Go Back   Team-BHP > BHP India > What Car? > Sedans


Reply
 
Thread Tools Search this Thread
Old 4th December 2007, 22:36   #1
Senior - BHPian
 
Nitin's Avatar
 
Join Date: May 2006
Location: Houston, Texas
Posts: 3,301
Thanked: 9 Times
Default Car Dilemma- Please help

Hello everyone,
I've been doing some research on one of my cars,for the past couple of weeks. The final picture didn't make me happy,hence this thread. I'd love for anyone living in the US (or who has lived here ) to pool in with your inputs.

Here's the senario:

In May '07, my wife got her license and we decided to get a 2nd car.My car being a manual tranny,we had to get an AT. Cost was the main issue,and after looking around a whole lot,we found a good 2004 Kia Optima LX at Carmax.It had just 22k miles on the odo,and was in good condition.It had leather seats,alloys..etc.The cost was $13K,and we liked the car in all aspects. So we went ahead and bought the car, getting it financed through a credit union. Since I had a whole lot of stuff that I was paying up for,they cranked the % rates to 9.5%. The prevailing rates were around 7-8% for used cars.

Recently,I tried to refinance the loan and when I applied to a few places,I got to know that the current value of the car is just $7k-8K. I was shocked to hear that.It meant that I was paying close to $14k for a car that was worth $7K,that too within the 1st 6 months of having the car.

Anyway,moving forward with the situation- I was wondering if it would make sense in trying to sell this car,or trade it in for something new. My wife got on a payroll,and I guess it would make sense in getting a newer car for the same monthly payments we make.

The flip side- Would I lose heavily in the process of trading my car in? Since I have already paid close to $1,800 in montly payments, would this value be reflected anywhere when I look at another car?

I'm really not sure if this is something we could discuss, or is it the case of 'bad luck..keep the car and try to pay it off in 5yrs'.

Given the fact that my wife has 6 months of driving experience,I wouldn't be scared to look at a new car. The main feeling I have at this point of time is that I'm paying way more for a used car,than what it is originally worth. If it was a new car,I wouldn't have thought much since I know that the minute a car is driven out of the dealership,its value drops a straight $3-5k.

Do give me your ideas,since I'd like to get going and fix this ASAP.

Regards
Nitin
Nitin is offline   Reply With Quote
Old 4th December 2007, 22:48   #2
Team-BHP Support
 
mobike008's Avatar
 
Join Date: Sep 2006
Location: Hyderabad
Posts: 10,728
Thanked: 7,889 Times
Default

Since the re-evaluation shows its 50% lesser than what you paid for it 6 months ago. It does not make any sense in holding it for 3-5 years by that time it would go for free.

Sell it away and cut your losses
mobike008 is offline   Reply With Quote
Old 5th December 2007, 00:00   #3
Senior - BHPian
 
rocksterraghu's Avatar
 
Join Date: Feb 2007
Location: Bangalore
Posts: 1,202
Thanked: 65 Times
Default

Mods, can you please move this thread to this section?

http://www.team-bhp.com/forum/what-car/

Last edited by rocksterraghu : 5th December 2007 at 00:02.
rocksterraghu is offline   Reply With Quote
Old 5th December 2007, 01:01   #4
Senior - BHPian
 
Nitin's Avatar
 
Join Date: May 2006
Location: Houston, Texas
Posts: 3,301
Thanked: 9 Times
Default

Quote:
Originally Posted by rocksterraghu View Post
Mods, can you please move this thread to this section?

http://www.team-bhp.com/forum/what-car/
Mods,please move this thread to the right place. I felt it ought to be in the 'Ask the gurus' section,since this is more of an advice-seeking thread.More than looking at buying a car,the idea was to get some pointers from fellow BHPians.
Nitin is offline   Reply With Quote
Old 5th December 2007, 21:35   #5
Newbie
 
Join Date: Nov 2007
Location: Pune
Posts: 7
Thanked: 0 Times
Default

OP

1) When you buy from CARMAX .. Yes one is expected to shell out around 2-3K more based on model. Hence Yes the CAR which you bought could have been 11K car from private seller.

BUTTT ... The efforts & stress you may have to endure for finding right CAR may be overwhelming. Hence CARMAX was your "Risk Dilution" option where you paid "premium on price" but got it from "Dependable source" so as to speak ...

