How to Save a Bundle on Your Car
Let’s face it. Our cars are one of the biggest investments we make. Protect your investment, and get the best deal on it, and you’ll save BIG overall.
First things first. My daddy would scold me if I didn’t first remind you how important it is to maintain your car so it runs well for you as long as possible and lasts long enough that you can resell it, or trade it in. That means frequent oil changes, tune ups, making sure fluids aren’t low, rotating the tires and making sure it’s aligned properly. Basically, not “driving it into the ground,” as he would say. All this stuff is vital to get the MOST out of your vehicle. If you think you can’t afford regular maintenance, you might consider a bus pass instead. <wink> Or, learn to do it yourself! I’ve been able to change the oil in a car since I was about 13 years old. It’s pretty easy!
When my stepson was going to buy his first car, his dad and I used it as a learning opportunity. We found a great deal in a local newspaper on a nice little fuel-efficient Geo Metro with low miles. We test drove it and checked it out mechanically. I have two stepsons, and Jbabe is NOT the mechanically inclined one. 😉 So, I decided we needed to name the car. Since it was bright red, my husband chose the name Ruby.
Why name a car? Well, my dad taught me long ago that learning about cars (I worked in his shop when I was a kid) was the best way to appreciate them. And, if you don’t appreciate the machine, you probably will take it for granted – let things like maintenance slide – and it will cost you. So, we named the car and it became almost like a family pet. We loved Ruby!! And when you love something, you take care of it. It worked! And we’ve named every car since then.
Do It Yourself
If you just can’t fathom getting dirty when changing your car’s oil, at least learn to diagnose if something isn’t going right. That can save you a bundle when visiting a mechanic. I once accompanied a friend to a mechanic. Her car wouldn’t start (or do anything). It would start with a jump, but would stop running when battery cables were removed. So, I figured it might be the alternator. The mechanic didn’t have the right alternator, but did have another similar. He explained that he could use her car’s alternator housing and replace the brushes. She was livid! “No!” she yelled, “I’m not paying to keep my old broken alternator!” I apologized, excused her, and thanked the mechanic, giving him the go-ahead. What my friend didn’t know is that brushes inside an alternator wear out and need replacing, while the outside is just fine. This wasn’t a mechanic trying to rip her off. He swapped them for a very reasonable fee and her car was back on the road.
Trust me, as a blonde woman, I’ve had many mechanics stop in their tracks when I tell them exactly what’s wrong with my car and what needs to (and does NOT need to) be fixed. I’m kinda like the fiance in My Cousin Vinnie. (giggle) And, I’m not afraid to ask Dad if in doubt!!
Check out this book: Lucille’s Car Care: Everything You Need to Know from Under the Hood-By America’s Most Trusted Mechanic. It’s an easy-to-read and easy-to-understand book about how to tell what’s wrong with your car.
The little old lady who knows all about fixing cars, [Lucille] Treganowan is the Martha Stewart of auto repair. She went into the auto-shop business in the sixties, became a popular success and went on to develop a cable TV show on car mechanics for those who are not mechanically-minded. (Co-author Catanzarite is the producer of the TV show.) Now she has a huge audience for her non-technical, no-fuss advice on how to keep your car on the road. She resists the obvious temptation to indulge in down-home folksiness and manages to convey in clear simple language the basics of do-it-yourself auto maintenance and repair.
What Car to Buy
I’m not going to recommend a specific type of car, but I do encourage you to do your research. Figure out what’s important to you. Safety? Size? Gas mileage? Resale value? Each person must decide what’s right for them.
I’ve had great cars, and not-so-great cars. I’ve had cars that I outright despised. They were money pits that should have never been built. Some cars have problems that you can find by researching. For example, I had an early 90s model Ford Taurus that would just die periodically. There were no codes that could be read by a diagnostic computer (which we found out the very expensive way *sigh*). My mom and grandma had the same kind of car, and theirs did exactly the same thing. Drove my dad nuts trying to get to the problem, which turned out to be a faulty pump inside the gas tank. A quick Google search showed that a lot of them had the same problem. Another car, a 99 Dodge Intrepid, was notorious for having the engine give out at about 80,000 miles. We learned that after my engine died and there were none to be had because it happened to so many of them. Crazy to think that the 2.7 was such a lemon, when the 3.2 – almost the same car – was so much better mechanically. Do your research before you buy to hopefully avoid buying a lemon!
How to Buy a Car from a Dealership
Okay, now to the good stuff. How to get the best deal on your next car if you’re buying from a dealership. I’ve bought one new car in my life, and it was such a traumatic experience I vowed never to do that again without intense research on the subject. I’ve also bought many used cars, which I prefer because the price is much lower and frankly a new car isn’t going to be new very long anyway. Sure, you might be afraid of “buying someone else’s problem” in buying used. That’s why I highly recommend having a reputable mechanic inspect the vehicle before you buy (e.g., here’s a link to Southern California AAA Used Car Vehicle Inspection – they also have a $45 rebate for premier members. If you’re not in SoCal, check out your AAA for details on their services.)
Know how car salespeople think, and do the opposite. When you go to a dealer, they’ll probably first ask what kind of car you’re interested in and what color. NEVER buy a car because of the color! I’ve bought cars without even knowing what color they are at the time! (lol, it’s true!) You want to focus on the whole price of a good vehicle. Do not let them negotiate based on monthly payments (e.g. “what can you afford?”) Make them talk about the total price of the car. Would you buy a pair of jeans for a price based on what you can afford? No, you’d buy jeans based on what they cost. Don’t forget to factor in all the little fees, taxes, and insurance too!
