The experience of buying a new car for the first time is one in a lifetime. Feelings of excitement and terror will probably fill your body. For me, I will be purchasing a new car for the first time this year, so I’ll share with you my process and what I’ve learned about buying a car from working at a car dealership in Austin.
If you’ve just recently (past couple of years or so) graduated and became financially independent, you’re probably thinking that it is time to upgrade your ride to something more reliable and won’t suck all the savings you’ve been slowly earning. At least, that’s where I’m at. For the past seven years I’ve relied on an old, cheap car I got while working part-time during high school and college. Now, I am ready to make the jump and make my first big investment: a brand new car. So here’s what I’ve learned and what I plan to do:
1. Find and Select a Car
First things first: remember that this car has to complement your lifestyle for the next 5, 10 or 15 years. My advice is this: make a list of what you really need (NOT want) from your car for (what will it need to do for you?), and calculate how much you can pay a month (take into account rent/utilities, groceries, gas, lunch, student loans, etc.). This will narrow your focus and provide a real scenario of what you can afford to own. I wrote a post that details 7 steps to find the best car, give it a read as it goes more in detail about this step. So while you may look great in a Lamborghini Gallardo, is it practical?
2. Pricing Information and Dealership Quotes
You can get pricing information about a specific vehicle model in a myriad of websites besides manufacturer’s and dealership’s sites. However, remember that you will end up buying the car from a dealership. So research prices on other websites and then request quotes from more than one dealership. That way you’ll know the price ballpark and have more power of negotiation. And one more thing, getting quotes from different dealerships can also give you a feel for how they work, so you can start testing out which places you are more comfortable doing business with.
This is pretty self explanatory, but I will say that the best thing you can do is to imitate your driving routine while test driving your choices. Also, go ahead and test drive an alternative that is in your budget, but you didn’t think about before. If you are looking at a CR-V, why not test the Civic and the Fit? They may surprise you.
Here’s where it might get trickier. Just know that you have two options: lease or buy. Both have pros and cons; the choice really depends on your lifestyle. Here’s a quick Leasing vs Buying guide that can help you in figuring it out. Also remember that most manufacturers have special financing rates for leases and purchases, but you can also opt to finance with your bank. The best you can do is research and inform yourself.
5. Trade-in/Sell/Keep your old car
Are you going to trade-in, sell, or keep your old car? The answer really depends on your individual need, but here’s a post I wrote about trading-in a vehicle if that’s something you are looking into. For example, I am keeping my old car for now. However, at the end of the day, I may end up donating it.
6. Closing the deal
Here’s a post I wrote about 4 questions to ask before closing the deal. It’s more directed at people who’ve mainly shopped on the internet without coming into the dealership, but it’s still worth a read. I whole-heartedly recommend coming to the dealership to test drive and get a feel of the place before you commit to a deal online.
Sorry for the lengthy post, but I hope it helps you in your first-time-car-buyer journey. If you are wondering what car I am looking at, it’s the Honda Fit. It genuinely has great price, features, safety and reliability ratings, and resale value. Anyways, remember to keep your calm and do your research. Take your time to be prepared and informed. And if you have any questions, please don’t hesitate to contact me at firstname.lastname@example.org.