Monthly Payments

Go to Scion.com and build your tC with the extra stuff you want and use that as the total price of the vehicle.

Then find your local sales tax information, usually located at a county home page. If you can't find it, ask a clerk at a local store what the sales tax is in your area.

As for credit, you can apply directly on the scion.com site for Toyota Motor Credit. It takes them about a business day to get back to you. They will send you a voucher number indicating that you've been approved, you take that with you to the dealership. I don't know what happens if they deny your credit.

Your toyota dealership has a standard interest model based on credit score, you should be able to call them to find out what rate you would end up with. I think the rate for people with 0 credit was 14.5%, the best rate I saw was 4.5%. The interest rates are part of the 'standard pricing' model that scion has moved to.

I used an excel spreadsheet I found at CarBuyingTips.com to calculate down payment, term, interest and SALES TAX. Sales tax is often overlooked during the car buying process until the dealer drops it on you. The sales tax on my car was over $1300 so its something you need to consider when buying a car.

The direct link to the spreadsheet I used is here: Loan Calculation Spreadsheet (Right click and choose save as...)

I worked out 4 difference scenarios with different interest rates, terms, and down payments and took the printed sheet with me to the dealership so I knew exactly what to expect. I just wanted to make sure their numbers came out the same as mine. It also lets you test different payment terms and down payments. Just tweak it until you find a comfy monthly payment. I got mine to about $170/month.


krzy

(This might good stuff for the Information Section of the site)

water+Nov 7 2004 said:

Here is what good credit does for you, notice the 'Total cost of the car'
State Sales Tax Rate (%) 7.50%
Selling Price of car $17,600.00
Sales Tax $1,320.00
Rebate $0.00
Down Payment $2,000.00
Trade in OR Adjustment (+/-) $0.00
Amount Borrowed (Principal) $16,920.00

Number of Months in Loan 60
Interest Rate (APR) 4.50%
Total Interest on the loan is: $2,006.39
Your Monthly Payment will be: $315.44

Total Cost Of Loan $18,926.39

Total Cost of The Car $20,926.39

<!--QuoteBegin-water[/i]@Nov 7 2004, 07:14 PM
also,
what can i expect my insurance to be. just a rough average out there... what rate would a 20yr old kid get, having no credit (does that affect it?), having a brand-new car (if i got say 2002 rsx, would it be much cheaper?)...

thanks in advance...

Click to expand...

Credit does not affect your insurance rate, it may affect your ability to get insurance. Insurance rates vary from person to person and car to car. I called my insurance company this morning to add my tC and compared to a 1991 Acura Integra GS, my scion is $300/year ($700 vs. $1000) more based on the value of the car. However, I am over 30, married, with a good driving record and multiple car discount, bundled home owners insurance, etc. I also have higher coverage than you would get to keep me from losing my house in a lawsuit. You can usually call an insurance company to ask for a quote, they'll gladly do it for free. Geico and Eastwood are generally lower priced insurance companies.

I hope this helps!

krzy

Insurance - I am a 25-year-old single male (was 24 at the time I was researching this), and the RSX would have meant significantly higher premiums for me than the tC. Of course, I should mention that I'm not at all certain that my insurance company has any idea what a tC is or how to rate it. When I called my agent, it took three days for me to get insurance on my new tC because my agent's office had to call Nationwide corporate and figure out what the rate would be on the tC because it wasn't even in their system yet. As a matter of fact, GEICO *still* didn't list the tC in their online quote system as of last week. On the matter of GEICO, it's only cheaper if you have a good record.

Loans - I know I've said it before, but people get so wrapped up in interest rates that I'll say it again -- you can save yourself so much money in the long run by putting a little extra down in the beginning and shortening the term of the loan. A low interest rate will still yield more interest over a 6-year term than a moderate interest rate will over a 3-year term. If you have to finance the car over 6 years in order to afford it, you might want to consider waiting a few months to save up for a larger down payment so you can shorten the term. A lot can happen in 6 years. One more thing to keep in mind: If your car gets repossessed for nonpayment, it will cost you WAY more in the long run, and you won't even have the car anymore.

I've been meaning to do this for some time, but haven't quite gotten around to it. From what I read on here, and some of the cases I've seen at my current job, it has become apparent to me that lots of people don't know as much as they could or should about car loans, interest rates, and monthly payments. So, in an effort to help out anyone in need, I'm going to try to put together a little tutorial on the subject. Please understand that I'm not meaning to talk down, insult, or sound condescending -- if you already know all this, then consider yourself fortunate and feel free to ignore my post. If not, though, I hope this is helpful.

That having been said...
--

Let's first look at some numbers. Suppose you buy a car with a $20,000 purchase price and put $2,000 down.

