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Car buying tips (first timer)
Xobyte
Registered User regular
Registered User regular
I've been driving the same little tin can my parents bought me nearly 14 years ago now. It's time to put this thing to rest in a scrap yard and buy a new vehicle. On the plus side, I got a lot of use out of that car over the years. On the negative side, I'm 34-years-old, and have absolutely zero experience buying cars/negotiating car loans/any of that crap.
I'll have about $13,000 saved up by the end up next month when I intend to buy. I could conceivably keep saving up for 6-8 more months (about $11,000 more) and just buy the thing outright, but I'm not sure the current car will last that long, so I'd rather just get it now and pay a little bit of interest with the intention of still paying it off by the end of the year.
I'd appreciate any tips people can provide for someone going through this process for the first time. Barring/in addition to that, are there web sites that I can just sit down and study that will give me a load of good resources in the month or so before I'm ready to buy? I found a website www.carbuyingtips.com in my bookmarks that looks like I tucked away years ago, but I don't remember where or when I got it, so I have no idea how reliable it is.
I'll have about $13,000 saved up by the end up next month when I intend to buy. I could conceivably keep saving up for 6-8 more months (about $11,000 more) and just buy the thing outright, but I'm not sure the current car will last that long, so I'd rather just get it now and pay a little bit of interest with the intention of still paying it off by the end of the year.
I'd appreciate any tips people can provide for someone going through this process for the first time. Barring/in addition to that, are there web sites that I can just sit down and study that will give me a load of good resources in the month or so before I'm ready to buy? I found a website www.carbuyingtips.com in my bookmarks that looks like I tucked away years ago, but I don't remember where or when I got it, so I have no idea how reliable it is.
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Have an idea of what you want before you go. Feel free to test drive different cars, but I feel it's best to just find what you want on their website and go look at it. I also personally prefer certified pre-owned cars over new just because of the huge depreciation of cars. This is purely a personal decision, though.
The best thing you can do is have financing already before you even go. Also, have an idea of what your credit score is. If you have financing, you can just focus on the price of the car, and if your credit is good the dealer will try to match or beat your financing to get you in theirs, sometimes getting you an even better deal. Don't even talk monthly payments with them. Focus on purchase price and interest rate, the rest will fall in line.
Since you most likely won't be getting a large loan, I would get it as short of a term as you can afford the monthly payments on. Alternatively, feel free to take a longer term and just pay more on it per month than required so you have some room if you have a bad month, but you'll still pay it off sooner.
You'll be able to talk them down from their list price somewhat, but they'll only go so far. Having prices of the same or similar cars from other nearby dealerships will help a lot with this. Most places will try to match. See if there's a town 50 miles or so away that has cars cheaper than you're seeing at your local dealership.
Don't hesitate to walk away if you feel you aren't being given a good deal or that they're trying to take advantage of you. Having financing and your credit score helps immensely with this since you aren't at their mercy. You'll probably not want to accept their first offer. Be hesitant and see what else they can do. I think I ended up taking the third offer on my most recent purchase once it was in line with what I wanted.
Financing wise, the web site I put up earlier also mentioned having that squared away before. I've got a buddy that does loans for Chase that I'm going to grab a beer with next week and get some info from him. Regardless of what he says, it sounds like getting that remaining $11,000 from the dealer should be a last resort.
If you go new look up how much those cars are selling in your area for. I've used Edmund's True Price thingy but their are other services as well. Make yourself a disposable email address and solicit quotes from every dealer remotely near. You may (emphasize may) want to stay local but being able to say "I've got a quote x dollar lower for the same thing. What am I paying you more for?" is a big confidence boost. Be aware they will hound you once they've got an address. It'd be foolish to give them a real one.
The only real advantage to financing through the dealer would be if your credit is good enough that you qualify for a 0% financing-type promo deal (which you're obviously not going to get from a credit union)
I looked at a few cars at some place and couldn't afford them. I told the salesman as much and left. Every week for 2 months he'd call me with a lower price.
Eventually I bought a car from some other place that was desperate to get it off the lot.
FYI, prices for new cars go down when new models hit the lot (I think around october or november?).
