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First Car
TKid
Registered User regular
Registered User regular
So, before too much longer I will have the funds to purchase my first car. To clarify, my mother passed away in 2005 and the probate is (finally) just about to close. Once we sell her house the money will be divided evenly between my sister and I. If the house sells for the full amount it was appraised for, I stand to receive approximately $27,000. I've never owned a car and I'm 21 years old. I figure that this is a good investment and this will probably be the only time for a long time that I'll have to money to do this.
I've done some research and I'm torn between a 2007 Honda Civic and a 2007 Scion xB. I'm open to other recommendations, but I want a car that will last and will require very little maintenance as I am completely retarded when it comes to cars and too broke to really afford a lot of mechanic work. I realize that I will not be able to make any real decisions until I actually test drive the vehicles, but I want a good idea of what I'm looking for before I go to a dealership.
On the subject of test drives: When one is test driving, what should they look for? What're some good questions to throw at the salesperson? What information should I keep and with hold from a salesperson? Are there any tips or tricks to getting a better deal from a dealership? Is it better to buy a car directly off a car lot or order the car custom from the manufacturer?
As you can see, I've got a lot of questions about this and any help/advice you can offer would be awesome. I'll be around every few hours to address requests for information that I may have neglected to give when writing this post.
Thanks!
I've done some research and I'm torn between a 2007 Honda Civic and a 2007 Scion xB. I'm open to other recommendations, but I want a car that will last and will require very little maintenance as I am completely retarded when it comes to cars and too broke to really afford a lot of mechanic work. I realize that I will not be able to make any real decisions until I actually test drive the vehicles, but I want a good idea of what I'm looking for before I go to a dealership.
On the subject of test drives: When one is test driving, what should they look for? What're some good questions to throw at the salesperson? What information should I keep and with hold from a salesperson? Are there any tips or tricks to getting a better deal from a dealership? Is it better to buy a car directly off a car lot or order the car custom from the manufacturer?
As you can see, I've got a lot of questions about this and any help/advice you can offer would be awesome. I'll be around every few hours to address requests for information that I may have neglected to give when writing this post.
Thanks!
TKid on
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They depreciate the instant they're purchased, and they are not likely to increase in value.
My question would be a general one:
Do you really need a new car?
Gas is expensive, upkeep (even on a civic) still costs money, insurance is expensive, accidents are expensive, etc.
I can understand wanting a new car with that cash... but it seems if you're already 21 (and you don't have a career/school change here that warrants a new car) then you're using public transportation or foot-power.
If you NEED a reliable vehicle for work/school/family, then by all means get one.
Otherwise, i'd say toss that chunk of change into the bank, and let it soak some interest until you really need it.
Putting that money towards your existing debt (if any), your education, a first home, or your own business someday would be a much smarter use of the money (and might feel like a more "profound" use of your inheritance).
That said, I agree that the best thing you can do with a large chunk of change is invest it, assuming that you don't really need a car. If you really do need a car because of some imminent life-changing thing on the horizon, I'd go with a Civic given those two choices. They are really deserving of their reputation as being one of the most reliable, easiest to maintain cars around. As with any product, they have up years and down years, but by and large, they're the most consistently good buys in their class, or any other. They should be given a Lifetime Achievement Award for durability.
The difference in price between buying online and buying at a dealership is often very small; the main difference is that dealerships will try to sneak in the markups and hide the fees (seriously, "destination charge"? Why not just "arbitrary bullshit markup"?), whereas a website will have no choice but to lay it all out in front of you. For someone who's in your position (never owned a car, probably not much credit built up), I wouldn't expect to get a deal from a dealership, either in the retail price or the financing terms -- especially when they realize that you really need a car and you don't even have one currently. It's not like you can act nonchalant and uninterested in their deal when you don't even have a car to drive off in. :P
Still, I'd suggest going to a lot, finding a car that you like, saying "no thanks" and then going back home and punching the specs up on the website. If the website is cheaper, go back to the dealer and tell them so. They might give you a better deal, but more likely they'll just spout off some stuff about "oh the website doesn't include this fee and that surcharge; you'll actually be paying more with them". Don't let them trick you into thinking ZOMG I HAVE TO GET THIS NOW OR IT'LL BE TOO LATE.
On the test drive front, a lot of folks nowadays don't even bother coming with you. If they have some preliminary credit info on you and/or a copy of your driver's license, they'll let you take it for a spin by yourself. Honestly, I don't believe test drives are of much use to the average buyer beyond inspecting the gauges and instruments and getting a general feel for the interior; unless you want to compare a Corvette to a Viper, what does a few laps around the neighborhood show you? Stick with the more mundane stuff like, is it roomy enough? Does it feel cheap or flimsy?
