How To Buy A Car

The new car we got in 2017.

We are in the process of replacing the lease on our car (we've concluded the negotiation) and barring any disasters, we will be picking up our car on Friday.

I thought I'd share a few lessons along the way.  I've bought or assisted people in buying 12-15 cars over the last 35 years, and while that's not a ton as compared to a car dealer or car guy, I've got some experience under my belt.  (Two of my cousins are also car dealers, and while I haven't consulted with them about this post, we've talked in the past)

I have mostly bought new cars, or late lease model cars.  There's a whole 'nother set of thoughts about buying used cars, but that's not my expertise or bulk of experience.

So enjoy, and if you have any questions, or statements to add, please feel free to leave a comment!

DO YOUR RESEARCH

There are a million cars out there.  Which one is for you?

Get this buying guide on Amazon.

While I can't tell you (and neither can a Facebook Quiz-- which kind of car are you?)  you have to think about your needs.  What will you use the car for?   Who is going to drive the car?  Where are you going to drive it?  How many miles a year?  Will it be city driving, or highway miles?  Are you going to drive this car into the ground, or trade it in a few years?

A great place to do your research is Consumer Reports.  They have a good track record, write regularly about cars, and are not biased.   You can subscribe to Consumer Reports on Amazon.

We also went to the car show to sit in and check out a number of cars in one fell swoop.

You can also use this car finder online search to look for cars with features that want. via NADA

Once you've narrowed it down, I highly urge a test drive.  Each car is radically different, and will have different features.  You need to spend a little time in each one.   Test drives are always free, and sometimes there are incentives to test drive (gift cards, etc) 

Here are my answers:  I'm a family guy who occasionally lugs large things around in the back of the car-- I need storage capacity.  Because I live in Chicago, and park on an unplowed alley, I need four wheel drive (or at least All Wheel Drive)  And because my wife and I share one car, and we are wildly different heights, she's under 5', while I'm 6'1, we value memory seats as an essential feature.  We also value reliability and safety, and low maintenance costs.

SHOP ONLINE

The car we are going to get on Friday.  

Once you've decided which car you want, and you've got it down to the color/features, it's time to find out who has your car.  In the past I've used my memberships with Costco and AAA to use their online services to do the shopping.  You sign in, you tell them what car you are looking for, and they will assign you to a dealer.  Once you've done that, you usually get a call within 4 hours, and you can tell that person what you are looking for, they will be able to tell you whether or not they can get the car of your dreams, and should be able to give you a quote on it.  Ask them to email it to you so you have it in writing.

For our Subaru, we got a quote that was about $1000 under the Manufacturer's cost due to rebates.

But wait, don't sign  the deal yet!  I would now call two other dealers in your area and see what they will do for you.  Everybody wants your business and is willing to negotiate.  Tell them you want the lowest price they have without any B.S.  They will give you BS anyway (that's their job) but you already have a good idea of what your car should cost.  You can also solicit car quotes using a service like  http://www.truecar.com

Sometimes the lowest price is not actually the lowest price.  The dealer will try to add on some bogus fees to make up for the profit that they are losing by offering you a lower cost.  Be careful of these dealer add ons-- some are legitimate, but almost all of them are negotiable.

And sometimes these things are things you want.  I opt to buy the maintenance upfront on my lease-- I get a discount for doing so, and more importantly, it gets figured into my monthly bill.  Now I don't have to worry about other costs, or an unexpected maintenance cost.

HOW ARE YOU GOING TO PAY?

Because we have our own business, we elect to lease our car.  It's write-offable (although not as much so as it used to be) and has a lower monthly cost than buying a car, as long as you have the cash flow to figure it into your budget.  At some point (when my son turns 15) we will probably buy a used car.

If you don't have your own business, I'm not sure if leasing is a good option.  You might be able to get a 0% or close to 0% car loan. 

The better your credit is, the better off you are going to be.

If you need more advice, I highly recommend checking out NerdWallet, which has a number of great articles going over each of the steps above in detail, including a template email for sending, what to look out for, and tips and tricks for getting the best deal.

https://www.nerdwallet.com/blog/loans/getting-email-car-quotes/
https://www.nerdwallet.com/article/loans/auto-loans/how-to-buy-a-new-car
https://www.nerdwallet.com/blog/loans/online-car-shopping/