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New Honda Odyssey - Buy Outright or Finance

New Honda Odyssey - Buy Outright or Finance

Old Jan 15th 2014, 10:45 am
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Default New Honda Odyssey - Buy Outright or Finance

I've been researching car options ahead of our move to California in the summer, and have my heart set on a Honda Odyssey.

We had been planning to use International Autosource to finance the car, in order to help with building up a credit history. Unfortunately, Hondas aren't on their list of preferred suppliers, so we can't get their expat deal, although they could work something out with a Honda dealer once we have the visa etc all sorted.

So, my question is, is it really worth holding out for this, and hoping they come up with something not too outrageous, or would we be better off just paying for the car in cash and using other method to build up the credit history? We both have American Express cards, so will be able to transfer those, but that will be it.
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Old Jan 15th 2014, 11:02 am
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Default Re: New Honda Odyssey - Buy Outright or Finance

Originally Posted by Lucybell33 View Post
I've been researching car options ahead of our move to California in the summer, and have my heart set on a Honda Odyssey.

We had been planning to use International Autosource to finance the car, in order to help with building up a credit history. Unfortunately, Hondas aren't on their list of preferred suppliers, so we can't get their expat deal, although they could work something out with a Honda dealer once we have the visa etc all sorted.

So, my question is, is it really worth holding out for this, and hoping they come up with something not too outrageous, or would we be better off just paying for the car in cash and using other method to build up the credit history? We both have American Express cards, so will be able to transfer those, but that will be it.
If you have the cash to pay for it outright, I would buy it from a Honda dealer when you get here, talk to their finance guy and finance a small portion of it. A big deposit here is 20%. If you're putting down >50% you should have no problem financing it, even with limited credit history, and paying off a car loan will help your credit in a very short period of time.
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Old Jan 15th 2014, 11:08 am
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Default Re: New Honda Odyssey - Buy Outright or Finance

Originally Posted by Bink View Post
If you have the cash to pay for it outright, I would buy it from a Honda dealer when you get here, talk to their finance guy and finance a small portion of it. A big deposit here is 20%. If you're putting down >50% you should have no problem financing it, even with limited credit history, and paying off a car loan will help your credit in a very short period of time.
I hadn't thought of that - great idea, thanks! Would it matter how big the loan part was, in terms of credit building, e.g. would something as little as 10% (or around $5k) work as well as 50%?
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Old Jan 15th 2014, 11:23 am
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Default Re: New Honda Odyssey - Buy Outright or Finance

I don't really have an answer to the question, but I did want to say that we have a 2011 Odyssey that we bought last summer outright, and you really do save a lot of money buying a 2 year old car rather than a new one. I think we saved over $10k and nothing major has changed between the 2011 and 2013 design. It's a great car.

Also get the one with the built in DVD :-)
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Old Jan 15th 2014, 11:27 am
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Default Re: New Honda Odyssey - Buy Outright or Finance

Originally Posted by kins View Post
I don't really have an answer to the question, but I did want to say that we have a 2011 Odyssey that we bought last summer outright, and you really do save a lot of money buying a 2 year old car rather than a new one. I think we saved over $10k and nothing major has changed between the 2011 and 2013 design. It's a great car.

Also get the one with the built in DVD :-)
Thank you - that is a good tip, and I'll definitely take a look at nearly new as well as new. We will most certainly getting the built in DVD - just a shame they haven't moved up to Blu-ray yet!
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Old Jan 15th 2014, 4:40 pm
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Default Re: New Honda Odyssey - Buy Outright or Finance

If you've got cash to buy outright, get a finance deal from credit union or even at a pinch the dealer, as long as they don't have early pay out clause. Finance the whole thing and put down minimum they want.

Then pay as much of it off straight off, leaving a minimal sum to pay off over 12 months.

Job done, good bit of history built.

