A car is the most expensive purchase most people make next to a home. And today people are holding on to cars longer than ever before. Are you good at budgeting maintenance and repairs for your car? Are you good at budgeting in general? How long do you plan on keeping the car? How much can you afford to spend on maintenance and repairs over the span of your ownership? All of these concerns factor into the type of car you should buy and whether you can afford its true cost to own. I bought a new car almost every three years because I didn’t want to budget repairs into my life. My maintenance and repairs bills were at a minimum, but this isn’t a smart money move. I’ve wasted a lot of money due to my fear of confronting repair costs and mechanics.
Here’s where the True Cost to Own calculator comes in handy. Make sure you understand your driving and spending habits and can afford the car before you purchase it. Looking ahead will not only save you from frustrating situations like mine and Mary’s down the line, it could also save you from making a poor decision with one of the most expensive purchases of your life.
Pick the Right Point of Purchase
Whether you’re starting out with a binder full of consumer reports and a prioritized wish list or a blank slate, one of the most important decisions you’ll make is where to shop. These days there are lots of ways to go about buying a new or used car, and each comes with benefits and risks.
At the end of the day, you want a good deal and a great car you can have a long-term, loving relationship with. Where you purchase your car is important, because it can determine whether your relationship with your new car starts off strong.
Car salespeople are experts. It may sound hard to believe, but your salesperson should be your ally, your buddy, your friend. You should establish a good business relationship with him or her and with the entire dealership staff. They are there not only to sell you a car, but also to help you make the right choice for you. Even if you have your car in mind, share your driving and spending habits with them. Listen to their opinions if they differ from yours. An experienced salesperson knows and has seen it all.
If you’re someone who has a lot of time to research and shop around for a car to get a great price, there are plenty of online tools to help you find a car and direct you to a dealership. If you’re someone like me, who doesn’t have a lot of time to spend on this process, a dealership is your best option.
Franchised Dealerships
The only place to shop if you’re buying a new car, dealerships have direct relationships with auto manufacturers. Franchised dealers also sell used cars that are mostly under five years old. The benefits of buying from a dealership are clear.
+ Their salespeople not only are experts on the brand you want to buy, like Ford, they are also trained to help you find the right car for your budget and needs.
+ On-site certified technicians look over and fix the car before the sale.
+ They provide financing options.
+ They have direct associations with the auto manufacturers.
+ They have access to discounts and financing deals through the auto manufacturers.
+ They may offer the option to test-drive the car for twenty-four hours or longer.
+ They make trade-ins easy if you’re looking to sell your current car, and they also sell certified used cars.
On the minus side:
- Dealerships are often the most expensive places to buy a used car.
- Dealerships are expensive places to maintain and repair your car. Prices at their servicing centers are two or three times those of independent repair shops.
Auto Malls and Large Chains
Megadealerships that carry numerous brands under the same roof, auto malls or large chains can be convenient as one-stop shops for trying out several kinds of used cars. Among their pluses:
+ The salespeople are trained to help you find the right car for your budget and needs.
+ On-site certified technicians look over and fix the car before sale.
+ They provide financing options.
+ Some have no-haggle prices, so you don’t have to do any negotiating.
+ They make trade-ins easy if you’re looking to sell your current car.
On the minus side:
- Auto malls tend to be just as expensive as franchised dealerships, even though they do carry cars more than five years old.
- Auto malls don’t have servicing centers.
Independent Used Car Dealers
Carrying numerous brands under the same roof, independent used dealers can be owned by a single entrepreneur or a group of people acting as a small business. Is their reputation for untrustworthiness deserved? Honestly, I’m not sure if the whole “used car salesman” stigma started with a few bad apples or holds a grain of truth. Like any option, used car dealerships come with their pros and cons. Among the benefits:
+ They offer cars with a wide age range, including cars past three to ten years old. Options can range from less than 10,000 miles to “Next stop, junkyard.”
+ They often carry options under $10,000.
+ They tend to be cheaper than dealerships and auto malls.
+ Some indie dealers offer financing options.
On the minus side:
- Their on-site technicians may not be the most qualified techs. You’ll have to be more diligent when checking the car over to make sure the quality matches the price.
- They have smaller selections of cars.
- The older the car, the harder to track its maintenance and repair history.
- Financing rates may be significantly higher than those of dealerships or auto malls.
- They may not allow you to test-drive the car overnight or for a longer period.
- You will have to be more diligent with researching the car’s history. An indie used car dealer may sell rebuilt, fixed-up cars that have been in accidents. Be sure to check the vehicle’s VIN on the website Carfax.com (see page 253) to find out what you’re getting into.
