I'm pretty much new to buying cars, I currently own a 2005 camry LE, I am currently financing it (dont forget I am still a (20 yrs old) college student). So far I've already paid off 5k with 13k left over. Because I commute alot, I was thinking of trading in this car for the camry hybrid. I know the price of the camry is a bit high, but I thought I would treat myself to this car because I am almost done with my RN program which means I am able to pay for it.

Actual Question: If I trade in my car....

. can I goto any dealer to trade in the car and try for the TCH?
. will I still get the tax cut?
. will it be hard to negociate for a good price for the TCH?
. what will happen to the money that I have yet to pay for the original car that I am trading in? How does trading in a car that hasn't been fully paid for, for another car, work?
. is this even possible?

Thanks, Sorry for such bad questions but I just need to know.

Bun

 

I can tell you're a Rookie to this so I'll respond like I would to my kids.

So far I've already paid off 5k with 13k left over. (Don't get into the expensive habit of trading cars every two years. Become financially wise at an early age)

Because I commute alot, I was thinking of trading in this car for the camry hybrid. (If your situation has changed then that's a consideration. However you will be trading a depreciated car for one that sells at MSRP. Calculate just how much you will save overall and that includes decreased gasoline costs but increased payments. It may be that just starting out you would want to wait as you actual costs will possibly go up considerably)

I know the price of the camry is a bit high, but I thought I would treat myself to this car because I am almost done with my RN program which means I am able to pay for it. (Graduating is a good reason to celebrate and possibly a reasonable excuse to "move up" to a nicer car_that's the intangable part of the decision process)

Actual Question: If I trade in my car....

can I goto any dealer to trade in the car and try for the TCH? (YES).

will I still get the tax cut? (It's a credit and a credit is only good if you actually pay taxes. There is also a minimum alternative tax and while I make good money and it doesn't apply to me, I understand that some folks, because of the area they live in (high mortgage expenses, high taxes, etc) can actually pay this even though they don't make a gob of money. Chances are if you're single and just starting out you probably don't have to worry about the AMT. However you do have to take ownership before September 30th to qualify for 100% of the tax credit.


will it be hard to negociate for a good price for the TCH? Expect to pay MSRP. The negotiations will be on the trade in value of your car. Go prepared (kbb.com or edmunds.com has used car values)

what will happen to the money that I have yet to pay for the original car that I am trading in? How does trading in a car that hasn't been fully paid for, for another car, work? Let's say you get a TCH for 31,589 (loaded) and they give you $13,589 for your trade in. The difference is $18,000. You still owe $13,000 so you have to borrow $31,000. (you may not have equity in the trade in). Depending on where you live you also have various sales taxes. In WV it would only be on the $19,000. I understand in some states it's on the full amount of the car, even though you traded.

is this even possible? With car dealers anything is possible. I don't know what your credit rating is, but don't get caught into the "i gotta have it" mindset and end up paying an outrageous interest rate. Don't start out life with a huge debt and car payment. Stay focused and make wise decisions. If it means waiting a year then wait a year.

 

Don't forget that Toyota and most other car lines offer a "College Graduate Discount." It is usually $4-500 and applies a few months before and about 2 years after graduation. My wife recently went back to school and got (another) degree. We've used it on 3 or 4 car purchses!

Don't by a car based on this discount. However, don't forget about it if you buy a new car!

 

Honestly, I'm thinking about this the same way WVGasGuy is. 20yrs old and not even out of college really isn't the time to be dropping $30k on a new car unless you are bankrolled by a Hilton. I'm 24, two years out of college and making decent money, but it would be a real pinch to be making that kind of payment on top of all of my other living expenses and trying to put as much money away as I can. (Saving isn't as much fun as a new car but you will thank yourself for it later in life!)

Keep your current car until you have been in the work force for a year. Then you will have a better idea of what you can really afford, which probably isn't what you think you can afford now. Besides, a 2005 Camry is an excellent car and should be good for at least 30mpg on the highway, 25 or better around town. If your mileage is lousy and you want to save on gas money, consider a change of driving habits at zero cost to you. (Click on my signature box for an example of how driving habits changed my gas mileage...it's not difficult to see where I went from my old ways to how I drive today.)

