I’ve mentioned it in a few times, but back in March I bought a new car! After having my old car for almost a decade (my parents purchased that car in 2007), I had no idea what to expect when it was time to buy the car. I wasn’t even sure what kind of car I wanted.
While these are all my own experiences, buying your first car can be daunting. Like so many other things in life, being prepared is key.
5 things to know before buying a a new car
1. Start saving now
I’m the first to admit saving money is not one of my better qualities. Part of this is because I make such a low income, it’s hard to stash money away. When I start my new job, I’ll be pushing all my extra income into savings.
While I have a new car now, you never know when you’ll need to get a new one. My old car pretty much gave up on life pretty quickly, about six months sooner than I was hoping for.
Your car could die tomorrow and the more money you can save on the front end with a down payment, the more you’ll save in interest.
2. Find Some Financing Early if You Need It
With not a lot of money in the bank, I knew I was going to have to take on an auto loan to pay for my new car. Here’s the thing though – I have a lot of debt. Before this car loan, it was mostly student loans and some credit card debt.
You know that stereotypical millennial who can’t pay off their loans and delays everything in life because of it? Home buying, kids, marriage?
All of that is me, but that’s another topic for another time. The point is, I knew I was going to have a hard finding a place to grant me a loan. The first place, the local credit union, denied me because I had too much debt.
Then I found Capital One Auto Loan Navigator. Now, this isn’t an ad, but those guys really saved me. They pre-approved me, so I was able to shop and tell dealerships that I already had fiancing. I wasn’t keen to getting a loan from a dealership itself.
Even better for Capital One, when it was time to actually approve me, they gave me a super low interest rate of 4.04%. Half my student loans have higher interest rates than that.
3. Do Some Shopping Online first
It took a week or so before I was able to go back up to the Dallas-Fort. Worth area and go car shopping with my dad. In that time, I looked up cars – mostly based on price. I knew I was coming in low, so any car that looked reasonably clean and had low milage for my price point.
I saved all these car listings into Evernote with a tag “laura’s new car.” That’s when I was similarities. I was clearly lookin for a new sedan, similiar to the one I was driving (a 2006 Sonata).
When it was time to buy the new car, I at least had some kind of idea of what looked nice online.
4. Have an Idea of Your Trade-In Value
I knew I’d be trading in my old car to help with some kind of down payment or to lower the overall total. I ran that old car into the ground. I’ve been pretty poor most of my adult life, so regular maintance wasn’t something I could always take care of. There were many things on this car that were probably original parts.
That being said, I knew my trade-in value would be low. I got about $800 from Kelly Blue Book and that was before anyone saw the absurd about of duct tape holding up my car.
When my dad first got in the car, he was hoping to get about 3K for it. I knew better, saying I was hoping for about $500-$1000, if I was lucky.
The dealership offered me $500 for the car. I was much more accepting of the offer than my dad was.
5. Listen to your gut in all things
There were two instances where I really had to listen to listen to my gut and know what was right, even when I wanted something else.
The second car I test drove was a 2017 Elantra. It was super smooth, drove like a dream, and the car was realtively the same size as my 2006 Sonata. This was the car that made me realize I wanted an Elantra.
So we spent the next day driving half a dozen Elantras. We went to one dealership in Grapevine where they had almost twenty Elantras. We test drove three or four of the Elantras and they were all nice, but the guy was so desperate to make a sale.
Even when I was clear I was not going to make a decision yet, the sales guy brought in his manager with a fancy dashboard to track sales rates on this car across te DFW Metroplex. They clearly were only interested in their sales and not interested in listening to me, so I asked for my keys (they were apprashing my old car) and walked out.
We ended up going back to the original dealership to test drive the car again to see if it was as smooth as we remembered it or just the first impression. It was as smooth as we remembered and I ended up taking her home.
Buying a new car is something you hopefully do not need to do frequently, but knowing what to expect will definitely help make the process easier.