Yeah, catching a good deal from a previous model year can, in some cases, put new almost on par with certified used. Particularly if you can get better financing on the new one, reducing how much you actually pay over the course of the loan.
You can get a bit of a bump, if you're patient, selling a single-owner car with full maintenance records as well.
Everything else said is gold. I wouldn't call dealer financing a "last resort," per se, but you definitely want to walk in with your own financing if possible to establish a negotiating position. If they beat it, great. If not, stick with yours.
http://www.fallout3nexus.com/downloads/file.php?id=16534
1) You probably will buy new since the CX-5 is a relatively new model of car and there will be few on the used market, and even if you do find one, the first year of a production run is generally not a great buy since it takes then 1-2 years to iron out the whoopsies
2) With that much money in your pocket you hold all cards. Not sure if Chase does auto loans or not though and they may be tentative on giving you a loan without the target car in mind since you have seem to have little or no credit to speak of. You should be able to make demands on price of the car since you have significant buying power with half the sticker price in cash
3) The trope of not working with the dealer finance guy, in my experience, is both tired and wrong. Here's what most dealer finance guys do: they put your application in a computer and let fifteen different banks bid on the interest rate, and then they pick the lowest rate. End of summary. What you don't want is to go with *factory financing* which is the financing of last resort for dealers.
but anyway, I would aim for a new CX-5 and you should be holding out for an APR in single digits (not sure on your credit history, but a new car buyer in this economy can and should expect between 3 and 7%, you might be penalized as a first timer though)
I did just run my credit score, and I'm sitting at 710 which is honestly a lot better than I expected. I don't have a ton of credit card debt, but I do have just shy of $40,000 in student loans that I started paying on last year. I'm guessing those are common enough that they're weighted differently against me though. And what I'm reading is any score above 680 should qualify me for a good, low APR, so that's promising. Also, I remembered that when my wife bought her car a few years ago, I cosigned on the $4000 we needed to loan for that. My credit is better than hers though, so I may have been the primary loanee. I guess "first timer" isn't actually accurate, though we had to go out and buy in a hurry since her last car had utterly died and wasn't worth repairing any longer. Either way, this is the first time I've had plenty of time to shop around and prepare and make sure I get a good deal.
I'm planning on going and taking a test drive on my next day off on Wednesday. Since I won't be able to buy until next month, period, I figure this is a good way to flat out remove any temptation to buy that same day. As for similar vehicles in the class, I've looked at Honda's, Subaru's and Toyota's offerings. Most of them are either more expensive or get worse gas mileage. Or the features are nearly identical, in which case the design of the Mazda just appeals to me more. I'll keep looking, but I've been narrowing down to the Mazda for the last six months, so I'm pretty decided on that one.
About financing - your credit score is pretty good - you'll probably qualify for the the best offers at a dealer when buying new. A quick look online shows that Mazda now gives you 0.9% financing - that's *almost* free money. Definitely get pre-approved for something at your bank (just in case the dealer can't get you a good rate), but the buying process should be nearly painless for you.
Now finally - you're set on the Mazda - but before you dismiss the others, TEST DRIVE THEM ALL. Seriously. The reason the newest Mazdas get such good gas mileage is that they have less powerful engines - and you might be more comfortable with a faster car. Or the Mazda may be just perfect. Also - good design usually results in reduced visibility (small windows look cool
I got my credit score from a couple more places, and it's highest at Experian (724) and lowest at Equifax (664), though I notice they're all using my income from 2012, and haven't updated to my 2013 income which was double. Taxes were just filed last week, so hopefully by the time I actually apply for the loan, those numbers should improve.
You'll definitely want to get that Equifax score settled because lenders tend to use the lowest one.
We found this out when we were looking at a new one about a month ago from the chillest car salesman I've ever talked to. Naturally, the wife decided later that she wants new kitchen counters first, so we don't get to take advantage... so I pass this information onto you, that you may use it in our stead.
Just test drive all the cars you can, regardless of model/brand/make. Even though you may be set on a Mazda, you might end up liking something else more, or you may not like the Mazda as much.
