> Throw in a car payment
They said sensible car. A car you need a loan for is not a sensible car.
They said sensible car. A car you need a loan for is not a sensible car.
You negotiate the price you are willing to pay. The dealer has no idea if you are leasing, paying cash, or financing. The all-in price is either financed or leased at a specified interest rate. They do not "add in" an up front payment. That doesn't even make sense, and would be incredibly misleading.
If we negotiate $25,000 for the car,and I finance at 0%, you are saying they up the price to $27,500 to "build in a profit"? Nonsense. The numbers are in front of you and you can do the calculations yourself with high school math. 0% is 0%.
You are totally out of your element and shouldnt be providing financial advice. Maybe that's why the dealer rips you off.
Edmunds has a calculator if you need help with the high school math: https://www.edmunds.com/calculators/incentives-rebates.html
2. Even if I take your assumption as the other poster's definition of sensible and remove any car payment, gas + insurance + maintenance yields a 6 year cost above $12k. My point stands.
This will depend on the individual circumstances. Liability insurance is significantly cheaper than full coverage. Average annual liability insurance is ~$552/year [1]. Driving the ridiculous 12k miles per year that average americans drive, a Prius would burn roughly 226 gallons of gas. At today's price of gas ($2.94), that's $664/yr. At 6 years insurance and gas will run you $7,296. I'm very skeptical of depreciation + maintenance blowing $4,704 over 6 years on a Prius...
The high cost of car insurance, coupled with the low wages in this state, are a significant factor that kept a lot of my peers in poverty well out of high school. The usual story goes like this:
- Reliant on a hand-me-down car to get to work.
- Work barely pays for rent, car insurance, gas, and food.
- Car needs maintenance but no money for that.
Charitably, I think the lowest I've seen anyone's insurance payment in this state is $89/month, because they were over the age of 25 and their car fit the requirements for lower insurance rates nicely. They still had a car payment ($400/mo. IIRC) though.
Again: liability insurance is a different thing. When you don't own your car (aka when you take a car loan), you are required to have insurance that can cover the cost of the car. When you own your car, you only need to pay for liability insurance, which is much cheaper.
Your story is all too common in the U.S. It's expensive being poor here. The frugal solution is to have money to buy a car outright. It's tough getting out from under that dilemma.