with was the monthly payment. In stead of saying, "I think my trade in car worth ...", I said, "I like to keep my monthly payment under ...".
Worst thing you can do. I know a few guys who sell cars, and they’ll tell you the same thing (if you’re friends and they’re not trying to sell you a car). My uncles (brothers) co-own a used car lot. They’re honest guys, and I’m not saying that because they’re my family. I know car salesmen’s tricks.

If you’re monthly payment driven, and there’s nothing wrong with that at all, here’s what you do: you figure out what your willing to pay per month and for how long. You add in interest and a down payment into it, and you get a total amount you’d spend on the car. There are online calculators you can play with for this.

You take that amount and start negotiating a price for a car. You know approximately what the monthly payment will be going into it. Now you’re in control. Somewhat.

You go in, find the car, and talk price of the car only. You tell them you’re financing through your own bank. If they ask the interest rate, you tell them a little less than the calculations you came up with. This is valuable later on; I’ll get to that.

You tell them you’re selling your car to a friend.

When they start their whole trade-in value, interest rate, down payment, monthly payment scheme (because that’s what it really is), you tell them they’re trying to do too many things at once, and right now you’re only interested in negotiating the price of the car. You tell them if they can secure a good deal, you’ll discuss that stuff afterwards.

Now you make an offer (not a monthly payment offer). They’ll tell you they need to talk to their boss, to which you reply “you mean that sheet in the back where it tells you the minimum is your boss? Sure, I’ll wait here while you look at that and keep me waiting, because you think the longer I wait, the more Im going to justify spending more.” And that one’s a known fact among them. Remember, it’s all a game.

They come back with a price after what seems like 15-20 minutes. They counter. You tell them about 90% of what you’re really willing to spend, and they’ll usually somehow get to right where you’re at. Provided you’re making a reasonable offer, of course.

After you lock down the price, remember, they agreed, then you start with the trade-in. Know what the average trade-in value is. Know the condition of your car. If they give you the average and your car’s above average, tell them you want more.

Once that’s settled, then see what the finance guy can do. If they give you a number that’s off, tell them what your calculations lead you to. They like to sneak in extras like an extended warranty. Tell them to take it off and give you the price you negotiated and stop with the nonsense or you’re leaving.

If they tell you they just put tires, brakes, etc. on it, tell them they had to because they can’t legally sell a car that doesn’t pass inspection. Also remind them they don’t pay retail for parts (tires included) nor labor. They get parts for approximately 60% less than retail if they’re a dealer, and 40% less if they’re independent. That $2k tire and brake job cost the dealer $600 tops when all was said and done. Add another $1k for a certified used because someone from the manufacturer comes for this and charges the dealer.

If you can, find out the average dealer’s price at auction for the used car. When all’s said and done, about $2500 more than they paid should be a great deal. They need to make money, and you need to save money. Depending on the car, that’s a decent markup they’ll be barely comfortable with.

New cars have little wiggle room on price. Dealers make their money on used cars and service, not on new cars, relatively speaking.

Don’t fall for doing 3 deals at once - your car, financing, and the car payment all in one. They’ll easily get what they want for the car and give you practically nothing for yours. They’ll just extend the length of the payments and/or do a “balloon payment” while letting you think you got a deal. They definitely won’t show it, but they’ll walk away a lot happier than you, trust me.
 

Kung Fu Wang

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stop with the nonsense or you’re leaving.
Agree with everything you have said. When I ask them the best deal that they are willing to give me, if I walk away and they don't stop me. I know they may have reached to their bottom line. If I return back 2 hours later, I know that I have a good deal.
 

JR 137

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Agree with everything you have said. When I ask them the best deal that they are willing to give me, if I walk away and they don't stop me. I know they may have reached to their bottom line. If I return back 2 hours later, I know that I have a good deal.
The thing about a used car is - there’s only the one you’re looking at. Sure they probably have other comparable ones, but the one you want may not be there later on. If you’re set on that car, it could get sold by the time you come back. It most likely won’t happen in 2 hours, but if you come back the next day, week, etc. it could be gone.

If you’re set on say, a used Toyota Camry. There’s only one on that lot with that mileage, condition, color, options, etc. If it’s a new Camry, you could just pic another one because they’ve probably got a lot full of them.

Speaking of Toyota, not every brand has the same wiggle room in price. Toyota is a notoriously low markup vehicle brand. Toyota dealers make money on volume, not indidual sales. Honda and Nissan are similar, but not as much so. My uncles refuse to sell Toyota because they never make enough to make it worth their time. They may have one on their lot, but that’s typically because they got it on a good trade-in deal. They also refuse to sell VW/Audi because they’ve had so many problems with them and they got tired of having to make good on a bad car and losing time and money in the after sale process.

