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I want to buy a new car at some point in the next 6 months. What is going to help me get the best deal – aside from improving my credit rating, which is separate issue.

My current car is about 4 years old and has just over 36,000. It does have some minor body damage which I’ve been told would cost about $ 1000 to repair.

The current trade-in value for my car in good condition (which is where it would be if the damage was fixed) is about $ 4200.

I currently owe about $ 7200 on my loan.

If I have about $ 2500 to add to the trade-in, which of these options would get me the best deal:
1. Fix damage and trade-in with $ 1500 cash

2. Fix damage and put extra cash toward existing loan. Trade-in car only.

3. Go to dealer with car in current condition plus the $ 2500 in cash.

4. Put $ 2500 toward my loan and then trade-in just the car.

Or some other option.
For what it’s worth, the damage resulted from trying to avoid a sheep in the middle of a back country road, not because I have difficulty getting into parking spots and what not.

The reason I didn’t have it repaired was because I had missed an insurance payment and wasn’t covered at the time.
Even if I opted to buy a used car, the same question applies.

4 Thoughts on Buying a new car: what will help me get the best deal?
  1. Reply
    barbie h
    September 1, 2011 at 7:14 am

    You don’t need a NEW car. Why not buy a Pre loved car. With a warranty maybe? Why waste thousands on a car that is going to be worth less then what you paid for it in less then 2 years??? B uy a used car, and save your hard earned money!

  2. Reply
    September 1, 2011 at 7:37 am

    Where I live, a good used car is recommended for your low mileage and body-damages-prone environment/usage

    A better deal can be bargained if someone you know is buying his/her car in parallel with you

    Perhaps you want a smaller car than your existing car to minimise body damages, too

  3. Reply
    mike s
    September 1, 2011 at 7:54 am

    Option # 3 would be the easiest to structure your purchase. First, the dealer can be assured it’s fixed up to his standards by his body shop. This is assuming the $ 1000 estimate is for a quality repair. Upon resale, the dealer can disclose specifically what was repaired & be able to show before & after pictures. Secondly, cash down always looks good to lenders.
    Paying down your loan falls into considering your credit situation. There may be a better chance you’ll get a lower interest rate on the new car loan; especially since you’re putting money down even tho you’re upside down.

  4. Reply
    September 1, 2011 at 8:34 am

    Fix the car and sell it, don’t trade it. If you trade with the damage, a dealer will exaggerate the damage to make you accept a lower trade price. If you fix and trade, you might not recover the cost of repairs because you are selling wholesale to the dealer. If you fix and sell, you have a good chance of recovering the cost of repairs.

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