Cars. Unless you live in a large urban center that has great public transit, you probably need one. But cars are the biggest financial black hole that exists. No other large purchase you make depreciates as quickly. Because of this, make a stupid choice when buying a car has the potential to derail you finances, at least for a while. I know. I made “the car mistake”.
I know we’re all frugal on here, or want to be, so with that in mind I thought I’d share some things I’ve learned the hard way about buying cars.
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Buy used - some makes and models can lose up to 40% of their value in the first 2 years. Buying new is like avoiding the sales rack and buying full price instead.
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Look for low mileage - this goes without saying as far as avoiding costly repairs, but it doubly important when thinking about warranty. Depending on the make, a car that’s 2-3 years old will still have warranty left.
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Research your buy - don’t just look for a car that looks nice. Just like you can’t judge a book by its cover, you can’t judge a car’s quality by hue it looks. Researching different models will tell you if there are chronic issues that you need to avoid. It will also reveal some diamonds in the rough!
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Ask your friends - don’t discount the power of personal experience. Oftentimes people will rave about or revile certain vehicles. Don’t put too much stick in one-off experiences but pay attention to patterns. For example, our friends rave about the Honda Odyssey minivan. I’m not a huge van guy, but their positive experiences definitely have me thinking.
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Stick to your budget - whenever I go looking for a vehicle, it always seems like the one I really want is just a bit more expensive than what I have. This isn’t a coincidence. It’s part of our psychology. We are always wanting just a bit more than we can afford. Don’t fall victim to this. Set a budget a stick to it.
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Avoid dealerships- can dealers don’t make much on new cars. The margins are too small. Used cars are a different story. This is where they make their money by gouging people on trade-ins and then selling “certified” used cars at higher than normal prices. You can “certify your own car with a trained mechanic as we’ll see in a minute. Instead, stick with private sales. Not only will you avoid the upsell and taxes and fees dealerships charge, you want have to talk to used car salespeople, always a bonus!!
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Test drive the heck out of it - Dint just take the vehicle for a spin around the block. Tell the seller you’ll be back in 30 minutes or so and put it through it’s paces. Be sure to take it on the highway and on some rougher roads. Don’t take it easy. Push it hard. You want to test the acceleration, cornering and hard braking. And keep the radio and AC/heat off while you’re driving. You want to be able to hear any noises that may be drowned out by the radio.
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Get your vehicle inspected- Ok, it was less than a minute. Rather than getting ripped of at a dealership, get your car inspected by a reputable mechanic. If you’re not sure where to find one, ask your friends where they go or check out online reviews.
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Learn the history - Take the inspection to the next level by pulling the history of the car. Get a CarFax or similar service to check out if the vehicle has been in any accidents or has any liens on it. This relatively inexpensive report can save you thousands.
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Drive a hard bargain - stick with your number and be prepared to walk away if you don’t get it. With all the research you’ve done, you’ll know what’s fair. Start about $500 under what you want to pay and give yourself some wiggle room to negotiate. If they won’t budge, push for them to throw in things like winter tires.
Use these tips to rock your next car purchase and set yourself up to drive with the peace of knowing you got a great vehicle at a great price!
January 19, 2019 at 11:26AM
