FRUGAL CAR BUYING TIPS

MOST OF US NEED TO PURCHASE A CAR AT SOME POINT

This is another topic that was suggested by a listener.  The actual topic suggestion was “how to buy a car for the first time”.  I decided to approach it a little more generally to include tips that could be used by a first-time car buyer. But also for anyone who might be needing to purchase a car. The woman who suggested this episode had shared advice that her dad had given her when buying their first house, “You have lived this long without this house, so you can live the rest of your life without it.”  The same logic can be applied to pretty much anything, and is definitely good advice to consider when making any large purchase, including a car.  “You have lived this long without this car, you can live the rest of your life without it!”

BUYING A CAR IS VERY EMOTIONAL

As frugal or level head as you think you are, you can still get caught up in the sales pitches. Shiny beautiful cars with all of the upgrades can be tempting. It takes effort to not allow these emotions to get us into a financial situation that we might regret.

PREPARE YOURSELF BEFORE YOU GO OUT

Know what your budget is before you go out looking for a car, and be committed to sticking to it.  Don’t let the salesman convince you that you can afford more.  They don’t have to deal with your financial consequences of purchasing more of a vehicle than you can afford! When considering your budget, don’t forget about the cost of insurance!  If you are replacing a car that you owned with a car you are paying cash for, and you are not increasing coverage this won’t really be an issue. But, if you are adding another car to your household, or you are increasing the coverage you definitely need to consider this increased cost in your budget.

If possible, purchase the car with cash.  If you have to finance the vehicle, you need to keep the focus on the price (not what do you want the monthly payment to be?).  They will stretch the payments out over a longer period of time so that it seems you can afford it.  The problem is that 7 years from now you could still be making payments on this car that isn’t quite as awesome anymore as it was when they sold it to you.

If you do have cash, consider purchasing directly from an individual. However, if the car has issues right away, you have little recourse. So, make sure you are comfortable that this person is honest (maybe they are mutual friends of someone you know). Shop and read reviews online before you head out to the car lots.

RESEARCH CAR BRANDS BEFORE YOU SHOP

Unless you are already brand loyal, you want to have an idea of the type of car you are looking for. Certain cars tend to have a reputation to require less maintenance and last a lot longer. You don’t want to be talked into buying a car that looks great, but has a bad reputation for reliability because you just didn’t really know. For anyone younger out there (and I guess adults too), please stay focused on reliability and not how cool the car looks!  It won’t look that cool if you are broken down on the side of the road.

DECIDE IF YOU WANT AN EXTENDED WARRANTY BEFORE YOU GET THERE

I personally do not enter into extended warranties because I have decided that I am ok with taking the risk that I might have an issue later on.  In my personal experience, had I got warranties on everything that offered them, especially cars, it would have cost me a lot more than the actual times I had to do repairs. When I do buy a car, I only buy cars that are known for reliability, so I don’t really feel too worried about an extended warranty.

This is a personal decision that you will need to make, and how comfortable you feel with taking a risk in this area. If you think you will want an extended warranty, you will need to consider this in your budget also. If you do not want an extended warranty – be prepared to hold your ground!  They will sell you hard on this, and you will need to be willing to stay firm and decline no matter how much they make you feel like you are so wrong for not taking this coverage.

INQUIRE ABOUT ADDED COSTS

Find out if there will be additional fees added to the price (most of us will have to pay taxes, registration, etc.), but some dealers add other fees too.  For example, if you are buying a “certified pre-owned” car, there can be fees for that.  They can add on thousands of dollars!

BUYING IN AN EMERGENCY SITUATION

Sometimes, we can get into a situation where our current car has broken down and is at the point where it is not worth the money to get the needed repairs. When something like this happens, unless we have another car that we can access, we are put under pressure to purchase a car right away (because we need to be able to get to where we need to go). Not only does this limit our choices, but it adds to the emotional aspect of making this decision.

We are not in a good frame of mind, because we really need the car ASAP. It is times like these that we really need to be careful. Getting ourselves into a purchase that we wouldn’t have normally made can easily occur. When you are purchasing a car immediately after another one died, you can really feel that need to majorly upgrade. You might be tempted to buy a car that you can’t afford so you won’t have this situation again.

RANDOM TIPS

It can be really easy to let yourself get caught up in buying a car out of your price range. An expensive car that is way out of your budget will not be a great choice in the long run. If they offer to show you cars that are out of your price range, nicely let them know you are not interested. You can so easily talk yourself into how you can make this work. It’s not worth it!

Reliability is most important. A car that starts up every time will make you much happier than a sunroof and heated seats. I purchased a Toyota Corolla about 14 years ago, it was the only car on the lot I could afford. Unfortunately for me, it had manual roll-up windows, manual locks, everything manual.  It was so opposite of fancy, it’s ridiculous.

However, I drove it an hour back and forth to work for over 10 years with never one problem.  I tried to trade it in when it was time for me to get another car. They basically wanted me to pay them to take it.  It had over 200,000 miles on it and was useless to the car dealer.  I gave the car to my son. Two years later he is still driving it back and forth to work and college!

Thanks so much for checking in! If you would like to hear the podcast version of this topic to check out Lola’s Frugal Life Podcast! Also, be sure to check out my other blog posts on this site!

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