Now One would not called your situation as Dilemma as ... Dilemma is WHAT decision to make ( situation before Commiting to something ).

In your case you have already commited to your CAR ( albeit expensive by 2 K. The 1K accessory you add is your preferance which is not considered by many as taste / choice differes ) So question for you would be do you want to sell & buy new or hold on to it for some time.

Well here is something you need to ask yourself ? Are you happy with your CAR & does it doing what is expected to do when you decide to buy ? - If the answer is YES .. Case closed why would you worry about "paper loss" or ( paper gain ) as things are going the way it's supposed to go in the first place.

Also the "monthly payment" is misleading comparision. Actually Car Salesman makes their "Sales kill" on this Monthly payment parameter. You should not be concerend about monthly payment because the "duration aka term of loan" will come into consideration. Hence UNLESS you are getting brand new good CAR for the "same term and for same monthly payment" the option of switching a CAR does not come into picture.

Based on the information you give and if answer to your question is "you are happy with your CAR" .. You need to hold this car for next 2-3 years even if you have paid more money as of now.

The reason is as you are using car .. all cArs depreciates. hence 2-3 years from now due to depreciation the "seemingly extra price difference will get reduced" and you may have option to buy than contempary car with new features / technology etc.

P.S - Ofcourse if Wife WANTs to have a new CAR than all bets are off. Everybody knows that Logic & finance calculation does not apply in that case

* SZ *
SeventhZense is offline   Reply With Quote
Old 12th December 2007, 02:16   #6
Senior - BHPian
 
Nitin's Avatar
 
Join Date: May 2006
Location: Houston, Texas
Posts: 3,301
Thanked: 9 Times
Default

SZ, I am happy with the car,no doubt. Touchwood,its not come up with any problems yet.
The only reason I was thinking of trading the car in for something else,is due to the fact that the present value is under $9K. That being said,if in 6 months the depreciation is around 40%,I'm not sure what to expect in 2-3 years time. I just don't want to end up in a situation where a car that I paid $14K for,is worth less than $3K in 2-3yrs time.
Instead,if I were to settle in for a newer car,and hold onto it for atleast 3-4 yrs,then not only would the resale value hold up closer,on the whole it wouldn't be too bad a bargain.

Well..right now I'm just sitting here scratching my head trying to figure out what to do. The 2008 Lancer & probably the Mazda 3 are two cars I'm interested in. I already have a 2004 mazda 3,hence the inclination.
Nitin is offline   Reply With Quote
Old 12th December 2007, 03:28   #7
Newbie
 
Join Date: Oct 2006
Location: BANGALORE
Posts: 8
Thanked: 0 Times
Default Keep it

Nitin,

Not sure how many miles you have on the KIA, but what's the blue book value of this car? Depending on how desparate the dealer is, you maybe
able to get the value as stated by say kelleybluebook or edmunds.com

I traded-in my Mazda for a 325I a couple of years ago and the dealer was
quite desparate and agreed to pay full blue book price (car was around 6 yrs old)

If I were you, I would use that as a second car and drive it to the ground.

Maybe you can trade up your Mazda instead to a BMW or Audi? :-)

Chaps
Chaps is offline   Reply With Quote
Old 12th December 2007, 04:32   #8
Senior - BHPian
 
DirtyDan's Avatar
 
Join Date: Jul 2007
Location: Dharamsala
Posts: 1,798
Thanked: 744 Times
Default What you already know

I will tell you what you already know. It is easy to get caught up in the consumerism and conspicuous consumption of North Americans. I suggest you concentrate on paying off all your debts in the next 5-7 years and then start paying cash for things. It makes the math easier for one thing. Also, you have paid a tremendous price for an AT. Are you sure she can not be taught to handle a manual tranny?
DirtyDan is offline   Reply With Quote
Old 12th December 2007, 12:55   #9
Senior - BHPian
 
kbk_75's Avatar
 
Join Date: Jan 2005
Location: Bombay
Posts: 1,226
Thanked: 343 Times
Default

Quote:
Originally Posted by Nitin View Post
...The only reason I was thinking of trading the car in for something else,is due to the fact that the present value is under $9K. That being said,if in 6 months the depreciation is around 40%,I'm not sure what to expect in 2-3 years time. I just don't want to end up in a situation where a car that I paid $14K for,is worth less than $3K in 2-3yrs time.
Instead,if I were to settle in for a newer car,and hold onto it for atleast 3-4 yrs,then not only would the resale value hold up closer,on the whole it wouldn't be too bad a bargain.

