My wife Erica and I just purchased our first car recently, but it wasn’t out of choice, it was out of necessity. We were pretty content with the ’96 Honda Accord that had served it’s purpose over the past 6 years. The Accord was given to Erica by her parents when she was 16 so we never had any car payments besides the occasional repairs and fixes it required. Yes the driver-side window didn’t work, the air conditioner leaked water, and the entire car shook when it came to a stop, but it got us from point A to point B. At 138,000 miles it was still poised to squeak out another 70,000 until…
It was a beautiful Monday afternoon in early June. Erica’s sister just had her first baby the day before and we were just about to head over to the hospital when suddenly, the car wouldn’t start. “Rin-in-in-in-er,” it squalled as we tried desperately to get it to start. No matter how many times we tried, the car would not start. We called our insurance company and they sent over a guy to help us jump start the car. Problem solved…for the time being.
A few days later back in Pittsburgh, Erica was about to head to work when the car didn’t start again. To make a long story short, this began a daily trip to the mechanic to try and diagnose the problem. After three weeks of playing let’s-see-if-this-fixes-it, we still had no solutions and were still without a reliable car.
Unfortunately, its time had come. We had no choice but to buy another car. We were both really nervous about shopping for a car and finding the right one, especially in a time crunch. But as it turns out, a lot of the work we did to find the right car was done in the comfort of our home with only a laptop and patience.
Without doing any research about how to car shop, here is our own guide to finding the right car for you based on our experience. We received a lot of advice from friends and family and incorporated a little of our own millennial prowess to develop our own car buying process.
Select your budget
First thing you need to know before buying a car is how much you are able to spend on a car payment per month. If you read my post on how to plan your personal finances using the 50-30-20 rule, you’ll know that we save 30% of our income to use for big purchases. Erica and I both decided that we were comfortable splitting this category and using $300 for a car payment and saving the rest. We then used the following Bank Rate Auto Loan Calculator (widget embedded below) to play around with the interest rate and loan duration. You can expect to pay between 2 and 4% for a longer loan such as 60 months for a used car. To see what the average rate in your area is, use this other handy tool by Bank Rate.
Finding your top ten
Once you know your budget, you then need to know your criteria for picking a car. Start off with a few I’m-not-budging criteria; basically things that your new car has to have. We knew that we wanted a car that has all wheel drive to handle the Pittsburgh roads during the winter, and we wanted a hatchback or SUV style car with plenty of room for kids (hey we’re trying to plan long term here).
Next, you will need to select some criteria that you can be a little more flexible about. Our top criteria were price, number of miles, year of the model, brand, only one previous owner and distance from where we lived. We then set loose and searched Autotrader.com with our criteria and kept track of our choices with a simple excel sheet:
Asking someone you trust
Next, run your top ten list by someone you trust such as close friends or family who’ve had experience buying cars before. We emailed our list to both sets of our parents and they both sent back some really insightful tid bits.
Things to bring with you
When the big day comes to go visit the dealerships, make sure you are prepared by bringing the following with you:
- Proof of insurance – I made the big mistake of not bringing my proof of auto insurance card with me. It technically wasn’t my fault because I left it in the old car which at the time was locked up in the mechanic shop. Luckily for me I was able to call my insurance office and have them fax a copy of the insurance card to the dealership. Save yourself the hassle and just bring the card.
- Drivers license with correct address – Obviously you should bring your drivers license with you, but make sure the address on your ID is the same as the insurance card and any other documents you need to fill out. My license still had my parents’ address (where I hadn’t lived at for over 6 years) which was a big no-no apparently. So I had to change it through the DMV website at the dealership! Once again, save yourself the hassle and make sure this is all squared away ahead of time.
- Bank or credit union APR – If you know you will be able to secure a loan through your bank or credit union, be sure to have all the details with you including the APR (annual percentage rate) and the term length. You can then use this as a bargaining chip with the dealership who will most likely try to get you to finance through them. I was actually able to get a lower APR through the dealership than from my bank.
- KBB value – Kelly Blue Book is basically the go-to place to find out how much a car is worth. All you need to do is visit the site, plug in all the info about the car (make and model, year, mileage, zip code) and it determines a fair market price for the car. Dealerships are aware of the KBB value and usually price their inventory a little above the KBB value. You can use this info as a bargaining chip in your negotiations.
- Laptop or tablet – Information is key! If you need to take a beat and re-group, find a coffee shop nearby and plug in. It never hurts to be confident in knowing exactly what you are looking for.
- Mobile apps – Dealerships are also aware that information is key, thus they might not have complimentary wifi easily available for your disposal. We shall not be fooled! Before I stepped out the door, I downloaded two apps to arm me with even more infomunition (see what I did there?) – Kelly Blue Book app and Autotrader.com app. They can both be found in the Google Play store and the Apple App Store and can provide you with on the spot info about any car you may stumble upon.
- CarFax – This ties in with the mobile apps but is important enough to list separately. CarFax show you the history of a specific car by it’s VIN (vehicle identification number). You can find pretty much everything you need to know such as accident history, service and repair information, odometer readings, and structural damage. This info can be pulled off of the Autotrader.com app or from the CarFax site directly.
All in all, we had a very pleasant car buying experience. My parents were both surprised at how much the car buying experience has changed due to the widely accessible information that is out there. Most big dealerships (like the one we went to) know that the buyer is much more informed now a days, which leads to cars being priced more fairly, thus leaving out the whole haggling process.
We finally settled on a 2010 Nissan Rogue with only 23,000 miles on it! We paid a little more for the car than we budgeted, but were willing to invest a tad bit more money into a car that was hardly used (hopefully giving us longevity). We’re really excited to drive it across PA for a friend’s wedding in a couple weeks, and are sure we found the perfect car for us!
Have you ever bought a car before? Do you have any tips or suggestions? If so share in the comments below!