General financing/trade-in/ordering question

daimon1313

Hey everyone. First off, let me just express what an incredible resource this forum is. I've learned a ton just by reading through all of the threads and it's helped me lock down on what I'm looking for.

This is a general financing question/scenario, so hopefully some of the dealership guys can help as well.

Here's my situation:

I recently (March '10) traded in my 2007 Altima 3.5 for a 2010 Hyundai Sonata. It was painful but I was married, preparing for an uncertain future after the Navy and getting ready to start a family. The 2010 Sonata just made sense.

Since then, I've gone through a divorce and was able to lock onto a job that gave me a significant pay hike. This complete turnaround has also affected my outlook on life a bit. I've worked non-stop for 10 years and I'm heading into a job where I'll work even harder; the good news is that this job will give the money and time to actually have some fun.

I decided I wanted a sports car, dammit. I've locked onto become a Z owner once more.

My question has to do with my financing options and the hurdles I'm facing. Currently, I owe $29k on the Sonata (I was upside down on the Altima when I traded that in). My plan is to not purchase the 370Z until I have $15k-$20k saved up in cash in order to put forth towards this purchase.

I should be able to have that amount by January or February. My plan is to purchase a new 2010 T/S or a NISMO.

From what I can figure, if I trade in the Sonata (currently $17k-$18k kbb value) and then put $20k towards the overall purchase, I'll be financing around $26k if I'm able to get the car for $34k or so.

If my figuring is correct, please let me know.

I'm definitely going to using the invoice information for negotiations, but I wonder if this trade in situation would be a detriment to me when haggling the price. I'm also going to be a bit picky on what 2010 I get (color, MT, etc) and I'm going to be willing to travel to find a deal. But if I can't find a deal, I'll be willing to order a 2011. Do these invoice negotiations also apply to when you order a car?

Also would love to hear tips on how not to get royally screwed over in this scenario.

I appreciate any and all help. I apologize if my questions are obvious; I'm still a newb.

__________________
Saving up now for a NISMO 40th Anniversary. Hopefully. Maybe. We'll see. Definitely a Z though.

TreeSemdyZee

If you currently owe $29k on the Sonata and trade for 17. You're in the hole 12k. If you put 20 down, it would be like you're putting down 8k if you were coming in with no trade.
I would suggest making massive payments toward the Hyundai instead of saving the money. The reason I say that is that you're paying more interest than you'd make saving the money. The only way that wouldn't be true is if you were paying 0 interest on the Hyundai. It also puts a good face on your credit report.
Just my

daimon1313

Ok, that was my other question. Should have mentioned that.

I actually had to refinance this car about 3 months after initially buying it as part of the divorce, and my interest rate is freaking horrible (6.5%).

So, in reality, I should put enough towards this Sonata so that I'm not upside down on it anymore when I trade it in.

__________________
Saving up now for a NISMO 40th Anniversary. Hopefully. Maybe. We'll see. Definitely a Z though.

TreeSemdyZee

I think that would be your best bet. The best savings interest you're going to make can't be much more than 1 or 2% if you're lucky.
To give you an idea, in the last two months I paid about $125 extra on my loan and knocked around $165 to 170 off of the backend. Basically, I reduced the debt by an extra 40 to 45 dollars in two months.

daimon1313

Thanks for the info. At the rate I would be ultimately saving for the car, I could certainly make some fairly large payments on the Sonata.

Anything to help me get out of that mess and into a Z.

__________________
Saving up now for a NISMO 40th Anniversary. Hopefully. Maybe. We'll see. Definitely a Z though.

m4a1mustang

I would consider a used Z. You can find a number of low-mileage cars and you will save several grand in the process.

__________________
- Steve

Zs & Coffee - Saturdays at 10AM in Fairfax, VA and Columbia, MD (Click the banner!)
LIKE us on Facebook!

daimon1313

That's also something I'm willing to consider, certainly. The trick is, with this car I'm going to be a bit picky with what I'm looking for specifically. Of course, I'll be willing to travel all over in order to find the perfect deal for the exact car I want.

Trick is..I'm not sure exactly which one I want yet. Ha ha.

But a used 2010 with 1K-2K miles? Possible. I'm just weary of what was done to it, that sort of thing.