Why negotiate whole price vs. monthly payments? When I bought my Jeep Wrangler (the one new car I’ve purchased), I was actually down to negotiating the difference of about ten cents on the monthly payment. They laughed at me, my then-husband included (I’m pretty sure he was on their side which was so annoying!) Until I pointed out that this small amount over the life of the loan with interest equaled several thousand dollars!!
And remember, you don’t have to buy from a dealership. There are zillions of cars being sold by private parties, at auctions and elsewhere. Just make sure to do your research and have the car checked out before you buy.
Should You Get the Extended Warranty?
Whether or not to buy the extended warranty depends on lots of factors. Generally speaking, you probably don’t need it. Dealerships charge a lot for extended warranties that may duplicate your standard new car warranty. On used cars, they may not cover most things, and are probably way overpriced. To decide what’s right for you, check out things to consider and what questions to ask at answers.com. If you really want a warranty, you can find one directly – not through the dealership.
Scenario: Buying a car with a trade-in
This crazy idea has saved me thousands of dollars!! Try it!
Step 1: Look up the Kelley Blue Book value of your trade-in. You’ll want to find “trade in” value, but also get the price for “private party” sales (which are higher priced). Also look up both prices (high and low range) on what to expect to pay for the car you want to buy.
Step 2: Find your own auto loan. Credit Unions usually have much lower interest and fees than banks. But, do whatever’s right for you. Shop around for a better interest rate (it’ll make a huge difference!) Work with them to figure out what you can realistically afford. When it comes time to pay, don’t be late and pay extra if you can!
Step 3: Extra fees can add up. Figure out what insurance will cost you. In addition to liability coverage, you’ll need comprehensive and collision coverage if you have a loan. Be sure to factor this in. Full coverage insurance isn’t cheap! It also pays to shop around for insurance! Just make sure that the “cheaper” rates you’re finding have enough coverage. Sometimes state mandated levels of liability insurance are ridiculously low. I found that out the hard way too!
Also check out how much licensing a vehicle costs in your state. In some areas vehicle licensing is based on value of the car, and can cost hundreds of dollars each year.
Step 4: Now the fun begins! Get a written quote for your trade-in from a dealership. Ask them to give you private party rates (or at least more than wholesale blue book), and do this while you’re shopping for a car that costs at least twice what you intend to actually pay. Tell them you’re shopping around, and leave this dealership with your trade-in quote in writing.
Step 5: Go to another dealership and find a car you like, in your price range (you’re shopping for the total cost of car, not monthly payments!), that is mechanically sound. Spend some time with the salesperson. Ask about financing with them (this makes them money and they might offer a better price for the car). You can compare prices with the auto loan you found, and you don’t have to use their financing if yours is better. Show that you’re serious about buying a car from them. Ask for, in writing, a price on the new/used car and a price they’ll give you for your trade in.
Sales tax rates vary by area, consider choosing a dealership in a lower tax area. This could save you hundreds of dollars! (e.g., 7.5% tax on $30,000 is $2,325; 9.25% tax on $30,000 is $2,775!!) To find sales tax by location, click here.
Step 6: Now ask them to match your written quote for trade-in from the first dealership. Usually car salespeople will offer you a lower price to buy their car because they’re going to make money on your trade-in by offering you “wholesale blue book” (a low price) for your trade. So, you’re now asking for the low price on their car and a higher price for your trade. If they say “no,” then leave. I’ve never had a dealer let me leave their lot after they’ve invested a few hours in me. They usually come running over and say they got the manager to agree to this, and they can’t believe it, yadda yadda yadda. 🙂
Step 7: Get everything in writing, each time it’s said. I’ve had salespeople say one thing and then come back after “talking to their manager” and they have totally different numbers without telling me it changed. (One of my less shining moments involved throwing a cup of coffee after one particularly crooked salesman outright lied and was trying to pass off charging me an extra $3,000, hoping I wouldn’t notice. THREE THOUSAND DOLLARS!!! Grrr, I was SOOO mad!!) What they’re trying to do in taking HOURS to get this deal done, is wear you down. Don’t fall for it!
Step 8: Get your price for the new/used car, and get your price for the trade-in. Get the lowest rate on your loan, and the lowest tax rated area. Congratulations! You just got a great deal on a car!!
Scenario: Buying a car without a trade-in
Repeat steps above and in Step 6 (after they give you a price), decide that you’re not trading in your car after all. You’ll get the lower price based on them thinking they’re getting your old car to make money on.
Disclaimer: I’m not trying to paint anyone as a bad guy here. My great uncle owned a dealership, my cousin was a car salesman, and my best friend’s dad sold commercial trucks. From each of them, I’ve learned that great people who sell vehicles sometimes do things that might surprise customers. I’m not saying all deals will go like this, but in my experience these scenarios have come up.
Sources: I’m writing from my experience. In addition to knowing people in the auto sales industry, I’ve personally purchased 17 cars in my life. (One new car and four used cars from dealerships, seven cars from private parties, and five cars from charity auto auctions. You can Google local auctions, but be sure they’re reputable, and note that buying a car on auction is an art form, in and of itself.) You might be thinking I have a dealership of my own (lol), but what I try to do is get good deals on cars and resell them after a few years when I’ve found another deal. I usually get my money back or more, so I’m not really paying much to use the car.