As for questions, make sure you find out how long the warranty is and what it covers. Honda and Toyota both have pretty good warranties; you should be covered for just about anything that breaks (not as a result of an accident or your own stupidity, of course) for 3 years. Most of the other stuff (safety ratings, longevity, performance, etc.) can be looked up online or in Consumer Reports and who knows if the salesperson's going to give you an accurate answer anyway.
Devil's Advocate: I agree that a better investment of the money would be as a down payment on a house... especially since Oklahoma hasn't been hit by the housing slump and growth estimates here look good for the next 2 years.
Then again, no one walks or uses public transport in Oklahoma. Everyone drives everywhere. Hell, even our neighbors drive to the neighborhood pool because they're too lazy for the 500 foot walk to the pool. So maybe a car is necessary.
The only advice as far as the process is concerned is that you should take multiple test drives. You can never take enough. And take test drives in cars you're even just barely interested in. You never know. Tell the salesperson you've got it narrowed down to three cars (don't tell them your other options) and that you really need to drive it again to help your decision process. I was forced to buy my current car on a limited timetable in 2004 and my only real regret is that I didn't have enough time to test drive the car enough (in different conditions... i.e sunny and rainy, highway and local streets). Above all, don't let them pressure you into a choice after one test drive.
I'm not telling you to be a dick. A lot of these people are very nice and pleasant, pretty low-pressure, but they're still inevitably selling the car at a markup that they can afford to cut back on if they really need to move product. You can be the same way: Show up in decent clothes, with a somewhat recent shave and haricut, be friendly, polite, smile a lot... and just tell them that their offers aren't good enough. No need to get all pissed off or say "I know you fuckers are lying!" Just smile and say, "sorry, that's a good chunk more than I planned to spend."
HIM: "Well that's unfortunate, but did you know I only make $150 for each car I sell? It's a really good price."
YOU: (pleasant smile) "I believe you, I just don't see me paying this much per month. I'll check some other places."
HIM: "But look at this picture of my family on my desk. I got mouths to feed!" (OK, he won't say that, but come on, why is it facing you and not him?)
YOU: "Well, my lunch hour is almost up. Thanks for your help, but I need to get back to work/class/whatever."
Again: No reason not to be pleasant and polite, but don't ever express interest in the rates you're quoted. Don't act like you can 'beat' the system (because you really can't); just shrug and say "not for me, I guess". More often than not if you show some initial interest in the car and then leave, you'll get a call back in a week or so from the dealership.
HIM: "So, did you find a car you liked?"
YOU: "No, I'm still looking."
HIM: "Well, what was holding you back from the Civic? Maybe we can help you out."
YOU: "Honestly, it looks like a good car, but the price I was quoted was higher than my budget allows. Really, the only thing you could do to help me out at this point would be to come down on the price. I understand if you can't do that, though." (cross fingers)
HIM: "Well, I'll have to talk with the sales director here, but we may be able to work something out and bump that monthly payment down for you."
Or...
"Yeah, I checked and we just can't go any lower. I really fought for it, but my managers won't let me cut the deal."
YOU: "Well, thanks anyway." (click)
I know, it's a bunch of bullshit. If you're willing to put up with it over the course of several days, possibly weeks, you can get a good deal (especially at the end of a model year when dealers are trying to clear out their inventories). Most likely, though, you'll find it more worth your time and energy to go online and get a deal that's almost as good, with minimal hassle.
Buy a Honda, a used Honda, for no more than $10,000. Set aside about $2,000 for possible/immediate maintenance and repairs. (These are generous estimates, chances are you won't need to spend 10,000 to get a really nice and near new Honda and chances are you won't need to do any fixing up approaching anywhere near 2,000; but I'd just play it safe and round over the figures) and take the rest and talk to a financial professional about the best possible way to invest the money.
I think the worst thing you could do right now would be to blow all of the money at once. Properly invested this money can pay for a lot of things down the road (Kids' college fund, down payment on a house, paying off student loans, wedding) and will be making money for you.
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Just sayin'. If you're 110% positive that you'll have a reliable source of income and enough left over to fall back on, some people (not necessarily me) would advise paying cash for any car, new or used, that you'd otherwise have financed.
In response to the suggestion of purchasing a home: I have absolutely no intention of staying in this worthless town any longer than is absolutely necessary. The money that is left over after the car/tag/tax etc is paid for will go into a CD to assist with a down payment on a new place far away from here and as funds to live on until I can get settled.
I've heard nothing but great about Honda's and admittedly the only reason I was heavily leaning towards the Scion was for aesthetics. Scions are supposed to be great cars as well, though, as Toyota owns the company. I'll probably go with the Honda in the end.
Thanks for the suggestions in dealing with the salespeople. I've heard they can be nothing short of absolute pushy nightmares and I'm terrified of getting bullied or harassed into a deal that looks great on the outside but was actually a rip-off.
