The Lessons and Tips I Learned from Buying My First Car

When our daughter was born, I was driving a Scion XA and my wife had a Toyota Yaris. It quickly became apparent that neither of these vehicles was going to be suitable for the long term. Immediately after bringing our baby home any travel by default included a diaper bag, pumping equipment, clothes, and a pack and play. As the months went by and she got bigger, more and more items were added to that list. Today, that list includes a growing assortment of her favorite toys, to the point where any trip now includes an separate suitcase just for the baby, in addition to the original items that I listed.

In case you’ve never seen a Scion XA or Toyota Yaris, all you need to know is that you can probably fit both vehicles in a medium-sized cubicle. As much as we tried to avoid it we had to face the truth: it was time to buy a larger car.

The problem for us was that neither of us had any experience buying a car. Our parents handled the research, search and acquisition of our current vehicles, so we didn’t know the first thing about this process. In addition to that, my Scion XA was a 2006 model with just shy of 200,000 miles on it, so on top of purchasing a new vehicle, we were going to have to trade in the Scion for the best value that we could get.

The first thing you need to know about me is that I knew absolutely nothing about cars. I’ve never been familiar with the different brands, knew nothing about engines and had never set foot in a dealership in my adult life. Every step of this process from selecting a vehicle, doing the test drive, trading in my current car, and making the purchase was new to me. Therefore, it was critically important that we do it right so that we got a reliable vehicle that met our needs for a competitive price. Below, I’m going to walk you through the step by step process that we followed and the tips that we learned along the way.

Step One: The Planning Phase.

It’s wasn’t enough just to say that you need a new vehicle. There are several things that you need to decide on before you actually start looking at difference cars. First, are you going to buy new or used? My recommendation to anybody who asks is to buy used. I never felt like it made much sense to buy something brand new that would lose a large chunk of its value the moment you drove it off the lot. A used car can typically get you much more value for your money.

Second, what qualifications are you okay with for your vehicle? You need to think about the maximum age and mileage for your car (if going used). What kind of car do you want (sedan, minivan, suv, etc.)? What performance features do you want it to have? Does the number of doors matter? Do you want leather seats? What kind of gadgets do you want it to have (Bluetooth, built in tv, rearview camera, etc.)? Does color matter to you?

I knew from the very beginning that I was going to buy a used car. We needed a four-door sedan, I didn’t want it to be more than 4 years old, I wanted it to have less than 100,000 miles on it, and didn’t care about any extra features or the color. This was the baseline that I was working with.

Third, what does your budget look like? You need to decide on the maximum you are willing spend and stick to it. This will help you narrow your focus when deciding on the brands, models and features of your vehicle. It also brings me to the first tip I learned from this experience: the total out-the-door costs and the vehicle price are not the same. When you purchase a car, your dealership will typically have fees for processing, license plates, title transfer, etc. There are also taxes that will need to be paid with the purchase. You need to keep this in mind when setting your budget. In my case, the car I ended up buying was priced at $1200, but the additional fees and taxes I paid brought my total money spent to around $1300.

Once you have completed these steps, it’s time to begin your research.

Step Two: The Loan Phase

Now that you have your budget decided on, you need to get approved for your loan (if you need one). You can do this either through your bank or a local credit union. This is where your loan provider will either a) approve or deny you for the limit that you requested, or b) give you an approval for a maximum loan limit that may be more than you originally asked for. It’s important to shop around for whoever will give you the best rate, since that will determine how much money you pay in interest.

Car dealerships can also provide you with their own financing. It’s a good idea to get your loan and interest rate approved by the bank before you start visiting salesmen, because you can use your already approved interest rate as a negotiating point. It’s very possible that the dealer you are working with will be able to offer you lower interest in exchange for your business, and you want to go into that dealership with as much leverage as possible.

Step Three: The Research Phase

You should know exactly what you are looking for before you ever set foot in a dealership. This will make your visit quick, efficient, and will make sure that you drive of the lot in a car that is everything you were looking for. This is the part where you decide on the make and model of your car, and your selection will depend on what you are looking for in your vehicle.