__________________
Saving up now for a NISMO 40th Anniversary. Hopefully. Maybe. We'll see. Definitely a Z though.

FuszNissan

The trick will be saving up enough cash to offset the depreciation of your current car and the interest. I would go to a credit union or penfed and see if you can get a lower rate that will help lower the Z payment.

__________________
Mods: Too Many to list!
LouFuszNissan
ZDAYZ 2012

ClemsonWill

I agree with Fusz. You can save another $500 dollars over the next 6 months if you can get your interest rate down to 2.9% which is what Penfed just offered some other forum members. Either way definitely chunk at the Sonata to get it paid down.

Good luck and I look forward to seeing pictures of your Z.

__________________

daimon1313

Problem is, I literally *just* refinanced this car with a credit union since I had to get my ex-wife off the title of the car, as part of the divorce. I just made my first payment on this new loan last week...I went from my initial rate of 3.1% to 6.5%, which flat out sucks.

I'm definitely going to be looking into PenFed for my loan on the Z, and in the meantime will be throwing as much cash at this Sonata as I can to be able to owe less than it's worth when I'm ready to trade in and purchase.

Really, really appreciate all the help guys.

__________________
Saving up now for a NISMO 40th Anniversary. Hopefully. Maybe. We'll see. Definitely a Z though.

Jeffblue

if you're going to sell the sonata, sell it now. The newer the car, the higher the rate of depreciation. Basically a few months of depreciation on a brand new car, you're gonna lose more value than a few months on a 2-3 year old car. If you nkow for sure you want to sell a car that is less than a year old, i would recommend selling it as soon as possible. Think of it this way:

in which of these situations would you rather have sold a stock you own:
A. the stock is going to go down 5% in the next 6 months
B. the stock is going to go down 30% in the next 6 months

obviously, B is the choice, and that is closer to the situation you are in right now than choice A.

obviously you can't predict the future in the stock market, but you can predict how much your car will depreciate, and obviously cars aren't really investments. don't waste any more of your money waiting. your money is tied up in a depreciating asset that you don't like. might as well have it tied up in a depreciating asset that you DO like.

definitely SELL now. Either keep it for 3 years and try to get some use out of it, or just cut your losses, and sell the car before it loses any more of its value.

daimon1313

Yeah, well if I had the ability that's exactly what I would do. Sell this thing now while it still has some reasonable value, and get the car I really want.

Problem is, I don't have the cash at the moment to make up for how much I'm upside down on the loan. I will have that cash in 3-4 months, however. Easily.

I don't anticipate the Sonata depreciating much more over the next four months, since the 2011 Sonatas (a new gen) have been out since last March. Obviously, I'd much rather just sell now and get it over with.

I know that one way or the other, I'm know I'm going to hurt somewhere.

In a perfect world, I'd be able to use this cash to put down directly towards the Z. But the reality is I made a decision that's put me in a crappy situation now that I want to change cars.

So, I guess my goal is this: Put forth enough cash towards the Sonata so that when I am ready to trade it in, I'm not completely upside down on it. Hopefully, I'll also have enough cash to put towards the Z as well, but if not....I can afford the payments.

Once again, thanks for all the help.

__________________
Saving up now for a NISMO 40th Anniversary. Hopefully. Maybe. We'll see. Definitely a Z though.

TreeSemdyZee

Take it from someone who has been there (upside down and divorce). Baby steps.

daimon1313

Ha ha... Yeah, it's tough. Luckily, there were no shared assets and no kids.

With this new job though, it's going to be easy to quickly get back on top. I was very, very lucky.

__________________
Saving up now for a NISMO 40th Anniversary. Hopefully. Maybe. We'll see. Definitely a Z though.

daimon1313

Obviously, the best answer for all of this is to keep my Sonata, save my money, pay it off as I can and just enjoy a nice, boring ride while I get settled in the new job and get back on track.

But I've got Z fever. I've wanted a sports car for a long time, I grew up around Z cars and I'm not a very patient guy.

Hopefully, I can just pay off on this Sonata until I get to the point where getting the Z isn't an absolutely detrimental decision.

__________________
Saving up now for a NISMO 40th Anniversary. Hopefully. Maybe. We'll see. Definitely a Z though.