How To Buy a Car Without Wrecking Your BudgetAugust 27, 2018 April 10, 2021 /
If you buy a car without knowing how to buy a car, you will likely make a very costly mistake that can derail or delay your Financial Independence plans.
Transportation is one of The Big Three Household Expenses and can have a significant impact on your Financial Independence journey. If you have determined that you absolutely need/want to have a car, then it is important to understand the process and the many factors, price included, to consider when the time comes to shop.
Should I buy a new or used car?
Buying a new (or new to you) car can be stressful. How much should you spend? Do you want to purchase new or used vehicle? Are you shopping for a compact gas saver or a built-like-a-tank SUV?
Depending on a number of factors, it is a good rule of thumb to explore how to buy a car second hand rather than new. A three to five year old dependable second hand vehicle will usually provide the greatest long-term value. However, there are reasons to consider purchasing a new car.
Before moving forward with a purchase, make sure you understand the Opportunity Costs of new vs. used cars.
How to buy a car online?
I moved to Washington DC in 2016 and sold my car after a few months because I didn’t need it – I walked almost everywhere and spent about $15 per month on other forms of transportation. I was sad to see my old car go – it was a great car, reliable, good gas mileage, and paid off!
When it came time to buy a new car, I looked online for tips and tricks. Some were helpful, but some were not. I did all of the “right” things written about in major media, and wasn’t having any luck getting close to the prices I was expecting. I tried the method of gathering quotes from dealers by emailing them and asking for their best price. However, what I found is that I kept receiving quotes for much more than my research showed I should be paying.
Eventually I modified the tactic. Instead of asking dealerships to send me quotes, I gave them a number and had them tell me whether they would sell me the vehicle at that price. Once I switched to this tactic, I had a lot more luck. I owned a car – at the price I wanted and significantly less than I was being offered – within 8 hours of taking the initiative this way.
Fiology thanks Airman Mildollar of Military Dollar for shaping this lesson.
- How MUCH Does Financing a NEW Car Really Cost? by Matt Gabriel of habeshafinance.com
- How To Buy A New Car And Not Get Screwed. 5 Car Buying Tips From A Former Car Salesman. by Ty Roberts of campfirefinance.com
- How to Buy a New Car by Philip Reed of nerdwallet.com
- Buying A Car Online-ish by JJ of ajourneytofi.com
- I Bought A Brand New Car And I Do Not Regret It by Airman Mildollar of militarydollar.com
- Edmunds’ Experts Discuss the 8 Steps to Buying a New Car by Edmunds on YouTube
- 022 | The True Cost Of Car Ownership by Brad Barrett and Jonathan Mendonsa of choosefi.com
- Once you have a reasonable price in mind, email local dealerships and tell them the year, make, model, and trim level of the car you are looking for and give them your “out the door” price. Make sure you include any options that are important to you, such as upgraded safety features, technology, and colors. Then, wait to get a response that works for you. The traditional awkwardness of running away from stalking salespeople on car lots are a thing of the past when shopping for a car online.
- Top 10 Cars for Smart People by Peter Adeney of mrmoneymustache.com
- True Car – Get the TruePrice – the actual price you will pay at the dealership
Note: Everybody knows car prices vary by make and model, but location makes a difference too. You might pay $500 more or less to buy in your hometown vs two states away. Use online shopping sites to compare how much to buy a car.
“There are no traffic jams on the extra mile.” – Zig Ziglar