VW and Audi are a pretty high markup used car, meaning they get them dirt cheap at auction compared to what they’re selling for on the lot.

Just about all used cars come from auction. The manufacturer’s financial companies sell former lease vehicles at auctions open only to licensed dealers. Buy a 2-3 old Volvo from a dealer, and it was sold at auction by Volvo financial, stuff like that. They take a risk with that though - they really have no way of knowing the history and true condition of the car. Most need minimal stuff (they all need something), few need some costly stuff that they may actually lose money on, but that’s the cost of doing business. They offset that risk with overall markup on everything.
 
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Bill Mattocks

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I seldom buy new cars. Bought one for my wife recently. Checked advertised prices, checked vehicle recommendations, went in and bought car. Did not haggle. Might have saved a few bucks. So what. I dislike spending hours playing games for a hundred bucks. We were in and out in under an hour. Donated old car to charity.

I bought my 2000 Jeep Cherokee new. Still have it. Bought my motorcycles and my 94 Toyota pickup off Craigslist.
 

CB Jones

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I seldom buy new cars. Bought one for my wife recently. Checked advertised prices, checked vehicle recommendations, went in and bought car. Did not haggle. Might have saved a few bucks. So what. I dislike spending hours playing games for a hundred bucks. We were in and out in under an hour. Donated old car to charity.

I bought my 2000 Jeep Cherokee new. Still have it. Bought my motorcycles and my 94 Toyota pickup off Craigslist.

Thats me...I hate hagling.

When I bought my wife her Durango....I told the salesman...I want that one, I want ya'll to add a towing package, unlimited mileage warranty, and this is the most I am willing to pay per month with nothing down. They came back 5 minutes later and said deal and we did the paperwork.
 

pdg

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Well, I have to thank all you people who buy new cars, and nearly new.

Without you taking the monumentally huge financial hit there wouldn't be cheap old cars for me.

I can't personally comprehend why a new (or recent) car is worth so much to anyone, but hey - whatever.

Cheers all :)
 
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Bill Mattocks

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Well, I have to thank all you people who buy new cars, and nearly new.

Without you taking the monumentally huge financial hit there wouldn't be cheap old cars for me.

I can't personally comprehend why a new (or recent) car is worth so much to anyone, but hey - whatever.

Cheers all :)

Personally, I tend to prefer used, after the big initial depreciation hit. I also like less automation and less covert data gathering by my vehicle to be packaged and sold by others.

However, I like my wife to have a newer, safer, car that has a warranty and is less likely to break down on her. I'll take the depreciation hit for that. Some things are more important than a financial equation.
 

Kung Fu Wang

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Personally, I tend to prefer used,
I used to think that way. One day I suddenly realize that I only live once and I deserve to have something new. It's sad that one day when I die, I have not even drove a new car yet.

I live in Texas and California. Every year I have to drive across the country and back. I need to have a car that I can trust. I bought my wife a 2018 Toyota RAV4 hybrid 4 wheels drive. This way I don't have to worry for the next 10 years.
 

pdg

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However, I like my wife to have a newer, safer, car that has a warranty and is less likely to break down on her.

There's no guarantee that a car being newer means it's safer - we have ratings available for car safety and some popular new models are shockingly bad.

A new car isn't necessarily less likely to break down than a well maintained older one - I used to drive a lot of brand new hire cars for work journeys and I've had more than a couple with under a hundred miles on the clock leave me stranded.

A warranty is all well and good if it A: covers what is likely to break and B: comes with a trustworthy workforce, which is far from a certainty.

Still, if it makes you feel better then I'm not arguing against your choice, only your reasons.
 

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I’ve only once bought from a dealer that wasn’t my uncles. Certified used 2006 Highlander. Bought it 1/1/09 with 34k miles. Certified used warranty was 10 years/100k miles, which is better than the new warranty. Sticker price was $28k new. I paid $17k. So $11k less and 34k miles, I’m happy. I’ve currently got 168k miles on it and no payment for the last 5 and a half years.

I’ve never bought new and never will. I can get so much more car for my money buying a 2-3 year old car vs new. For $17k, I wouldn’t have been able to buy much new. $17k got me a barely used car that was $28k. The last thing I wanted to do was haggle with the dealer. But saving $11k vs a new one was worth the aggravation.

Except...

I want a Tesla. I don’t think I’ll find a used one anytime soon. I’m thinking 2-3 years away. The newer smaller one, not the Model S. I think Model 3? I’ll have to drive about 2 hours to see and test drive one.
 

pdg

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I so appear to think of cars differently ;)

My current car is plenty comfy enough, it's in good condition (needed a hell of a clean), it's proven reliable enough that I'd get in it right now and drive any distance, it's got just enough toys to amuse me.