 

I am a recent grad (Dec 05) and hope I can give some advice. I did buy a fully loaded TCH at MSRP. I bought it because I needed a car. I was still using my parent's 1995 mini-van, I didn't have a car of my own. I looked around at all different cars from about 6 months before graduation until I test drove the TCH. I looked at everything in the mid-size family. I decided on the TCH because I liked the Camry to begin with and loved the idea of getting a hybrid. I can't tell you how excited I was when I found out Toyota would be releasing the TCH right around the time i was looking to buy a car! Note here though, I was already looking to buy. You have a car that is only a couple of years old, you dont *need* a car. Also, i had graduated and had been working for about 6 months before I purchased the car. Granted, that didn't give too much time to really establish my finances but I had a pretty good idea of how much cash I would have and that I could survive after paying the car bill each month.

Basically, my recommendation is to wait. Wait until you have graduated and you really know how much money you are bringing in. There are also all sorts of costs that a new grad has that we dont expect (little things for the new apartment mostly). You have a good car now, wait a little bit to establish yourself before you make any big purchases. I know its hard (trust me, it wasn't much fun driving a 11 year old minivan to my new job!), but you'll be glad you waited in the end.

Also, the new-grad discount that Scooters mentioned only applies if you finance with Toyota. My bank offered a better interest rate so it wasn't worthwhile to finance with toyota even with the $400 off. Check out what rates you can get before going to the dealership.

 

Thanks guys for all the help, makes me feel like I have an internet family. I understand that you guys are urging me to wait til I get a better deal or the car is still good. Currently I still live with my parents (funny) and I dont plan to move out anytime soon until I'm done with my Bachelor, so this isn't until another 2 years after I've finally graduate from the RN program. And currently I don't have to pay for much bills except for my own expenses (insurance, car payments, phones, etc), which isnt much. Currently working as an LVN, and income is around 2.4k each month part time. Not to brag or anything, but just facts because I would like you guys to help suggest whether to buy the car or not...like a parent just as WVGasGuy said...I know all of you are in the mid 30s+ making good amount of money and have more experience than I do, which is why I look up and ask such dense question because I understand that you guys are all mature.

And yes, I do get bad gas milage with my camry. I get about 24-26 mpg mix with both highway and city; the 05 camry's tank is 18.5 gallons...... I usually drive 70ish on highway (tank filled 400 miles, but then I tested at 60mph on highway for my whole tank, with the tank filled 420). I am very frugal which means when I drive, I leave long distances so I dont have to break to waste gas even on city driving. I keep up with oil change, tire pressure, etc. And I'm usually the only one in the car (I weigh 105lbs).

Thanks for listening to me nag.

 

I am 27 and still a student. I have three years left for my Pharm-D and just traded a 2004 camry for the TCH. I travel to and from school, sometimes twice a day which is about 25-30miles from my house. With my 2004 camry LE I was filling up one to two times a week. I thought it would be economical to buy a hybrid, plus i like the fact that it is better for the environment. Really depends on where your priorities are. The only difference with me is that my 2004 was paid off. My TCH payments are around 200 dollars per month and I got a low interest rate. With all the said, you have two years for your RN which is good money and a great career. I say go for it if you know you can afford the payments thoughout school. But if you are having doubts about being able to afford it, at least you know you still a have good car(05). I guess it is more of a matter of wanting than needing.

 

I guess this thread should be closed. Thanks...my extended family...for helping.

 

I'm guessing that your LE is a 4 cylinder not a V6. I don't consider 24-26 mpg mixed to be "bad" mileage, even on a 4-cyl. That's about what I got in mixed driving (maybe more 25-27 mpg) with my '98 XLE 4-cyl and that's about what new 4-cyl Camrys get.

Just keep in mind that by trading your LE for a TCH, you won't necessarily be saving money. Certainly not short-term and maybe never. No, you won't use as much gas. But you'll be paying considerably more up front for the TCH than you would probably spend on gas for the LE over the next few (several?) years.

I knew going into my TCH purchase that I was "saving gas" not "saving money". If I'd really wanted to save money, I would've kept my paid-off, near-perfect 4-cyl XLE that never gave me a moment's trouble and got pretty decent gas mileage for a car of that size. If you want to give yourself a treat and can handle it financially, both now and hopefully in the future, then go for it. Just don't kid yourself that this purchase will save you money.

 

So, what did you decide?