All about the challenges of Midlife Finance

Buying A Car: The Basics

plymount duster buy new careShe was my first love.

Others listened to her cough and choke on frosty mornings. They said she was ugly. (Not everyone has a bright blue body and cracked accessories!) They made fun of her eccentric ways, and said she would come to no good end.

But I knew better. I loved my Plymouth Duster.

The strange thing about this ‘first car?’ It may not have gotten terrific mileage. It was clunky and rarely turned easily on anything, let alone a dime. But that awkward vehicle was a champ through years of traipsing between work and school in all sorts of weather. It even survived a fender-bender from sliding through an icebound stop sign. And eventually it passed on to my brother. (Who put it through more years of use and abuse.)

What kind of car is in your future? It could be a reliable clunker like my Duster, or a classier vehicle that takes your boss to the airport or the kids to the soccer game with equal aplomb. Let’s start with the basics:

What do you need? Is it just basic transportation — or does appearance play into it, as well? Some people care, some don’t.

Your job may require a van, truck…or a Mercedes to pick up the Queen. (Hey, if she’s visiting, you may be the one to show her around!)

What will it drive in? If blizzards are a regular part of your life, look for four-wheel-drive and snow tires. On the other hand, if you’re headed to Arizona during the snowy months, a standard vehicle will do just fine. And now the hardest question:

What can you afford? According to Jeff Yeager on the AARP website,the average amount of a new car loan is now more than $30,000 — a 40 percent increase over the past 10 years — and about 45 percent of those loans are now longer than six years. Will your budget fit that amount?

These tips may help stretch that budgeted amount even further: 

buying a new car basic*Buy your car used from a private party, rather than new from a dealer. (Or at least sell your previous vehicle to a cash for cars place, if you’ve got it — you’ll probably get a better price than trading it in.)

*Saw something you liked at the dealership? Wait to shop until the last few days of a quarter — or even better, the end of the year. Dealers have quotas to meet…or models that must be cleared away before the next ones are delivered.

*Check features. Sometimes “value-added” items like sunroofs and surround-sound stereo systems are already standard in some models. It may help, at least in older cars, to check letters connected with the name. GS, GL and SE signaled a regular model (versus the stripped-down ‘base’ version); LX, LS and LE were luxury vehicles. Don’t be afraid to bargain for what you really want — and be willing to walk away until you get it.

*Get inside info. Consumer Reports has a ‘New Car Price Report’ service. Each customized report costs just $14 ($12 for each succeeding report),  and gives you expert advice, including a 3-step pricing system, and the dealer’s actual cost.(Motto: “Never overpay for a new car again.”) P.S. They have used car reports, too.

*Is your car as reliable as it looks? Have a mechanic you trust check it over — thoroughly. You should also check its past history; floods and other natural disasters mean your vehicle may have been salvaged. (Not all states require that the seller furnishes this knowledge.) It could have been through an accident or two, as well. Carfax is a good place to confirm your vehicle’s past; see a sample report here.

Another option: leasing instead of buying. Lease your car, instead of purchasing it, and you get a nicer vehicle for the money. Monthly payments are generally lower, too. (Leaseguide.com is a good place to start for learning the process, including basic terms. It also includes expert advice and online calculators for estimating mileage and use.) A Honda Accord may cost up to $27,000 new, but you should also be able to drive one for less than $500 monthly. (During your 48-month lease, that is.)

Leasing requires you to sign a contract. (It also may limit how many miles you’re allowed to drive daily or weekly.) Your Audi A5 or Toyota Camry will look great in the driveway. (According to LeaseCompare.com, these, along with the Accord, are in the Top Ten for vehicles leased.) But what do you have, when the lease is done? That’s the hard part:nothing.

Other issues need to be considered, including mileage, maintenance and insurance. (Those will be discussed in an upcoming article.) Take time to research thoroughly, do some footwork, and it should pay off in more quality for a better price. Drive on!

photo credit: flickr dave_7 7F2TP33YZXZW

10 Responses to Buying A Car: The Basics

  1. Great info! While we wont be in the car market for a few years I’ll defiantly keep those sites in mind. My first car was a 1996 Corolla, I paid $600.00 for it in 2007. Put a total of maybe $300.00 in it over a two year period, sold it in 2009 for $700.00, not too bad 🙂

  2. We’re actually looking/planning for a car now — but doing it slow. We can make do with one vehicle right now while we wait and search for the ‘new’ one.

    And hopefully your next vehicles did just as well, $-wise, Catherine!

    Thanks for writing.

  3. Unless you have a business reason to lease, it’s the worst deal. I don’t understand why so many people get sucked into this option.

    We have bought new cars the last four times and then keep them for up to 18 years. I think the next car purchase will be a late model used car. We’ll be moving to one car when I retire.

  4. I honestly had not thought that much about leasing, until I edited a book for someone on the subject. He was a professional buyer who had been in the market for decades. And he was adamant that leasing didn’t give you ANYTHING.

    The only reason I can see for it would be because you’re required to keep a certain vehicle for your business…and you just can’t afford it. But better to buy an older model, I would think, than lease.

    Thanks for writing, all of you. Look for next week’s article, on insuring that vehicle…

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