5% interest rate:
- 36 months: $539.48/mo, $21,428.28 total
- 48 months: $414.53/mo, $21,897.44 total
- 60 months: $339.68/mo, $22.380.80 total
- 72 months: $289.89/mo, $22,872.08 total

10% interest rate:
- 36 months: $580.81/mo, $22,909.16 total
- 48 months: $456.53/mo, $23,913.44 total
- 60 months: $382.45/mo, $24,947.00 total
- 72 months: $333.47/mo, $26,009.84 total

15% interest rate:
- 36 months: $623.98/mo, $24,463.28 total
- 48 months: $500.95/mo, $26,045.60 total
- 60 months: $428.22/mo, $27,693.20 total
- 72 months: $380.61/mo, $29,403.92 total

20% interest rate:
- 36 months: $668.94/mo, $26,081.84 total
- 48 months: $547.75/mo, $28,292.00 total
- 60 months: $476.89/mo, $30,613.40 total
- 72 months: $431.15/mo, $33,042.80 total

You may have noticed a pattern, and that's that the total price of the car after making all the payments, gets scarier and scarier as you make the interest rate higher and the loan term longer.

That having been said, there's a reason I spent the time to put together that chart. Many people are entirely too focused on the amount of the projected monthly payment when they decide whether they can afford a car. If you look at this chart, though, you start to see how misleading it can be to look at the monthly payment alone. At 5% interest, you pay about $500 extra PER YEAR for each year that you add to the loan term. That means, of course, that you would save $1,500 by paying the loan off in 3 years instead of 6. Where it really gets imperative to keep your loan term short, though, is when your interest rate gets higher.

Some of you may be saying to yourselves, "No one gets interest rates that high" -- but you're wrong. I see defaults every day where the interest rate is anywhere from 12% to 25%. That's right, 25%! Even with bad credit, you can get a better loan than that. If you can't, then don't buy a new car until you can afford to pay for all or most of it in cash. If the best rate you can get is 15% and you only have $5,000, consider buying a reliable used car until you can afford something better. You'll appreciate keeping the $5,000 to $10,000 you would otherwise pay in interest.

The real lesson of this chart, though, is that if you can't get a good interest rate, you can more than compensate by putting more money down. This is true for two reasons: first, you are financing less money for the term of the loan, and second, since your monthly payments will be smaller, you'll be able to afford to pay the car off faster -- saving you even more money.

For example, say you have a 10% interest rate and put $5,000 down instead of $2,000. Now you can get a reasonable $380.44 monthly payment on a 48-month term, and save over $1,000 in interest over the life of the loan, all while paying off the car a year faster! If you had just put $2,000 down, you would've had to go with a 60-month term to get a payment in that range.

Don't be fooled into thinking that you can afford a car if you just choose the longer term. If you want to lower your monthly payments drastically, just put more money down. My loan term is 36 months and my payment is only $358.61.

For Part II of this series, "Repo Horror Stories," see below.

Repo Horror Stories

There's another good reason to be sure that you only buy as much car as you are absolutely certain you can afford. Part of my job right now is to review motions for default judgment. Most of those motions for default are on car loans. Let me give you an example of one of these defaults:

Vehicle Sale Price: $20,891.34 (inclueding sales tax)
Down Payment: ($2,000.00)
Amount Financed: $18,891.34

Interest Rate: 14.99%
Monthly Payment: $449.32

Total Amount of Payments: $26,959.20

Total Vehicle Price: $28,959.20

Okay, with me so far? The "Total Vehicle Price" is just the total of all the monthly payments plus the down payment. Now, the person defaults on their loan after 2 years.

Total Beginning Balance: $26,959.20
Less Payments Made: ($10,783.68)
Amount Still Owed: $16,175.52

Now they repossess your car and sell it "to the highest bidder." What this really means in many states (including Georgia), is that the finance company sells your vehicle to the highest bidder at a private auto auction. That means that the finance company is basically selling the car at a ridiculous price to one of their buds. They don't care, because they can just recoup the difference, and more, from you. Also keep in mind that this car is now over 2 years old, that wholesale value (what they will try to sell it for) is ridiculously low, and that the total price of the car itself when you think about depreciation is at least a couple thousand less than what you paid -- you have to subtract taxes and extended warranty fees, gap insurance, or anything else that's not the price of the car itself, and adding loads of options probably won't greatly increase the value of your car at wholesale, either. So:

Amount Still Owed: $16,175.52
Less Re-Sale Amount: ($12,000.00)
Repossession Costs: $980.00
Attorney's Fees: $1,250.00
Other Fees: $500.00
Additional Interest: $1,189.90
Total Amount Now Owed: $8,095.42

You now owe over $8,000 on a car you no longer even have. Not only that, the total amount due has to be paid immediately, or else it will continue to accrue interest at the rate of your original loan. What's more, having a lower interest rate wouldn't help you as much as you would think in this situation -- they're still going to sell the car for much less than it's worth, and MUCH, much less than the amount of your remaining payments.

I think the lesson here is clear, and we all know that getting a car you can't afford is a bad idea, but for me, it really hit home when I saw some of these ridiculous numbers.