I believe car shopping is the one shopping trip you either love or loathe with no middle ground. I personally have purchased 8 vehicles in my lifetime with the most recent purchase being August, 2015. Of those 8, I independently of any other human being, negotiated all terms on 5 of them. My goal is to keep them for as long as fiscally possible—or 7 years, whichever comes first. I know I do not have to tell you that a lot of planning goes into purchasing a car so I will share with you 5 tidbits of information that through my experience has made this love or loathe transaction that much simpler.
Before you Head out on the Highway:
- Know how much car you can comfortably afford. Shop with your head not with your heart, unless you plan on living in your car. 😉 You most certainly do not want to be “car rich” and “cash poor“. Take into consideration it is not just the output of your monthly payment but the insurance costs as well as routine maintenance costs and unexpected repairs. I have attached my budget spreadsheet here to help you do the math. Your payment and all of the other costs associated must fit into your, I am just going to say it—Monthly Budget! Financial Spreadsheet
- Know your credit score before you even step one foot into any car showroom. A difference of only a few points can automatically put you into a higher interest rate. For a nominal fee you can check your credit score at myfico.com or check to see if your credit card provides one to you monthly for free. Once you know your score, check all available financing options to you in addition to the dealership. Credit Unions and banks are great sources of alternate financing. I have found it is a very competitive arena out there these days with financing options so choose the best one that works for you. If you want to brush up on what goes into your credit score, check out my article, It’s All About the FICO You Know.
- Know all about extended warranties. Of all the cars I have owned I have never bought the extended warranty until the very last one. There are two reasons for that. One, I had a good down payment and trade in so my monthly payment was below the budget I had set so the additional cost of financing the warranty was nil. Two, the technology that today’s cars contain and the costs associated with fixing them. When I was sitting with the finance person, I really listened to all of the options I had for extended warranties and what each one contained and covered. This was my 4th car I bought from this dealership and I have a trust relationship with them so based on our established relationship and their knowledge I based the warranties I purchased on the culmination of all the aspects. Trust is key but so is research, base your decisions on both. I won’t really be able to do a thorough cost-benefit analysis for you until the warranty period is up but I can tell you that purchasing the extended warranty has saved me approximately $500 in repairs in the six months I have had it. And unless you include a line in your monthly budget for car repairs, which are inevitably going to happen, an extended warranty already built into your payment might just be the right choice.
- Know when to walk away. I want to go back up to number 1 for a minute—shop with your head not with your heart. Go in with a list of your 5 MUST have options. Even today’s base models come with so many options it shouldn’t be hard to satisfy the 5 right off the bat. The trick is to not lose sight of those 5 and get caught up in the bells and whistles on some of the pricier models. Guilty as charged! A car that can parallel park itself, bring it on! Oh, that option is $5000 more, no thank you! If there is not a car on the lot that has at least 3 or 4 of your 5 must haves, walk away. Believe me, your vehicle is out there, unless you are in dire straights of needing a vehicle, walk away and take your time.
- Know when to walk back. The vehicle I ended up purchasing had the 4 of my 5 must haves. I initially walked away and kept looking for all 5. It was during this search and looking at several other vehicles that I realized my 4 out of 5, was the one for me. BUT I had to initially walk away to really be sure about it. I also took that time to research alternate options for the one option I was missing, which was built-in navigation, in case you were wondering. I actually found an alternative that I have come to like much more than I ever liked the built-in navigation that I had in my previous car and thought I “must have” on my next one. By taking my time and weighing my options I got my 5 out of 5 must haves. 😀 Happy Shopping!
My Dream Car-Don’t Judge Me 😀
Post Script: Women of the Know, Virginia and Robyn offer these additional tidbits to ease your car buying shopping experience.
Virginia: Stop the “BS” before it even starts. Use the element of surprise. When I walk into the showroom, salesmen think, look at this old lady—this should be easy and then I open my mouth and the look on their faces say it all. I tell them I am here to buy a car, these are the terms and at the first sign of “BS’ I am out of here. —Author’s Note: Good job Virginia!
Robyn: Do your research. The internet is a vast stream of knowledge. Of course be careful to discern your information. Just because it is on the WWW doesn’t mean it is true. Get a CARFAX it if is available. And #1 be happy with the decision you make, for me a car is a multi-year committment and who wants to get into their car everyday and be unhappy? —Author’s Note: Well said Robyn!
Kimberly
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