Car Buying for Dummies
May 11, 2014 5:40 PM Subscribe
A few months from now, it is somewhat likely I will need to acquire a car. I've never owned a car, never mind bought one. How do I go about it?
For example:
- Presumably you need insurance once you start to drive the car home, but you presumably can't buy insurance without owning the car. What do you do?
- People sometimes mention having a car loan through their bank or credit union. How does that work? (I.e. for used cars only? any car? only credit unions?)
- Where can I find information on things like reliably or cost of maintenance for a particular make/model?
- How unreasonable is it to pick out a used car on the internet and then go collect it from the dealer? (I guess my mother's partner has done this for his daughter successfully. But having someone on the other side of the country pick out a car sight unseen seems ludicrous.)
- What else do I need to know before I start trying to research cars? For that matter, how do I research cars?
For example:
- Presumably you need insurance once you start to drive the car home, but you presumably can't buy insurance without owning the car. What do you do?
- People sometimes mention having a car loan through their bank or credit union. How does that work? (I.e. for used cars only? any car? only credit unions?)
- Where can I find information on things like reliably or cost of maintenance for a particular make/model?
- How unreasonable is it to pick out a used car on the internet and then go collect it from the dealer? (I guess my mother's partner has done this for his daughter successfully. But having someone on the other side of the country pick out a car sight unseen seems ludicrous.)
- What else do I need to know before I start trying to research cars? For that matter, how do I research cars?
Credit unions offer loans for both new and used. "New" might mean better interest rate, and it might include nearly-new cars too.
Since they're the source of the money, they essentially own the car (they have a lien on it), which is great because it means they won't let you mess up the paperwork - they know what they're doing and they'll help you through that side of the process. They might also help set you up with insurance etc.
Talk to your credit union.
posted by anonymisc at 6:04 PM on May 11, 2014
Since they're the source of the money, they essentially own the car (they have a lien on it), which is great because it means they won't let you mess up the paperwork - they know what they're doing and they'll help you through that side of the process. They might also help set you up with insurance etc.
Talk to your credit union.
posted by anonymisc at 6:04 PM on May 11, 2014
1. You arrange insurance at the dealer once you've bought the car, and they fax or email you proof of insurance. (Comparison shop beforehand so you have a preferred company to call.)
2. They can pre-approve you for a certain amount. New or used, but you need to specify which in your application. You bring a sight draft to the dealer and buy the car with it.
Seconding a trip to CarMax. Lots of makes all together, grouped by size/style/price range.
posted by Huffy Puffy at 6:07 PM on May 11, 2014
2. They can pre-approve you for a certain amount. New or used, but you need to specify which in your application. You bring a sight draft to the dealer and buy the car with it.
Seconding a trip to CarMax. Lots of makes all together, grouped by size/style/price range.
posted by Huffy Puffy at 6:07 PM on May 11, 2014
- Presumably you need insurance once you start to drive the car home, but you presumably can't buy insurance without owning the car. What do you do?
You call some insurance companies and explain your situation. That'll give you a much better sense of how you can proceed.
- People sometimes mention having a car loan through their bank or credit union. How does that work? (I.e. for used cars only? any car? only credit unions?)
Your bank or credit union assesses your finances and either denies your request or gives you one of many possible offers. Call them and ask!
- Where can I find information on things like reliably or cost of maintenance for a particular make/model?
You could use Edmund's True Cost-to-Own calculator. Generally, smaller cars tend to have fewer problems than bigger ones. Toyota, Honda, and Subaru make pretty reliable cars on the whole, and Ford and Dodge have gotten much better in the past decade. You can look these things up on Consumer Reports, too.
- How unreasonable is it to pick out a used car on the internet and then go collect it from the dealer? (I guess my mother's partner has done this for his daughter successfully. But having someone on the other side of the country pick out a car sight unseen seems ludicrous.)
I wouldn't. It could work, but there are too many variables and too much room for mischief for my relatively risk-averse self to recommend it.
- What else do I need to know before I start trying to research cars? For that matter, how do I research cars?
Research based on your needs! If you just need a basic vehicle to get to work and go to the store and maybe make occasional trips, get a nice little coupe or sedan with good gas mileage. If you have a family and go on lots of trips, maybe get a bigger sedan or a small SUV. Remember, car makers want to cater to your needs and wants, so take advantage of that by choosing something that offers the things you need and want at the price you can afford.
All of this advice assumes you're buying a car. You can also lease one. If you opt to lease, the car dealership you lease the car from will run your credit and make an offer of x amount down and y amount in monthly payments for a term of z months. You can negotiate, but they may be more or less flexible. The big advantage of a lease is that you get a brand-new car with a down payment of a few thousand dollars and a monthly payment of a few hundred; the dealership then handles all of the maintenance for the duration of the lease, which to me is worth a lot. When the term is up, usually either 2 or 3 years, you return the car; if it's an in-demand model, they might give you the option of turning it in early for a credit towards another lease. Feel free to memail me if you want more advice about leasing or cars.
posted by clockzero at 6:12 PM on May 11, 2014
You call some insurance companies and explain your situation. That'll give you a much better sense of how you can proceed.
- People sometimes mention having a car loan through their bank or credit union. How does that work? (I.e. for used cars only? any car? only credit unions?)
Your bank or credit union assesses your finances and either denies your request or gives you one of many possible offers. Call them and ask!
- Where can I find information on things like reliably or cost of maintenance for a particular make/model?
