financing a car is like borrowing money for anything else. You have a down payment (or not), an interest rate (IIRC rates should be below 5% for a newer car..but this changes from year to year) and other qualities of a loan ("what will happen if you die during the payment perion ?" and "can I pay the loan off early without penalty?" among others.
How do you justify this ? often is a 'buisness/work' excuse - "I need a reliable car for work" + "I cant put money into making my existing car more reliable" = go to dealership and buy something.
If you only have one car, and it has stranded you a number of times, and have no one that can call 24x7 to help, then I can see this.
I know many young families that, due to child seat laws, are forced into a minivan or SUV becuase they have 3 children in child seats. (its the law...and you are a bad parent if you dont have the state-correct seat for your children based on age and weight
Very few cars sold in the last 10 years will fit 3 child seats abreast - so you need a 3rd row.
financial hawks will say never to finance a car - the lifespan of the asset is too short. Good for them
I dont know many people that have $13k-40k burning a hole in their pocket to buy a car outright but they are correct in that financing a car is not the best financial investment strategy. ALSO, if a car is financed, you MUST carry full coverage insurance - call your ins. co to quote that - it could be significant.
I love the TDI's also, but if you are looking for cheap transportation, they are not the way to go - unless you do foolish miles, the payback wont be there...at least not where I live where Diesel is $.50/gal more than RUG. You are welcome to buy a TDI becuase you want to, but dont delude yourself into thinking that you are saving a lot of money. You can do the math on this easily. I'm especially disenchanted by the fact that later model TDI's get worse mileage than the earleir ones...WTF VW (insert tea party arguement here)
The typical story is that people wander into a car dealership, agree to buy a car (insert car dealer sterotype here) and then talk to the 'financing person' - who gets a kickback from the local bank/credit union everytime he gives them a car loan. This doesnt mean that the local bank/credit union is doing a bad thing (CU loan rates and customer service are often very good or better than a large bank) but know that these are all games being played behind your back.
Ideally, you'd know what car you wanted (you do hang out on a car forum...), and know the price you want to pay for the vehicle you want (You've already looked this up online, cars.com and other dealer sites...). Stop by the dealer, find and drive the car, dictate your price (and maybe conditions like :"I need you guys to replace this broken plastic piece before delivery"), when the salesman balks, you walk out and leave him your real phone number.
If your offer was 'reasonable' He'll call you later that day or next day/next week/end of the month becuase he wants the sale. I went back and forth (over the phone) 3 times with a guy, and he eventaully gave into my price. Hey, he's a salesman, if my offer is in outer space, then he'll spend his time elsewhere (and wont call me back). If he doesnt, I'm welcome to look elsewhere for similar goods and try the process again...
Honda/Toyota dealers are less likely to deal (never bought one though), US automakers ALWAYS have wiggle room ("oh, we have a rebate for car buyers who are 24 years old and have blonde hair" lolz), as do used car dealerships.
Since many people think in terms of "monthly payments" - look for some online auto loan calculators, and the interest rate your bank would charge. My thumbrule is that $300/m for 3 years will get you $8k worth of car (approx.). Have either a total price or a monthly payment in mind before you go to the dealership - that way the salesman can do his wiggling to get you the payment you want.
Know that the bank/CU that the dealer is in bed with could get you a better interest rate than your regular bank. Dont be afraid of this unless you really dont like who they deal with.
Once you and the salesman agree on a price/payment, you need to sit through some "sign this, do you want floormats ? sign here to get temp plates, blah blah blah..." at the dealership. I havent found a way around this. For my new cars this was a 1-4 hour process (srsly?) not sure about a used car.
Note that my process wasnt completed in an afternoon. It could be though if the price negotiation worked smoothly. For your used machine, it could.
Thats a good start IIRC - I'm sure there will be lots more responses when I hit send.
-John