For the make, I knew that I wanted a safe car that would be very reliable, I did not want something that was breaking down all of the time. Additionally, I wanted a car with great gas mileage. We knew that we were going to be doing a lot of traveling, considering that our daughter has grandparents that want to see her as much as humanely possible. Therefore, we wanted something that had great highway gas mileage. Considering these requirements, we ended up going with Toyota. Both of our families are huge Toyota fans, and Toyota has a strong brand for safety and reliability.

Now that we knew the make, it was time to select the model that we wanted. To do that, we collected the names of all of their top models, and started reading consumer reports. This brings us to the second tip that we learned: always read the consumer reports when selecting your car model. Consumer reports help you collect all of the information related to safety, reliability, mileage, features, and performance. Some even give you comparison rankings to other cars of that type. My personal favorite is JD Power, which gives you rankings on everything I listed above along with a detailed description of the pros and cons of the car.

Once you have decided on the year, make and model of your car, you are ready to start your search.

Step Four: The Search Phase

Now it is time to start looking for dealerships that you want to visit. This will be tremendously easier since, if you’ve completed the previous steps, you know exactly what car you are looking for. Most dealerships today have pages on their websites where you can search their new and used cars. Make sure that you review the websites for dealerships in your area to make sure that they have the car you want for the amount you are willing to spend. This should save you from any wasted trips to a dealership that does not have the vehicle you desire.

This phase also includes a small portion of research. You’ve already spent what was probably a good deal of time studying the different makes and models of the cars you are considering, but you should also look into the different dealerships and their reputations. We all know the stereotype of the shady car salesman, and these guys are certainly out there with no qualms at the thought of taking advantage of you. You need to do your part to filter out some of these businesses.

For my car buying experience, not doing this was my biggest mistake. When I found two versions of the car I was looking for on a car dealership’s website, I immediately drove up and paid a visit. I could tell from the moment I walked in that I had made a tremendous mistake. The first thing I noticed was an argument between who I think was the manager and what was clearly a disgruntled customer. From what I could hear, the customer had apparently discovered some engine flaws in the vehicle after purchase that would be very expensive to repair. When it was over, the manager agreed to fix it himself, and finished with the statement ‘just don’t go back to this mechanic who is just going to look for something wrong.’ So from the first 5 minutes of my visit I immediately put this business into the ‘shady’ column.

Unfortunately, the experience didn’t get much better after that. I test drove both vehicles. While they drove smoothly, there was significant body damage to the front of both cars that was not visible in the online pictures nor mentioned in their descriptions. When I mentioned this to the dealer, he advised me that they would fix it for me after purchase. We then went back into the dealership while I waited for him to get some paperwork on the vehicle histories.

While I was waiting, I decided to check out the online reviews of this place. The overall rating on Google for this dealership was three and a half stars, not the worst but not the best. I then started to go through the reviews individually and noticed two things. First, every negative review had to do with poor customer service, with tons of examples of promises by the dealership not being honored after purchase (remember that thing with the body damage?). Second, all of the 5 star reviews were similar almost word for word, and included a lot of the same typos and compliments. I came to the conclusion that most of the positive reviews were fake, and that I likely couldn’t trust this dealership. I thanked them for their time, advised I would think about it, and got the heck out of there.

My mistake here was doing research on the dealership near the end of the process, and not before showing up. That brings me to my next tip: always read through the customer reviews before visiting a dealership. This will help you get a good idea of what other customers have experienced, and determine if you can trust their salespeople with your business. Once you have selected some reputable dealerships, and confirmed that they have the car you want for the right price, you’re ready to start doing some test drives.

Step Five: The Test Drive Phase

You should always test drive a car before you buy it. This will help you determine if you’re comfortable sitting in the car, if it drives smoothly, and if it truly meets all of your needs. A best practice is to test it on the highway and on the interstate. If, like us, you are buying a vehicle that will be used primarily for travel with a child, make sure you bring your spouse and kid with you on the test drive. Check to make sure the car seat installs easy, make sure it has the space you need, and confirm that your spouse is comfortable as a passenger and as a driver.