Well..right now I'm just sitting here scratching my head trying to figure out what to do. The 2008 Lancer & probably the Mazda 3 are two cars I'm interested in. I already have a 2004 mazda 3,hence the inclination.

Nitin, I think the scenario you mentioned above will be fairly accurate (aside from the 40% depreciation in 6 months bit). KIAs do depreciate quite hard, and it appears to me that you have paid a bit more for your car than it was truly worth to begin with, which will only make the depreciation seem even greater. In 3-4 years' time your KIA will be 7-8 years old and about to meet its third buyer. You will probably not get much when you want to sell it. A 2008 Lancer or Mazda3 will be worth A LOT more in 2012 than your 2004 Kia will be. That said, consider how much it will cost you to make the switch from your Kia to one of those and see if it makes sense to you.
kbk_75 is offline   Reply With Quote
Old 12th December 2007, 21:35   #10
Senior - BHPian
 
Nitin's Avatar
 
Join Date: May 2006
Location: Houston, Texas
Posts: 3,301
Thanked: 9 Times
Default

Quote:
Originally Posted by DirtyDan View Post
I will tell you what you already know. It is easy to get caught up in the consumerism and conspicuous consumption of North Americans. I suggest you concentrate on paying off all your debts in the next 5-7 years and then start paying cash for things. It makes the math easier for one thing. Also, you have paid a tremendous price for an AT. Are you sure she can not be taught to handle a manual tranny?
Dan, my Mazda 3 is a manual tranny, and my wife's not too comfortable driving it ( though she used to drive one when she was in India).
Nitin is offline   Reply With Quote
Old 12th December 2007, 21:41   #11
Senior - BHPian
 
Nitin's Avatar
 
Join Date: May 2006
Location: Houston, Texas
Posts: 3,301
Thanked: 9 Times
Default

Quote:
Originally Posted by Chaps View Post
Nitin,

Not sure how many miles you have on the KIA, but what's the blue book value of this car? Depending on how desparate the dealer is, you maybe
able to get the value as stated by say kelleybluebook or edmunds.com

Chaps
The Kia has about 24K miles on the odo. The KBB value at this time is around $7-8.5K, and I paid $14K for it when I bought the car in May '07.

That being said, I read this article that in detail describes the best & worst cars in terms of resale value-

[FONT=Times New Roman][SIZE=3]
Quote:
[FONT=Times New Roman][SIZE=3]VWs keep just under half their value after a 60-month cycle. The other brands that round out the Top 10 are BMW, Acura, Honda, Porsche, Subaru, Lexus, Infiniti, Audi and Toyota. [/SIZE][/FONT]
[FONT=Times New Roman][SIZE=3]On the other end of the spectrum, the worst brand to hold value has been singled out as Suzuki. With Suzukis, you only get about a quarter back for every dollar after 5 years. [/SIZE][/FONT]
[FONT=Times New Roman][SIZE=3]Other cars that really stink when it comes to holding value include Kia, GMC, Mercury, Dodge, Chrysler, Lincoln, Jeep, Ford and Jaguar.[/SIZE][/FONT]
Source- MSN Auto.

Too bad this wasn't part of my research before I bought the car.

I have another choice-
Since I already have a Mazda, the dealership would do anything to get me to buy one more. I have refered friends too,so overall I'd be able to strike a good deal. Same car, the Mazda 3 'i' version, not the 's' version that I have.
[/SIZE][/FONT]
Nitin is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
Calling all mech/auto engineers, Please help me decide my future, please!!! salilpawar1 Shifting gears 28 13th May 2009 20:18
Big dilemma - please help urgently! himanshugoswami Sedans 27 29th June 2007 23:33
Big car dilemma, help me decide fast!! karthik247 Sedans 17 1st July 2006 12:39


All times are GMT +5.5. The time now is 13:59.

Copyright 2000 - 2017, Team-BHP.com
Proudly powered by E2E Networks