Lexipro

Hey Christy26. Have you considered the NX200t. I just test drove one today and was very impressed. I currently own a 2014 RX. The NX is a sharp looking vehicle with a Msrp of $36,100 (no nav, no moonroof). That's 15k less. Say you purchase it @ $34,000 with taxes and fees brings it to 37k. Take the 10k from the Camry and add 5k of your money. Then finance 22k for a monthly payment of $467. That sure beats $630. Don't get me wrong the RX is a beautiful vehicle but 51k and not being a homeowner just doesn't make sense. I think the NX200t is the perfect entry level Lexus. Good luck.

vlad_a

Eric, there is no need to do this analysis. Higher percentage costs you more money regardless of the loan amount.
Say you make $10,000 payment on a loan with interest of 5%. Assume the loan principal never gets below $10,000. In 5 years, it would save $2,155 in finance charges. Think compound interest. Same example, but 2.5% interest. Now we are looking at $1,038 in 5 years.

If the first loan was 100,000 with a 30 year term and the second was $20,000 with a 10 year term, an emotional decision would be to put $10,000 into the second loan and have it paid off in ~5 years. However, it would be a better investment to put that money into the 100,000 loan and keep the second one full term, putting all extras into first.

Of course, there are minimal payments in play, which scares most people to do this type of funds allocations.

tensaix

It's your money and do what you feel comfortable.

I just bought 2015 F Sport last month at Oakland dealership. I downed 22k because I want to keep my payments near $500. I am already a home owner. I plan to pay it off before then.

Before the RX, I did the same with G35 sport but wasn't a homeowner then.
IMO, I think it's crazy to pay more than $500 + plus insurance for a car but everyone is different.

You are young and I would do the same if I was your age. Actually I did that with the G35 sport at your age You are only young once. Live a little.

You'll love the RX

islandbeef

Lower initial payment. He can change his mind before the lease is up, more options available.

MjThind

IDK about most people but I tend to buy cash or I finance and pay my cars off with in 6 months. I hate payments and the only payments I pay are my mortgages and thats it. But rule of thumb I've used is if your buying a deprecating asset in cash then it shouldn't be more than 1/4 of your income and thats what I've been using. But 20k depending on your situation maybe too much or just right or little. Key to financing is a car payment shouldn't be more than 10%-15% of your monthly income, doesn't matter if you finance it 12, 24, 36, 48, 60 or 72 months, so using that as threshold just determine if you need to pay more or less. Hope this helps!

christy26

What was the MSRP of the car and how much did you pay after negotiation? I heard that when buying a car, the car is a lot cheaper when you go to Oakland than buying it in the SJ area

jitdc

Just to chime in again on this... a car is a depreciating asset as several others have stated. You lose money when you drive it off the lot, you basically lose money with each mile you drive, couple that with the money you pay for gas and and you end up paying out the nose just the drive a car. Albeit a nice car.

More analogies....
Its like buying a stock when its at the peak and you know going into that the stock is going to go down at a pretty steady rate. Why pay retail when the same or similar can be had for wholesale?

At the end of the day it is your decision and your money. Either way its not a bad spot to be in at your age.

ericsan13

I think we are talking about different situations. What I am saying is that the rule does not apply if you already have an existing loan that you are paying.

Example:
Loan A is a 60 month $10k loan at 5%. 50 payments in, 96% of your money is going into paying down the principal.
Loan B is a 60 month $10k loan at 3%. On your first payment, only 86% is going towards your principal.
In this case the "pay down your highest interest loan" does not apply. The extra payment would be better to go towards the lower interest loan B. OP didn't indicate if they had an existing loan, therefore I was looking at his/her potential situation. Not to mention that this rule doesn't consider whether or not interest expenses are tax deductions.

I could be wrong, but that's how I've always seen it. Yes, if you want to minimize how much the bank takes, you need to do this analysis. Best to speak to a financial adviser who majored in finance.

-Eric

ericsan13

Christy, the general rule of thumb for buying a car is the 20/4/10 rule.

With a 20% down payment and 4-year loan your entire car payment should be less than 10% of your gross income.

Let's do the math. 52k car, 10.4k down payment. $41.6k loan at .9%. That's a monthly payment of $882.69. Meaning your pre-tax salary+investments should be $105,992 per year.

If you want to follow the bank rules, look into front and back-end debt ratios. But since you stated you have no other debt, you will easily fit this criteria.

Personally I am risk adverse so I ended up buying a used RX with a 75% down payment. I regret doing that but I sure do feel better about my level of debt.

I would put in 0% down if I were you and invest my money somewhere else.

rxonmymind

Keep the 20k to invest it elsewhere. Go for the low % and a near minty used one to roll in. Oh & pit some of that 20k for a righteous stereo system: P
Enjoy.

tensaix

It was Obsidian F sport with Navigation , Park Assist, Mark Levinson Premium sound.
MSRP was around 54k or something ( can't remember) but OTD was 53k with .9 APR.

I emailed the internet sales manager (Eric), and meet him the next day.
He was great and the process took no less than an hour.
I would probably get it lower on OTD price if I work harder but it's the most painless buying experience ever. I'm sure you'll get a better deal since it's almost end of the year.

FYI, the finance guy was kind of a jerk. Don't let him ruin your experience.

Overall I was impress with the dealership.

Will see how their service dept. Sometimes it's night and day.

kahuna415

What dealership are you going to purchase your car at? I live in San Francisco and went to Serramonte Lexus. Good Sales Dept. and the Service Dept. is #1. But remember , Alameda County sales tax is 9.0% while SF and Santa Clara County is 8.75 %. Good luck!

christy26

Its still up for debate, I've never really considered Serramonte, I just looked for dealers that aren't too far from where I live. The closest is Stevens Creek in Santa Clara but that had really bad reviews, and then theres Magnussen and Putnam.

vlad_a

It should not make any difference which county you buy your vehicle from - they should charge you based on your residence. It'd be great if they didn't because I got my RX out of state.

Dreamlab

To Christy26: dude it's YOUR money, the more you put down the lower your payments, go for it, I think we put down a bit more than that and have our payments in the $500 range...