But, it's 12 years old...

Also but - it cost me £450 to buy outright, privately.

After a very quick look, the new equivalent model would need a £2750 deposit and £199 per month - and I'd still need to pay £11000 to keep it in 3 years time.

I just can't think of a single sane reason to get a new one.
 

Bruce7

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I so appear to think of cars differently ;)

My current car is plenty comfy enough, it's in good condition (needed a hell of a clean), it's proven reliable enough that I'd get in it right now and drive any distance, it's got just enough toys to amuse me.

But, it's 12 years old...

Also but - it cost me £450 to buy outright, privately.

After a very quick look, the new equivalent model would need a £2750 deposit and £199 per month - and I'd still need to pay £11000 to keep it in 3 years time.

I just can't think of a single sane reason to get a new one.

In America it is not uncommon to drive 100 miles( 160 km ) , 1 to 3 hours, a day just to get to work and back,
so the car has to be dependable and have extra's we like.

We basically live in our cars. It is not like England, mass transit not good in America. You drive miles just to get food, not like England where you can walk around the corner. That is why most people want to drive new.
 

pdg

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In America it is not uncommon to drive 100 miles( 160 km ) , 1 to 3 hours, a day just to get to work and back,
so the car has to be dependable and have extra's we like.

We basically live in our cars. It is not like England, mass transit not good in America. You drive miles just to get food, not like England where you can walk around the corner. That is why most people want to drive new.

I can't walk round the corner to buy food - it's over an hour walk to the closest supermarket.

When I was a taxi driver all those years ago, 500 mile days were normal (that's 3 runs to the airport, and airport/docks runs were what I did). The car I used for that I bought at about 6 years old with 50,000 miles on, it had 260,000+ on when I got rid of it - and I only got rid of it because I stopped taxi-ing and started using a motorbike exclusively for a while.

Also, I worked in London for a time, which was 95 miles each way, every day.

Now, with my current job - I'll do 10 miles, work, 5 miles, work, 10 miles, work, 8 miles, work - etc. 50-150 miles in a day is far from uncommon.

That sort of usage profile is far far harder on the vehicle mechanically than doing 100 miles in one hit.

I think I'm allergic to mass transport - I have a pathological hatred of buses, trains, etc. Even if I liked the bus, to get to town there is one every two hours each way from my closest stop (a mile walk), nothing before 8am or after 7pm, a reduced service on Wednesday and nothing at all on Sunday.


Just because England is a smaller land mass, it doesn't mean you can't make it big...

And, I haven't owned a car with less than 150,000 miles on the clock for many years. My current one is on 174,000.

And I still don't view a new car as any advantage - for me.

(Oh, and for reference - very very few people in the UK ever even think of km instead of miles. All our cars record in miles, our speed limits are mph, our road signs state miles - the only time metric measurements are used is stuff like the approach to a junction - it switched from yds to metres a few years back)
 

Bruce7

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I can't walk round the corner to buy food - it's over an hour walk to the closest supermarket.

When I was a taxi driver all those years ago, 500 mile days were normal (that's 3 runs to the airport, and airport/docks runs were what I did). The car I used for that I bought at about 6 years old with 50,000 miles on, it had 260,000+ on when I got rid of it - and I only got rid of it because I stopped taxi-ing and started using a motorbike exclusively for a while.

Also, I worked in London for a time, which was 95 miles each way, every day.

Now, with my current job - I'll do 10 miles, work, 5 miles, work, 10 miles, work, 8 miles, work - etc. 50-150 miles in a day is far from uncommon.

That sort of usage profile is far far harder on the vehicle mechanically than doing 100 miles in one hit.

I think I'm allergic to mass transport - I have a pathological hatred of buses, trains, etc. Even if I liked the bus, to get to town there is one every two hours each way from my closest stop (a mile walk), nothing before 8am or after 7pm, a reduced service on Wednesday and nothing at all on Sunday.


Just because England is a smaller land mass, it doesn't mean you can't make it big...

And, I haven't owned a car with less than 150,000 miles on the clock for many years. My current one is on 174,000.

And I still don't view a new car as any advantage - for me.

(Oh, and for reference - very very few people in the UK ever even think of km instead of miles. All our cars record in miles, our speed limits are mph, our road signs state miles - the only time metric measurements are used is stuff like the approach to a junction - it switched from yds to metres a few years back)

You can't kill an Austin FX4 Black Cab with that diesel engine.
 
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