The Car Buying Experience

The Car Buying Experience

As I’ve been posting on my blog about all my parenting experiences, my husband decided he wanted to share experiences he’s had too! We’ve decided to start up a segment just for him. It probably won’t be very consistent since he’s super busy with class, but I’m excited to get the man’s point of view in parenthood.

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Car buying Tips

B’s Tips to Buying a Car

Buying a car can be a stressful situation for anyone with experience or not. In October I and my wife bought herself a new car, and it was her first time. I chose this to write this post because I have seen and heard way too many poor decisions made being taken advantage of by either boyfriends/girlfriends etc. and lack of knowledge.  The following tips will help reduce the stress on any vehicle purchase.

Budget, Finance, Payment

The number one priority for purchasing a vehicle is to make sure you can afford it. This will in general help you avoid future hardships. From my other experiences of buying vehicles, my average has been $330 a month. The difference was that, on my first car, I was able to put a massive payment down on a vehicle than pay it off in 3 years. Now, I have $340 every month for five years. When you plan your budget, first consider to at least be able to do 20% of the initial cost as a down payment (will save you quite a bit on interest).

Though remember to add in additional amount registration fees and taxes. You can find this information from your local DMV. For example, in North Carolina taxes and registration cost us an additional $1000 dollars. But it wasn’t all in one down payment, there were the initial $700 taxes etc. at the dealership and an additional $300 for the DMV the following month. All in all, plan on 20% for your down payment on the vehicle and then add taxes and registration fees.

Before you go to the dealership, you need to check your credit scores (scores as in x3). Probably heard this a thousand times, but it does affect your interest rate. If you have low credit score than of 699 or below, I would suggest co-signing with someone you trust. There is nothing wrong with cosigning someone with a higher credit score because it will reduce your interest rate. However, make sure its someone you trust deeply because they will have part ownership.

Next, do your own research on banks on vehicle loans. When you’re purchasing a vehicle, if you do not have a bank in mind, then they will apply to multiple banks, to find an auto loan, which will affect your credit score even further (but not for the loan).

Vehicle Research

We all have our wants and needs. However, I suggest you first identify what kind of vehicle you need by identifying your lifestyle. Do you travel a lot? Need to transport children? Haul large items? These are all different variables that affect your decision between choosing a fuel-efficient sedan or own a family size SUV. Once you identify the type of vehicle you need, put together requirements. For example, blue tooth connection, back up camera, or sunroof. Remember though, if you get crazy about your requirements such as leather seats it will drive up the cost of your vehicle.

Now comes the long process of searching for a vehicle. I suggest searching multiple dealerships and price comparing. It is important to stay within your budget! Here, you may have to adjust your requirements to fit within your budget. Select a few different vehicles and schedule a test drive to make sure it’s a perfect fit.

Purchase vs Lease

Depending on whether to purchase or lease vehicle can be tricky, and budget dependent. Why do companies allow leasing of some vehicles? Companies allow vehicle leases because in the end they get the vehicle back and can be resold with a decent amount of mileage on it as a used vehicle. Also, the depreciation cost of using the vehicle is covered by the new owner by the monthly costs and generates a bit of revenue. The benefit of leasing a vehicle is that there are lower monthly costs. However, you will be limited on the usage of the vehicle, and in the end, must pay for damages at the end of your lease.

There is also a charge if you go over the usage of miles that adds up rather quickly. Average 25 cents a mile. Furthermore, some dealerships have a fee if you choose not to lease another vehicle from them. So, in end, I advise avoiding leasing vehicles because you don’t get your money’s worth in the end and pay for additional costs. However, if your budget or finance doesn’t allow you to purchase a vehicle, leasing is a valuable option.

Purchasing a vehicle, in the long run, is the more beneficial option because it is your vehicle, and you get your money’s worth/usage out of it and can be traded in or sold after. However, the monthly payments are much higher than leasing a vehicle and if you finance remember you’ll be paying interest. But like any long-term investment (3-5 years depending on finance etc.), you will own the vehicle that can last you until it dies which for me has been average of 15 years. Granted you will not be driving the new models or update vehicles every three years but can trade in to purchase a new one.

Additionally, dealerships will offer deals to take advantage of such free oil changes for life for the vehicle, which for use would average $340 (or one monthly car payment) a year. Your biggest benefit, if you can wait, is their big sales (DUH!). Towards the end of the year, dealerships are trying to push out older models to make space for newer vehicles and will give quite a deduction on price. But you will have to fight the crowd and hope someone else does not take the vehicle you longed for. On the other hand, on holidays they offer deals, that are worth taking so plan your buying in or around the deals.

New v. Old

Growing up I was the youngest of three, and we were fortunate enough to all have vehicles, and my family was not anywhere near the most financially stable family, but we made it happen. Because my parents bought used, maintained the vehicle, and passed down. Because of this, I was more focused on buying used 100%. However, after doing more in-depth research on our last vehicle purchase I was wrong.

Choosing between new and used vehicle does depend on what you can afford. Through recent my recent research there will new and old vehicles priced approximately $2000-3000 apart with the used vehicle having 20 thousand miles on it. Now it does depend on what comes equipped with the vehicle could change the price. That said 20 thousand miles is not worth the small difference and would be better off buying new with interest (depending on your down payment).

I hope you enjoyed B’s lesson on buying cars. Make sure to let me know any topics you might want him to cover!

-Trying Not to Go Crazy,

Signature - Rachel

1 Comment

  1. These are great tips when trying to buy a car. I ended up leasing my car before buying it due to a 0% interest rate on it!

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