why wanting to get rid of the 370Z??

 

I agree with your suspicion that the OP may be strectching to make the payments work. That is the debt servicing capacity I refrenced as a relevant parameter. But my point would be that term is a symptom , not cause.

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Case in point:
You buy a car, put down some cash, and end up financing $27000. If you do that at 4.5% for 5 years, you are looking at a $503 a month. But say you looked at your budget and really only wanted to spend $400 a month. Voila, a 84 month note at 6.99% is only $407, and it fits neater into your budget. But if you pay the loan out, you paid $34200 for a $27000 car instead of $30100.
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Yes, but if inflation goes to some percent (say 6 or 7%) and you invested the money you didnt put toward payment then you basically break even , also by defering your purchase the future cost of the car will be adjusted by the inflation rate (when you buy in future). Your assumption again relies on the fact there would be no additional savings due to stretching the payment.
Sure I can pay my house of now, but that would be silly when my rate is fixed indefinitley @ 6% and I can deduct the mortgage. It's essentially 4.5% money. I believe the future cost of money will be much higher than 4.5% ; I remember when it was over 10%.
This is not to make the point of a car as an investment, which it's obviously not. It's about the cost of money and optimizing the use of the same.

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My point is that if you can only comfortably afford $407, you need to be financing $21,500 at 60 months max.

The OP is getting hosed. They are murdering him on the trade in offer, they are not giving him a good deal on the Evo, and they are stretching the loan out to infinity to make the payment try to hide those facts. Truth in lending on that deal is eye watering.
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You are probably right about the specific terms (trade-in, etc.) and I was not commenting on that. Your advice in general here is correct that it is not probably a good deal. I never said my point was practical

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The smartest guy I know right now has zero debt of any kind other than his home mortgage which he has been paying triple or more on every month the last couple of years. He will have the house paid off by the end of the year.[/QUOTE]

You may want to re-visit your friend's financial accumen. One should accumulate debt when it's below the future cost of money and reduce when it's more (ie lock in low fixed rate debt at historic lows and reduce debt or carry variable debt at high current rates). Paying down low rate (5-6%) mortgages is silly when the interest is deductible. A year from now when long rates are 6% you could just put the money in treauries and have risk free positive carry (after tax deductions). This is all subject to ones ability to service the debt (cash flow to debt service) as a prerequisite of course.

My friends would say that the "sinner sings loudest at church" or "do as I say not as I do", and in that respect I carry low debt and have paid down my car. But at these historic lows in rates it's not an ideal strategy.

Finally, if the OP needs to pay 7% for a loan when top tier rates are around 3-4% then what will be the OPs cost of money when best credit borrowers pay > 6% for 60 month loans (as I did in the 90's with top tier credit). It might well be double digits.

 

that's kind of crazy.. esp seeing as you most likely just got the 370z.. you're probably going to want to switch again within this timeframe.. be it the evo after this, the new this or new that...

 

To clarify it was 84 months. It was my mistake to buy the 370z, at time I asked my friends that have the 350z and went to forums. Now I really regret getting the 370z. I will be revisiting the dealership next Tuesday to see if I can haggle some more. If not, I am considering either trading my car for a used 08 Evo X or sell my 370z privately.

 

How does this make sense? 34,307 total??? So...

Money down plus trade = 23,000+5,000=28,000.
Total cost of Evo = 34,307

34,307-28,000=6,307.

You should be financing 6,307 on the car... 554 x 84mos does not equal 6,307. You're off by 40,000.

If you were to finance 6,307 @ 6.99% you'd be looking at a loan of 6747.

Unless... you're upside down on your Z. How much do you owe? We know they're giving you 23,000 but what's the remainded. The remainded should be tacked onto the 34,307. So you owe, say, an extra 10,000, then you'd be financing 17,446. Still, at 84mos you're looking at 207 a month.

You're getting screwed on that deal...

 

You also need to keep in mind you're not just paying your car payment. You're paying maintenance, gas (which is ever other day on daily driver Evo's), new tires when the stock ones wear out, mods (because it's irresistible), CAR INSURANCE!, licensing every year (expensive as hell in Cali), etc... get my drift? I'm paying almost $1,000 a month to drive my Evo...

 

The key is how much you owe on the 370, plain and simple.
Regardless, unless you have to have a 4 door, I don't think the 370 is a bad car. Just overpay it as much as you can until you can sell it for exactly what is worth. it might take a year or even two, but you won't get hosed that way.

Good luck whatever you decide, man.

 

Look, you need to renegotiate and tell us the exact numbers so we can help you. My philosophy is this. If you want it... take it! Granted, don't go out of budget, if you can afford then good. If you're completely upside down, don't do it. But based on the numbers you gave us, assuming ur upside down 10k, you should be able to afford it.

REMEMBER, the deal goes down in the finance office, not the show room or sales persons office. READ, READ, READ, the contract, it'll take 10 mins. If they rush you, somethings fishy, walk away. Get an insurance quote first. Evo might be cheaper, so you might balance out. You're payment might be 100 more, but your insurance might be 100 less, so you'd be balanced out.

 

so much numbers and rates and %%%% flying around this thread lol.

i say stick with your Z for a lil while and buy/trade at the end of the year. only because u have till the end of this year to make ur pick, save a lil $$$ and really decide and what you really want

 

I was paying 573 a month, the payments came pretty easy until my job took a dump! I would try to stay away from those payments, in this economy no ones safe and unemployment wont cover bills and that high of payment (TRUST ME)!

 

I feel you on that one brotha. I was afraid I'd loose my job since I'm into IT consulting. So I withheld all expenses for 7 months and paid off the car in those 7 months. Sure enough, I lost my job 6 months after I paid off and was jobless for almost an year. Glad I paid it off.

 

Here is the breakdown:

MSRP: $34,755.00
Sales Price: $33,000.00
Cash Down: $5,000.00
Total Trade: $23,000.00
Total Trade Net Allowance: -$7,324.47
APR: 6.99%
Term: 84 months
Monthly Payment: $554.28

Total Fee/Options: $327.25
Sales Tax: $980.00

Sale Subtotal: $35,324.47
Total Financed: $36,631.72
Finance Charge: $9,927.80
Deferred Price: $44,235.05
Unpaid Balance: $36,361.72

How does this sound?

 

Sounds like they are trying to murder you on the trade.
You can get a lot more than that if you sell it ourtright, or go to a Mitsu dealer that will give a fair deal.

Honestly, man, I was in a similar deal recently. Here is what I would do- Print out the South Coast Mitsubishi pricing, and see if anyone is willing to match it. But what you are really looking for, is a dealership network that has both Nissan and Mitsubishi. This way, they will give you the best deal on your trade, and you can push for a nice deal on your car.

Do not finance negative equity, because it will screw you bigtime on the Evo when you have a car that you owe $40k on that is only worth $29k. I've been there before, don't be that guy. Have patience and get it done right.

 

7k negative equity is too big of a pill to swallow.

 

You owe 30,300 on A 350 Z ? Isnt that what they cost new ? I'm sure you have good credit because 6.99 is a good rate for 84 mo. but unless you absolutely have to have the EVO you should prob stick with the Z.... As a rule of thumb if you have to do 84 mo to afford the payment your in over your head. You will def need gap ins. if you do it, they will only pay 120% of loan value so if you do total the car you will have to cover some of the loan out of pocket. Its a bad situation.... I sell cars and I hate to see you get stuck in this deal... If you do buy the car you WILL have to keep it for A LONG TIME.... judging by your past you will want something new in a few years and wont be able to get out of this car.....

Hope that helps