Car Buying - Tips and Tricks

We finally did it!  After several years of big city living, in which we regularly rode the subway, walked, and occasionally opted for a ZipCar, Jeremy and I finally bought a car of our very own.

Since we're moving back to the Boston area, we had to have some very real conversations about where we'd live and how we'd commute.  While living in a city is great in that you don't need a car, we're getting to the point that living in the middle of a large city isn't for us anymore.  It's great to be within walking distance of the grocery store, shopping, and subways, but city living can be very expensive.  And you typically don't get a lot of space for that money.  While we haven't decided exactly where in the Boston area we'll live, we do know that we'll want more space.  I think it's a safe bet to say that we won't be living right down town, and having a car will be a good idea.

While we were home for the holidays, Jeremy and I did some car shopping, and ultimately decided to buy a VW Passat TDI.  (If you don't speak Car & Driver, like me, that means it runs on diesel instead of gasoline.)  We're really happy with that decision, since our car will get around 40 miles per gallon.  Aside from that, our car has some nice leather interior, a moonroof, roomy interiors, and an absurd amount of trunk space.  (I think this might mean shopping trips are in order!)

After having visited many car dealerships prior to our purchase, I've compiled some car buying tips for any of you who might be car shopping.

1. Know your budget.  First, unless you can afford to buy a car outright (ie. have no car payment), you're going to need to figure out how much you can afford for a car payment.  Make sure that before you arrive at this number, you've factored in a car payment, car insurance, parking fees, excise taxes, tolls, warranty payments, and fuel costs.  
2. Do some math.  Now that you know how much you can afford for a car payment, you can figure out the general price range you're looking in.  Be mindful that you can stretch out a car loan as long or as short as you want.  In general, I think most financially savvy people would agree that if you cannot pay off your car within 60 months maximum, you can not afford the car.
3. Know what kind of features are important to you.   Everyone has different priorities.  For me, I cared about getting a car with great fuel efficiency, strong resell value, spacious interiors, and great safety ratings.  To be honest, I also really wanted a car with all-wheel drive for New England winters, but I wasn't spending the money on an Audi A6, the Audi A4 was too small, I wasn't going to pay for a Mercedes or a BMW, I didn't trust the Subaru salesman as far as I could throw him, and I didn't want a gas guzzling SUV.  So, I compromised on that one.  What's important is to know what matters to YOU and what you're willing to compromise on.
4. Go to a reputable dealership, and bail if something seems fishy to you.  This is so important.  Unfortunately, not everyone is blessed with a strong moral compass, particularly in the business world.  Trust your gut.  If you're seeing or hearing things that are concerning, do business with someone else that you can trust.  When shopping, Jeremy and I strongly considered Subarus.  They're among the only non-luxury sedans that come with all-wheel drive, and they're generally regarded as safe, dependable cars.  However, when we went to the dealership, we were really disturbed by what we saw.  The salesman didn't ask us any of the proper questions (what are you looking for, why do you need a new car, when do you need the car, what's important to you, etc.)  What few questions he did ask (like "What is your budget"), he directed at Jeremy only.  Whenever I spoke, he rudely cut me off.  He bragged endlessly about how fantastic of a salesman he was, that he drove a BMW, and that the dealership sold more than 10 cars per day.  He had almost no inventory to show us, and except for a used car that had not yet passed safety inspections, he did not show us the interiors of any car.  He then demanded we put down a deposit on a car.  (He didn't seem to care if the deposit was for the used car that we did not test drive or a car that we saw from the outside only.)  When we told him we were not comfortable doing that, he dismissed us as not being serious about buying a car.  I've majorly digressed here, but my point is that if something feels wrong, walk away. 
5. Make sure you know what your warranty covers.   And then decide whether or not you'd like to purchase an extended warranty.  Gap insurance is also a good idea if you're buying a new car.
6. Negotiate.   Remember that you don't get 100% of all of the deals you don't try to negotiate.  See if the dealership is flexible on the price of the car or extended warranty.  Even if you negotiate $500 off the cost of the car, that's $500 in your pocket.  All they can say is no, and all you can say is that you tried.

Happy shopping!

Xoxo,
Cathy