By doing your research and following these tips, you’ll be well-equipped to make a smart and informed vehicle purchase.
Q: My daughter is in second year university and has managed without a vehicle during the school year. She only needs one during the summer months when she’s working, so she and her brother are able to get by sharing my wife’s car. Unfortunately, toward the end of last summer, the car broke down and left her stranded. We had it towed to a shop, where we were advised that it needs about $2,500 worth of repairs. It has some other issues too, and we were already thinking about replacing it before this incident. That aside, my daughter now wants to buy her own car. I’m not the best with money, and I don’t want her to spend all the money her grandparents gave her as an early inheritance on a car. Do you have any tips I can share with her? ~Mark
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A: Buying a used car can be an overwhelming experience, particularly for those navigating the process for the first time. The stress is compounded by the fact that a vehicle is often the largest purchase someone makes before committing to a mortgage. Without adequate planning, it’s easy to feel lost among the countless options, potential pitfalls, and financial considerations. From setting a realistic budget and understanding the total cost of ownership, to inspecting the vehicle and negotiating the best deal, there are numerous crucial steps to outline in a car-buying plan. Here are some tips to keep in mind as you or your daughter start shopping.
Determine your budget
To make the cost of the car as comfortable as the driver’s seat, start by deciding how much you can afford to spend on a vehicle. This may involve researching industry reliability ratings, expected maintenance for specific models or years, and owner reports about dependability. Keep an eye on pricing as you do this research; it will be useful when considering the fair market value for cars you’re interested in. Doing thorough research ahead of time helps avoid falling for a cheap car that could cost more in repairs in the long run.
Ensuring you can manage the payments without stretching your finances too thin is crucial for a stress-free ownership experience. Let your budget guide you in deciding whether to buy a new or pre-owned vehicle, as there’s more to buying a car than just the sticker price. The total cost of ownership will significantly impact your budget and should account for ongoing expenses like insurance, maintenance, fuel, and repairs.
To calculate potential repair costs, depending on the age and condition of a vehicle, a realistic rule of thumb is $50 per tank of fuel. If you fill up your tank three times a month, plan to save about $150 toward repairs and maintenance. Factoring these expenses into your vehicle budget will give you a clearer picture of what you can truly afford and help you make a more informed decision.
Identify your needs
To stay focused and end up with a car that suits your needs, start by narrowing down your list of non-negotiable must-haves to streamline your car-shopping process. Think about what activities you will need your vehicle for most of the time and shop with those requirements in mind. Consider your daily commute, passenger and cargo space needs, and the climate and terrain you regularly encounter. For instance, a fuel-efficient car might be essential for long commutes, while all-wheel drive could be crucial for adventurous excursions into the mountains.
Next, prioritize features and assess your lifestyle. Safety features such as airbags, anti-lock brakes, and advanced technologies like blind-spot monitoring and lane assist should be at the top of your list. Additionally, consider fuel efficiency, technology, and comfort based on your preferences and driving habits. Reflect on your future plans, such as starting a family or changing commuting patterns, to ensure the car you choose aligns with both your current and future lifestyle. Don’t forget to take into account personal preferences like style and brand loyalty.
Finally, make a list and stay flexible. Shortlist car models that meet your criteria and compare their features, prices, and reviews. Test driving the shortlisted cars is a crucial step to understand their comfort, handling, and overall experience. Stay open-minded and be willing to adjust your list based on availability and test drive experiences. Sometimes, a car you hadn’t initially considered might turn out to be the perfect fit for your needs and preferences.
Shop for a vehicle
When buying a used car, check the vehicle history. A comprehensive vehicle history report will reveal if the car has been in any accidents, how many owners it has had, and its maintenance history. Additionally, verifying the Vehicle Identification Number (VIN) ensures the car’s history matches the seller’s claims. It’s less common for private sellers to provide a vehicle history report because of the cost involved. However, reputable dealerships and retailers typically include a report as part of their service to ensure transparency and trust.
Once the history checks out, inspecting and test driving the car are the next essential steps. Even if you’re knowledgeable about cars, having a professional mechanic inspect the vehicle can save you from unexpected repairs. If you’re buying a used electric vehicle, be sure to find a mechanic with qualifications and/or experience in electric vehicles. During the test drive, pay close attention to how the car handles, any unusual noises, and the overall comfort.
Finally, negotiation is a crucial part of the process. Use your research on market value and any issues found during the inspection to negotiate the price. Be aware of any rebates you might be eligible for, such as those for electric vehicles, or discounts associated with memberships or statuses you hold, like Costco or student discounts. Be polite but firm in your approach. Additionally, remember to negotiate any extra costs when buying from a dealer, such as documentation fees or extended warranty packages, as these can add up.
The bottom line on buying a new or pre-owned vehicle
By doing your research and following these tips, you’ll be well-equipped to make a smart and informed vehicle purchase. However, if you can’t find the vehicle you want or negotiate the price you can afford, be prepared to keep looking. In the meantime, if you plan to finance part of your purchase, live as if you’re already making a car payment by depositing the amount you’d be paying for a loan into a separate savings account. Just like test driving a car, you’re essentially test driving having a loan. This experience can either offer valuable financial insights or give your savings account a boost. The used car market can be tight, but a little patience will go a long way in finding the right car, truck, or SUV at a price you can afford.
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