As for new v second hand, factor in your lack of credit history and driving history and how much that is going to affect your insurance rates and second hand will probably make much more sense. Especially in a warm, non-snow state.
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Old Jan 15th 2014, 4:57 pm
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Default Re: New Honda Odyssey - Buy Outright or Finance

The amount you finance shouldn't make a significant difference to build up your credit history and score as long as you make the payments on time.
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Old Jan 15th 2014, 5:22 pm
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Default Re: New Honda Odyssey - Buy Outright or Finance

Thank you very much for taking the time to respond. That's really helpful, especially the point about the impact on insurance premiums, which I hadn't considered (despite being an actuary)!
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Old Jan 15th 2014, 5:28 pm
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Default Re: New Honda Odyssey - Buy Outright or Finance

Originally Posted by Bob View Post
~

As for new v second hand, factor in your lack of credit history and driving history and how much that is going to affect your insurance rates and second hand will probably make much more sense. Especially in a warm, non-snow state.
Insurance rates are usually slightly higher for a secondhand vehicle over a new one. Plus you can get things like new car replacement and other options not offered on a used vehicle (plus, of course, the full warranty and possibly a servicing agreement).
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Old Jan 15th 2014, 5:32 pm
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Default Re: New Honda Odyssey - Buy Outright or Finance

Originally Posted by Guindalf View Post
Insurance rates are usually slightly higher for a secondhand vehicle over a new one. Plus you can get things like new car replacement and other options not offered on a used vehicle (plus, of course, the full warranty and possibly a servicing agreement).
Gah - confused now! Are insurance rates higher or lower for new vs used cars?? I must confess from a theoretical point of view, I'd expect them to be lower for new cars, as driver of new car likely to be more careful with shiny new toy, has all the latest security and safety features, etc. However, does that hold true in practice?
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Old Jan 15th 2014, 5:36 pm
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Default Re: New Honda Odyssey - Buy Outright or Finance

Originally Posted by Guindalf View Post
Insurance rates are usually slightly higher for a secondhand vehicle over a new one. Plus you can get things like new car replacement and other options not offered on a used vehicle (plus, of course, the full warranty and possibly a servicing agreement).
You can get all that on a 2 year old, dealer certified car with Honda, Audi and probably a few others.

Insurance rates will depend on location. Down my way, they would be cheaper because there would be bumper scuff expectations.
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Old Jan 15th 2014, 6:57 pm
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Default Re: New Honda Odyssey - Buy Outright or Finance

I can't speak for all locations, but insurance is generally higher on any used vehicle because there is no evidence of prior driving habits, therefore more chance of something going wrong and causing a collision - like brakes, tires, proper service, etc.

If you buy new, you KNOW that everything at least should be in working order - and, as I said, have the full warranty period available to you.

As a side note, the dealer will attempt to sell you an 'appearance package', which you should refuse - it's just extra dealer profit. If they insist that it's already on the car, refuse it and generally, they will remove it.

Also, make sure you DECLINE any offer of an extended warranty, which is also dealer profit - especially on a Honda!
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Old Jan 15th 2014, 7:09 pm
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Default Re: New Honda Odyssey - Buy Outright or Finance

Just did a quick comparison quote using Geico, and for the area we're planning on moving to, the used car came out a little cheaper: $888 vs $938 for six months "most popular" coverage.
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Old Jan 15th 2014, 7:12 pm
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Default Re: New Honda Odyssey - Buy Outright or Finance

Originally Posted by Guindalf View Post
I can't speak for all locations, but insurance is generally higher on any used vehicle because there is no evidence of prior driving habits, therefore more chance of something going wrong and causing a collision - like brakes, tires, proper service, etc.

If you buy new, you KNOW that everything at least should be in working order - and, as I said, have the full warranty period available to you.

As a side note, the dealer will attempt to sell you an 'appearance package', which you should refuse - it's just extra dealer profit. If they insist that it's already on the car, refuse it and generally, they will remove it.

Also, make sure you DECLINE any offer of an extended warranty, which is also dealer profit - especially on a Honda!
Thank you. I would prefer a new one overall, because then I can choose exactly the options I'd like. However, if it comes down to having to wait months for right new, vs picking up the right used off of the forecourt, I'll have to go with the latter to start with. Will investigate further when we're over in April.

Thanks all for your replies!
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Old Jan 15th 2014, 8:18 pm
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Default Re: New Honda Odyssey - Buy Outright or Finance

Originally Posted by Guindalf View Post
I can't speak for all locations, but insurance is generally higher on any used vehicle because there is no evidence of prior driving habits, therefore more chance of something going wrong and causing a collision - like brakes, tires, proper service, etc.
Well like I said, down my way, with certified pre-owns, that's not the case, but only as far as up to 2 years old, then as you say the rates go up, but not that much more so till they hit 50K miles for the better cars.

That said, down my way, a lot of insurance companies require the car getting taken for a visual inspection if it's 6 years old or more before the company provides insurance on it.
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