I also think it's wise to do some research on the "expected" costs for maintenance to see how much you'd be putting into the car and what tends to wear more on it. Of course, it's just expected costs, but it's something else to think about.
When you're at the dealership, it's the salesperson's job to get you to commit on the spot. You do not have to commit, as you're the customer, you call the shots on what you will purchase. If you're not comfortable, then do the research/questions online. Most large dealerships have online questionnaires/service if you rather go this route.
Looking for Edith Finch Pin!
you'll have a good deal
My dealership said they use the lowest of the 3, so it apparently varies.
This is a good example of where dealers have discretion and why you shop around a bit.
If you get excluded from the .9% financing at one dealer I'd go talk with another one. Generally they have more latitude than they really want to let on.
a) Ex demo brand new. You save bunch on this. It's essentially a new car with a few hundred kilometres on it from being test driven as a demo.
b) Last year's model. You get another chunk off on this, because a lot of people always want the shiniest.
c) Three year's old preowned. A lot of car leases are typically three years long, particularly corporate leases. This means that the market is typically quite saturated with three year old cars for which the lease has expired and the original owner is going to buy another new car. The market value of the car lost per year has peaked during these three years, and is the best time to get a relatively new car.
Honda CR-V
Mazda CX-5
Nissan Rogue & Juke
Toyota RAV4
Subaru Forester & XV Crosstrek
Jeep Cherokee
Ford Escape
Hyundai Tucson
Kia Sportage
Buick Encore
I am excited to hear the conclusion.
Good advice up in this thread for future readers.
Ha, what? Crosstrek's are everywhere here in New England. Crosstrek is decent if you need an Impreza with more ground clearance, but that's basically all it is.
http://www.subaru.com/company/news/
Sales are increasing on it.
What I've narrowed down to is:
CX-5 - I actually bookended my test driving with this, since it was my first choice and I figured it would be easier to compare if I both started and ended with it. The first drive of the day, the seat back was kind of uncomfortable, but the cabin was spacious and it drove well with good handing. The second drive, the seat back didn't seem to have the same issue, so I'm not sure if it was just more broken in or what.
CR-V - Roomy interior and good handling. Big plus is it felt like there was a good spot for every limb to comfortably rest. Perhaps an unusual positive, but I'm a big, broad shouldered guy, and I've been driving a Chevy Metro for the last 14 years, so comfort is a major factor for me here. Negative is I do not like the body styling. I know that shouldn't be a huge factor, which is why this is still a contender. But I'm the kind of person that drives his car for a long-ass time, so it's important that I not compromise on what I want with this purchase, since I'll be driving it for the next decade most likely. The Honda is probably at the bottom of my list.
RAV4 - This is the surprise. The Toyota was honestly an afterthought leaving the house today. It was the final drive before the second CX-5 outing, and I almost didn't take it since I was getting pretty wiped by that point, but goddamn I'm glad I did. The interior is a little on the plain side, but I may actually prefer that. Handling and acceleration was nice and smooth, and it probably had the least cabin noise of the three. Comfortable to sit in and drive for me. And the body styling is just flashy enough to appeal to me. For starting the day as an afterthought, the RAV4 is now competing for top spot with the CX-5.
Next step is to get my financing in order in a week or two. After that, I'll probably do another afternoon of test driving the three finalists with my wife so she can contribute her thoughts, and get it down to a single vehicle. Then some online quotes for that choice, before going and making the purchase.
they're unlikely to sell 2014's below invoice in April if demand is average to high
CR-V - .9% financing right now
CX-5 - .9% financing as well
Rav4 - 1.9% financing - Toyota's been in a bit of a lull, so you can likely beat them up on price pretty hard.
It was just a lot smaller than I was looking for. I actually didn't even end up driving it. The cabin looked like it would be fine, but it just didn't have the cargo space that I wanted, so I didn't bother. Similar with the Crosstrek, since that was just the Impreza with better clearance. The Rogue had the cargo space, but the cabin felt really crowded and cramped compared to everything else I was trying.
Just a comment in favor of the CRV, I'm currently driving a 2002 model with over 200,000 miles in it and have yet to have any major issues with it.