Private Owners
You can buy from private owners online, through websites like Craigslist or eBay Motors, from local paper ads, or by word of mouth. The one and only time I bought a car from a private owner, the seller ended up being someone I sorta kinda knew—by association and eventually by reputation—but things didn’t turn out so well. You have no idea what you are getting into when you purchase a car from a private owner, so you must be more diligent when researching the car’s history and maintenance and repair records. A serious private owner will have most of the research done for you. Here’s my take on how it shakes out, starting with the biggest plus:
+ Buying from a private owner offers the single best deal for a used car since there is no middleman. Many people like to sell their cars privately so they can get the best price for themselves, and you’ll also be getting the best price for yourself. A private car purchase is the high-risk, high-reward stock of car purchases.
And now for the negatives:
- You must pay cash. (This is more of a positive to me.)
- You must pay a mechanic to look over the car.
- You won’t be able to test-drive the car overnight or for a long period of time.
- You will have to be more diligent with researching the car’s history. The seller may be selling a car he or she has done lots of work on. Be sure to check the vehicle’s VIN on the website Carfax.com (see page 253) to find out what you’re getting into.
Buying New
There are many advantages to buying a new car. The new car smell is one of my favorite smells of all time, and it’s one of the reasons I purchase new cars. Being free from worry over how a previous owner treated the car is another advantage of buying new. Finally, prices for new cars are pretty standard, and you know you won’t have to think about expensive repairs for a few years.
You can buy new cars only from franchised dealerships, and they love to offer all types of deals to get customers to finance or lease a car. You won’t need a PCT to look over a new car
, and you won’t need to invest nearly as much time and energy in researching as you would if buying a used car.
Leasing New
I’m a great candidate for a lease, because I like a new car every two to three years. There are other advantages of leasing a car, including:
• Lower monthly payments with a low (and sometimes no) down payment
• No major repair costs because you are always under the vehicle’s included factory warranty
• Easier transition to a new car every two or three years
• Easy and hassle-free trade-in when your lease agreement ends
• Often less sales tax
• Being able to get a nicer, fancier car for less money
Leasing a car sounds great right? But there are some huge downsides:
• You don’t own the car. Leasing is like paying rent. You pay to drive the car for three years or less, but in the end you don’t own anything. There is always the option to buy the lease after the leasing term is up. But you never want to buy your leased car. It will be cheaper to buy the same car used.
• Your car payments will never end.
• Your mileage allowance on a lease is typically 12,000 miles a year. You can purchase extra miles if you need to, but make sure you understand how many miles you will drive per year in the next few years. If you drive 40-plus miles just to go to and from work, with that alone you are cutting close to the 12,000 miles per year mark. Many frequent leasers have secondary, beater cars they use to save miles and wear and tear on the leased car.
• Lease contracts can be confusing and filled with legalese, so make sure you have a great relationship with your salesperson, and don’t be afraid to ask questions about your agreement.
• Long term, leasing is more expensive than buying a car and keeping it for years.
• Excessive wear-and-tear charges can be a nasty surprise at the end of the lease.
• It’s costly to terminate before your leasing period is up, which you might have to do if your driving needs change.
Leasing is a great option if you like driving a nice luxury car at a low price. However, it isn’t the best option for your long-term financial health. Suze Orman definitely advises against it. So if you’re not in a jam, and you already own a car, lease a second car. Your older car can be used to fill in when you’re not looking for a fancy ride or when you need to make a long trip.
There may be a time when leasing a used car is most cost effective for you, but I do not recommend this option unless it is your last resort. Your salesperson can help you determine if this is a good choice depending on your spending and driving habits as well as your budget.
Buying Used: Don’t Fear the Used Car Lot
You may have heard the old adage that cars depreciate as soon as we drive them off the lot. Sad but true. Unlike houses or 401(k)s, cars aren’t investments that ripen over time. They lose a lot of value their first two years, unless you’re talking about a classic or show car. But here’s the upside: For the same reason, used cars often represent better value for your money. With a used car, someone else (the car’s first owner) already absorbed the cost of driving the car off the lot. Buying used is the way to go if you make the right choice and don’t get saddled with expensive repairs. It’s the unknowns that are scary.
We don’t know whether the previous owner loved and cared for the car the way we plan to. Was that owner a #shecanic, or a certified auto airhead? The answer might not be obvious, but it matters. You have to do more research and be more educated to buy used. That is why I stayed away from used cars. But if you know what you are doing, buying a used car can be great.
