Should We Buy a New Saturn?

Hey folks.

Our dealer just announced a new incentive to buy an 04 Saturn.
They'll give us 110% of our book value of our existing 2000 LS2
Saturn if we trade it in for an 04 Saturn, which will include
0% interest over 60 months. ( Negative equity on the existing
loan will be applied to the new loan only if it exceeds 110%)

My question is, we have 65K on the odometer, are outside of our
warranty range and average about 2k miles a month commuting.
We owe about $10k on the car, (I know I know, we financed after the
lease was up). Should we go ahead and get a newer L300 Saturn?

How much difference in ride, interior noise, safety is there between
the 2000 and the 2004? We're concerned that if we keep the current
Saturn, (it's the second one we've owned), it'll practically be worth
zero in a couple of years based on the miles we put on it.

Comments/suggestions much appreciated.






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Unless you are into collector cars, you will always lose money on an
automobile. You need to ask yourself which is more important to you -
minimizing cost of ownership or minimizing the the risk of breakdowns or
just driving a newer car. Once you decide which of these philosophies you
have, the answer to your question should become obvious. It is almost a
certainty that you will save the most money by running your current car into
the ground. If you bite on the new car, within a couple years it will only
be worth what yours is now and you will likely be out almost twice as much
money, but you will be protected by a warranty.

Dana

SNIP

We're concerned that if we keep the current

 

Well - you are a little upside-down on the current car - I bet you won't get
much more than 7000 for trade-in, so the new car is going to include an
extra $3k in the loan. I think the main differences between the 2000 and
the 2004 (aside from the cosmetic) are the standard hear curtain airbags and
the bigger gas tank (the 2001+ models have a 15.7gal tank rather than the
13.2 gal in the 2000's). Other than that, the engine is exactly the same
(same power rating and everything), cosmetically there have been a number of
changes (projector headlights (nice), updated interior (yuck), different
standard options, etc.

I haven't driven the new one, just our '01 L300, so I can't compare the
two - so I guess the question for you is whether the new car (+ warranty) is
worth the $3k penalty (or whatever the difference between what you owe and
the trade is) you will pay to get it. I would drive the new car and see
what you think!

 

You almost certainly have negative equity with a $10K loan,
and it likely exceeds the 110% limitation. It's too late now,
but what possessed you to buy it for so much money after
the lease was over? Saturns are great cars to lease because
the resale value is so poor, but bad cars to buy, for the same
reason.

Also, what is the price of the 2004 based on? Are they charging
MSRP, or is it a discounted price. Saturn has had endless big
incentives on the L series in the past, and this is likely to continue.

You'll be in the same position with the 2004 before you know
it--negative equity. It's a problem with cars that have high sale
prices and low resale value. If you were buying the L series new
then you'd get big discounts off MSRP, but I suspect that this deal
that they're offering is based on MSRP; they couldn't do it any
other way.

My thought is to forget about this deal. Pay off the 2000. Even in
three years it'll still be worth $1500-2000.