Some dealerships will offer to let you take the car with you for a few hours or for the remainder of the day to see how you really like it. If they do, I recommend taking advantage of this. Drive to your usual destinations or run some errands. This is a great way to find out if the car really is a great match for you. We did this for the car we ended up buying, and took it for our grocery shopping. This helped us get a feel for driving the car around town, and also let us test the storage space since we had our child with all of her travel accessories and also had to transport groceries.

Now that you’ve selected your car, found it for the right price at a good dealership, and had a successful test drive, you’re ready to proceed to the decision phase. However, before we get to that I want to talk a little about trading in your car.

Step Six (optional): The Trade-In Phase

Trading in a car you no longer need during your car buying quest is a great way to knock out two birds with one stone. It takes the process of trying to sell your car completely off your plate so you can start fresh with your newly acquired vehicle. I want to tell you about a great tip I learned from my trade-in experience.

As I stated earlier, my Scion was 11 years old, has just below 200,000 miles on it, and had standard wear and tear. The fist thing I did was look on Blue Book to determine how much I could hope to get for it. To my disappointment, it wasn’t likely that I was going to get much, maybe half a grand at the most.

When you tell your dealership that you want to trade-in your current car, they will have an appraiser who is typically on site take a look at your vehicle to assess it’s trade-in value. For convenience, they will usually do this while you’re on your test drive so that they have an offer for you when you’re ready to make a purchase decision.

This is the important part: not many dealerships will give you their offer in writing. That may not seem very important, but it is if you are trying to get the best value for your trade. That brings us to my next tip: Make Carmax your first trade-in destination. Carmax will appraise your vehicle just like everybody else, and their offer price for your current vehicle is valid for seven days. Additionally, they give you your offer in writing.

Carmax gave me the highest offer for my car out of all of the dealerships that I visited (they also have a good selection of used cars at competitive prices). While I did not end up purchasing a vehicle from them, I did keep my paper copy of their offer for my Scion. The dealership I ended up going with made me a lower offer, but when I showed them my Carmax offer in writing, they agreed to match it in exchange for my business. This helped me get everything done at one dealership and ensured that I got the best value possible for my current vehicle. I could not recommend more that you follow this approach when trading in your vehicle. If your dealership declines to match their rate, simply return to Carmax in that seven day window and they will still buy your car for that price!

Step Seven: The Decision Phase

You’ve followed every step that I outlined. You decided what you wanted, got your loan, selected your year/make/model, and found the car for the right price at a dealership you trust. A test drive proved successful, and you think you’re ready to pull the trigger. There is still one more thing you need to do before making everything final.

I can’t imagine anything much worse than buying a new car and then finding a laundry list of problems with it. You already spent a large sum of money getting the car, and now you’re sinking more into it to make it safe and drive-able. This can be incredible disheartening and frustrating. The good news is that its avoidable.

My final tip: It’s very important that you have a mechanic that you trust look at the car before everything is finalized. There are a couple ways to go about this. First, ask the dealer if you can have a mechanic check out the car before purchase. If not, then make sure there’s a window to return the car for a full refund (typically 2-3 days). If the return window is the only option, and it’s not already part of their standard policy, make sure that you get it in writing. This is entirely to protect you and your wallet from any short-term surprises. If you are not permitted to have your own mechanic look at the car before purchase, and the dealer will not agree to a refund window, then I suggest that you walk away. It’s better to be safe than sorry, and mechanical troubles can be a huge hole in your finances.

Additionally, if you’re shopping for a used car, there are some dealerships that go the extra mile to make sure that their used cars are up to snuff. Some businesses, like Carmax and Toyota, give their used vehicles a complete run down to make sure that everything is performing properly and you won’t have any trouble. You should still follow my tip for this step, but you’ll have some extra peace of mind if you go to a dealership ¬†that takes great care of their used cars.

That was a complete summary of my car-buying experience, complete with all of the hurdles and tips that I learned along the way. If you read this whole thing, then I hope you learned something that will help you in your own quest to get a new vehicle. We followed these steps and ended up getting exactly what we were looking for at the exact budget we wanted. Thanks for reading!

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