I am looking to buy my first car and for the longest time I have wanted a Honda Civic. I don't know so much about cars and have alot of questions but I am very apprehensive about asking people, like mechanics or dealerships because I don't want a biased answer because they are trying to sell me the product. So I am basically looking for some advice

My situation: My girlfriend and I are in our early twenties, going to University. We will be finishing in a few years and will most likely be able to attain full time, decent to well paying jobs coming out. We are going to be sharing the burden of paying for the car, insurance, gas, repairs. We have saved up about 4500 in order for a down payment. We both work part time and will have about 600-700 a month in order to pay for insurance/finance a car. We need to purchase car by the middle of March to get to school.

We also want a car that is not going to be a stopgap. We want one that is going to last for 10 years if possible. So that's why we are targeting an 06-10 honda civic for that reason. They supposedly run for a long time if properly taken care of, arent too bad on insurance and are great for gas. We also both LOVE the look of it.

So here is my question. We have been targeting one that is in the 7000-9000 range. With our downpayment, we should be able to finance it for 4-5 years on about 150 a month at 5% interest rate. We can get an 07-8 with about 130K on it for that price.

OR we could go into the range of 13000 to 14000 but we would need to finance it for 6-8 years to get the same 150 dollar payment a month. For that price we could get a 2010-2011 civic with only 70K on it.

After we finish school in 2 years it will be no problem at all to make the payments but my girlfriend is not willing to commit to an 8 year term. I myself realize that we will be paying upwards of 2000 dollars in interest. But having a car with less KM, less wear and tear, and newer would not be worth it? I don't see what the difference between a 5 year term to an 8 year term when we will be able to handle the payments regardless

Also who would you be more trustworthy in buying from? We have a Honda dealership in town. (Sterling Honda, Hamilton, Ontario). Would it be smarter to go with them or with a smaller dealership? Also would you purchase warranties or no? I plan on taking great care of the car and have done alot of research on how to maintain a car. Also for a mechanic. Should I trust the mechanic at a dealership or find another?

Just looking for some opinions on this matter... any help is greatly appreciated

 

Most of the mainstream finance companies have rules like:

Loan amount > $7500 (not worth the paperwork to write small loans)
Age of car + term of loan < 9 years
Miles on car < 100,000
Provable monthly gross income > $2000

There are very few loans > 60 months written on used cars, which is a good idea for the consumer anyway.

I see you are in Canada so things may be different there.

A credit union (are there credit unions in Canada?) can be more lenient, but they're all going to need to see some evidence that you have income and ability to repay.

Finally signing a joint loan is not something to be taken lightly, especially when you are not married.

 

or you could just pay cash for an older model and save money live below your means.

 

Have you considered a lease on a new 2013/2014 Civic? A month ago, with ZERO out of pocket costs, I leased a new 2013 LX for $199/month. Honda leases in Canada may be different, but might be worth looking at. I didn't want to put up a few grand for this car, so the lease was a good deal for me. I may buy it out at 3 yrs, or turn it in for another new one. Anyway, the Honda lease plan includes tax/license/title/fees in the monthly lease payment of $199. Something to think about... might be nice to keep that cash you have.

 

Or do like my kids did with me..Mom and Dad low cost loan. 0% interest but we get the 1st born child if they default on their loan with us.. Lol

 

This is the best idea. Our economy sucks so a job isn't guaranteed. A car made in 2001 had now history of running a long time. The money you don't spend put into a money market and use to fix your car or buy another one.

 

I never buy an used car with a loan especially if it is out of the warranty period. I'm not talking about extended warranties, those are usually awful. If you decide buy an used car with a loan, get a certified used car. Certified cars are premium price so no budget winners here.
You should save enough to buy an used car outright and have cash reserves for any future repairs.
The lease idea sounds interesting. Front end down payment with mileage limits can be a little taxing since you don't own the car. Your past credit history will have a major influence on how much you are going really pay. The offers you see on ADS, is usually reserved for high credit rating customers.
Good luck.