The best advice about test drives if you're buying brand new, is just to see if you feel comfortable driving the car. You'll already know whether it's a good one or not by previous research. If used, make sure you check the oil, check for leaks, make sure it hasn't been in accidents (especially front end accidents), listen to it idle at stops and make sure the sounds are good and consistent - no sputtering.
I would also recommend looking to spend no more than half your money out the door. You're still going to have to pay for insurance, gas, and maintenance and if you plan to use that money for a new living situation, you're going to want it to be available. Oh and if you can get a good deal on the warantee, go for it. Think of it as paying for your maitanence costs upfront.
I just bought my first car (I'm 24), so I'll throw a couple things I learned in (I got a 2007 mazda 3, which I absolutely love... I can't say anything about reliability yet (though it's like 95% made in japan, and it's gotten good reviews so far, but the model's only 3 years or so old), but I thought it looked/felt/drove a lot nicer than the civic, and the cost is pretty close to the same, so I'd highly recommend taking a look at it just for the hell of it):
1) Absolutely get internet quotes for the cars you're interested in. For one, the rates were WAY lower than if you walk into the dealership and start talking about prices. I'd also be shocked if there aren't multiple dealerships within a reasonable distance from you, so you can play them against each other a little bit... but the internet quotes I got were all pretty close to one another (and were usually right around the rates you'd get for being a Costco/BJ's/etc member, though you could go around and get those quotes as well if you're a member)
2) It'll be a lot easier if you pay cash, since at 21 you're pretty much going to get a shitty loan rate regardless of your credit... I was able to get 0%, which works out better, but that's only because I have credit going back 6 years. You should see how much you could put on a credit card for some free points though... usually it's only up to like 3k, but you never know
3) Like others have said, don't believe their "you have to do it right now to get XX deal"... it MAY be true that there aren't all that many 2007's left, so you may have to move somewhat quickly if you really want a particular color/feature set (i.e., a car that doesn't have a stupid $800 cd changer), but when I was shopping it was a constant stream of "the 0% financing offer is only good this week, so you have to hurry!", and then when I decide to think it over, then all of a sudden they learn that it's extended through next week
Yeah, I didn't mean to make it seem like they're going to be mean about it, but like anything else on commission, if you're willing to pay $3000 more for the car, they're not going to go out of their way to take less of your money. All of these places do want you to be happy about your purchase, though (the dealership i got mine from seemed to be insanely crazy about me giving them a perfect rating on mazda's survey), so I doubt you'll leave feeling bad about it.
(I have no idea if used car dealers are still as bad as rumored, though I doubt that too)
My general impression was if you start out with internet quotes / costco rate / etc etc, you're already pretty much at the lower end of what you're going to get with any amount of haggling, so regardless of what happens you won't have gotten totally screwed.
Also, about the tactics of used car dealers, I think you may take some chances with Tony's Used Car Emporium, but the OP should keep in mind that most 'new car' dealerships have a used car selection too (mostly other folks' trades). So if you can put up with the dealership's sales staff, you can try to shop used through them as well.
Nissan, Toyota, or Honda. Anything from those three would be a great choice. I've also heard good things about Mazda and Mitsubishi in terms of value/reliability.
If you want to get a steal of a deal, get a 2002+ Hyundai Elantra. They completely turned about face in terms of quality around 2000, and since 2002 have been consistently making reliable, cheap vehicles with phenomenal warranties. I wouldn't recommend the Accent because even after reliability improved they really didn't re-think the design too much until the 2007 model year. A 2003-2006 Elantra will be barely broken in, and you should be able to either get the balance of the original warranty or a comparable warranty if you buy one used at a Hyundai dealership. You'll get a really nice set of options at a bargain price.
CUZ THERE'S SOMETHING IN THE MIDDLE AND IT'S GIVING ME A RASH
The benefits of buying certified: you get the manufacturer warranty, which is usually more comprehensive and less annoying to deal with than a third-party warranty. You have a shot at getting manufacturer financing, which often have very nice interest rates. (I have a friend who pays 1% APR on her certified used VW.) And they have been thoroughly inspected by the certification program, so you're unlikely to get a lemon.
The drawbacks? It's often hard to find a specific make, model, color, and trim certified. If you have your heart set on, say, a black Honda Civic EX, you're going to have a hard time finding it and you might have to settle for a different color and trim. It's especially hard to find the high-performance and upper-end trims as certified used, because people who buy those tend not to trade them back in within the first few years.
the "no true scotch man" fallacy.
2) You can get a significantly more lavish used car for way less money. These days, a moderately equipped full size sedan will run you 20-25k. This is utterly ridiculous. You can find a car 2-4 years old, with a better load out, for 75% of that price or less.
I personally recommend Saturn's. I've had two and I find them to be particularly underrated vehicles. However, do your research on any model you intend to purchase, my most recent one is 7 years old, they may have changed quite a bit since then.