While still in school to become a technician, I purchased a used car on Craigslist, looking to bank some hands-on auto tech experience as fast as I could. Before taking the plunge, I had the head of the automotive department look over the car with me. I was aiming to test out my new skills on a hoopty, not wind up with a total clunker.
Turned out my teacher knew the previous owner, a woman who’d brought her car in to the school to get it fixed a bunch of times. He and a teaching assistant looked the car over and gave me some ideas of what it needed—tires, a tune-up, brakes, rotors. Off I went and plunked down some $2,500 for an eleven-year-old Toyota Corolla. When I brought the car back to the lab a few weeks later, my teacher looked at me and said, “I wouldn’t have bought that car, definitely not at that price.
“Nope,” he continued, shaking his head. “Not the way that woman drives.”
He could have been a little bit more helpful by telling me that in the first place. But the good news was, there ended up being plenty for me to work on, including lots of suspension issues. It was my auto airhead karma.
Most of us don’t have money to play around with and aren’t trying to bank a learning experience. So let’s talk about how to make sure you minimize your odds of winding up with a lemon.
Five Ways to Tell Whether You’ve Found the Used Car of Your Dreams
Once you’ve found the used car you think you want, it’s time to get more serious about this new potential friend. Here’s how I assess whether or not I’ve located my new BFF.
1. Is the price of the car fair, given its condition? Do your research online by using tools like kbb.com, Edmunds.com, or cars.com that help you determine the value of the car you want based on age, miles driven, amenities, and general condition of function and aesthetics (great, good, fair, poor). Some sellers will provide this information for you.
2. Has the car been through a crash or natural disaster? Check Carfax.com to get the car’s history (which travels with its VIN), and see whether you can find evidence of significant damage. Often, cars that have suffered major damage have repeating and recurring failures. The car will never be quite right again, so it’s generally not worth the risk. Most sellers will provide this information.
3. Show me the receipts! Ask the seller to provide maintenance and repair records from the previous owner or owners. This should be a major selling point for a well-educated #shecanic. Proof that the car was cared for and loved is invaluable. You want to see that all the major maintenance tasks—oil changes, fluid flushes, tune-ups, belt replacements—have been performed regularly. The sparser the records, the more nervous you should be about buying the car.
4. Was the car’s exterior well taken care of? No signs of rust on the body or underneath? Do not buy a car with visible rust on its body or undercarriage unless you understand the implications and costs associated with the rust. Cars with extensive rust are more costly to repair. Rust could also compromise the integrity of the car frame.
5. How does the interior look? While an interior that’s less than spic-and-span won’t affect how the car operates, it might be an indication that the car wasn’t well cared for. Plus, your comfort level matters. The cloth ceiling of my ’88 Chevy Cavalier loved to lie on my backseat passengers’ heads, and I had to thumbtack that thing to the car ceiling. That was fine for a teenager, but today it would be a no-go.
Never, Ever Skip the Test Drive
Once you’ve picked out a buggy that suits your budget and fits your style, take your prospective ride for a test drive. Make sure you drive for at least thirty minutes. And don’t be shy. Open that baby up, take her out on the highway! Drive to a parking lot where you can come to a hard stop, and make a few hard right and left turns. Turn the car off and on a few times. You want to be smelling, feeling, and listening for anything unusual. How does it feel to sit in and drive the car? You want to be comfortable, be able to see clearly on all sides, and feel safe. Here’s a checklist of what to listen, look, and feel for when buying a used car.
AC and Heating System
• Is the system functioning? Make sure the heat and AC both work, not only when you’re in park, but also while you’re driving.
• Do you hear any loud or unusual noises coming from the heater or AC? These may be indications that the blower motor is failing.
• Has the c
abin air filter been changed? These should be swapped out about once a year.
Heating and AC repairs can get very expensive. So even though this may seem like a negligible line item, don’t buy a car with a nonfunctional climate control system unless you know what caused the failure and how much it will cost to fix. Negotiate with the seller to deduct the cost of the repair from the price of the car or have the owner fix the issue.
Brakes
• Are the brake pads, rotors, shoes, and fluid new? These should be new or like new, and essentially pristine. (With one exception: Brake shoes don’t wear as quickly as brake pads, so cars outfitted with drum brakes may not need that part replaced until after something like 50,000 miles.)
• How does the brake pedal feel? It shouldn’t fall to the floor or feel soft or spongy. There should be a nice resistance on your foot when you brake.
• How does the action of the brakes feel during normal braking while driving? You shouldn’t feel any pull or shaking.
• How do the brakes respond when you brake hard? The car should come to a quick stop and should never feel unstable or out of control.
Girls Auto Clinic Glove Box Guide Page 18