You could use Edmund's True Cost-to-Own calculator. Generally, smaller cars tend to have fewer problems than bigger ones. Toyota, Honda, and Subaru make pretty reliable cars on the whole, and Ford and Dodge have gotten much better in the past decade. You can look these things up on Consumer Reports, too.
- How unreasonable is it to pick out a used car on the internet and then go collect it from the dealer? (I guess my mother's partner has done this for his daughter successfully. But having someone on the other side of the country pick out a car sight unseen seems ludicrous.)
I wouldn't. It could work, but there are too many variables and too much room for mischief for my relatively risk-averse self to recommend it.
- What else do I need to know before I start trying to research cars? For that matter, how do I research cars?
Research based on your needs! If you just need a basic vehicle to get to work and go to the store and maybe make occasional trips, get a nice little coupe or sedan with good gas mileage. If you have a family and go on lots of trips, maybe get a bigger sedan or a small SUV. Remember, car makers want to cater to your needs and wants, so take advantage of that by choosing something that offers the things you need and want at the price you can afford.
All of this advice assumes you're buying a car. You can also lease one. If you opt to lease, the car dealership you lease the car from will run your credit and make an offer of x amount down and y amount in monthly payments for a term of z months. You can negotiate, but they may be more or less flexible. The big advantage of a lease is that you get a brand-new car with a down payment of a few thousand dollars and a monthly payment of a few hundred; the dealership then handles all of the maintenance for the duration of the lease, which to me is worth a lot. When the term is up, usually either 2 or 3 years, you return the car; if it's an in-demand model, they might give you the option of turning it in early for a credit towards another lease. Feel free to memail me if you want more advice about leasing or cars.
posted by clockzero at 6:12 PM on May 11, 2014
If you buy a new car, assume the dealer is a professional liar. Do some research (check out Consumer Reports car recommendations and price reports), visit a few dealerships but DON'T BUY until you figure out the exact car (model and options) you want. Then, email or call a few car dealers and get them to bid against each other so you get the lowest price.
If you buy a used car, get it inspected by a mechanic. Don't buy it if the mechanic finds problems with it. Don't buy from someone who repairs cars for a living.
Look at a "cost of ownership" calculator online to pick a car you can afford. You'll end up paying at least 50 cents per mile, whether it's a new car (gotta pay it off) or a used car (gotta pay for repairs).
Don't buy too much car. It's like an apartment/house -- it's easy to save a lot of money by buying a cheaper car. Less debt will probably make you happier than a nicer car.
posted by sninctown at 6:42 PM on May 11, 2014
If you buy a used car, get it inspected by a mechanic. Don't buy it if the mechanic finds problems with it. Don't buy from someone who repairs cars for a living.
Look at a "cost of ownership" calculator online to pick a car you can afford. You'll end up paying at least 50 cents per mile, whether it's a new car (gotta pay it off) or a used car (gotta pay for repairs).
Don't buy too much car. It's like an apartment/house -- it's easy to save a lot of money by buying a cheaper car. Less debt will probably make you happier than a nicer car.
posted by sninctown at 6:42 PM on May 11, 2014
hoyland, check out my spouse, VTX'x posts. We live in Bloomington and I bet he'd be willing to go with you if you woud like some advice or help with what to look for on a test drive, negotiation, etc.
posted by Coffeemate at 6:48 PM on May 11, 2014 [2 favorites]
posted by Coffeemate at 6:48 PM on May 11, 2014 [2 favorites]
If you already have homeowners or renters insurance and your company does car insurance too, just call your agent and tell them you're looking at buying a new car and what's the process? You'll probably even get a "multiline discount" for having more than one insurance policy with them. I just called up and told my agent what kind of car I was looking at ("small minivan"), he gave me a quote range and put some stuff in his computer so it was all ready to issue me a new policy and gave me the fax and phone numbers to use, and when I was ready to buy the seller faxed him some paperwork and he faxed back insurance authorization right away. A copy of the fax went in my glovebox until the insurance card and the bill came in the mail the next week. It was super-easy. It varies somewhat by state in how the process works, but it's generally an easy part of the process if you already have an insurer.
Banks and credit unions will do car loans and the terms are generally more favorable to you than the car dealership's terms will be. When you go to buy the car, do not tell the dealer how you intend to pay (cash up front, dealer loan, bank loan) until you have settled on a price. It just gives you a little more leverage and sometimes the dealer will offer you a lower price hoping to make it up in their payment plan.
Consumer Reports (which your library will have) and Edmunds.com are good sources for reliability and cost of maintenance and whatnot.
The best advice someone gave me in the car-buying process was to rent the type of car I wanted to buy over three days or so and try it out ... find out if it was comfortable for me to drive, see how it actually worked in my real life rather than on a test drive, try my kids' car seats in the car, etc. It might cost you $100 but that's a small amount compared to spending $10,000 on a car and then not liking the car or finding out you can't fit your skis in it or whatever.
Renting the car I wanted to buy actually led me to the wonderful world of used rental car sales where I discovered a magical place where you can get well-maintained 2-to-3-year-old cars for as much as 25% off blue book because of the "stigma" associated with a used rental. There is no negotiating about the price, it just costs what it costs, and basically you go pick up the car for a three-day rental and if you don't like it, you return the car and pay the rental fee. If you do like it, you just keep it and start the purchase paperwork (which is done through mail and FedEx). I picked up the car I ended up buying right before Thanksgiving, drove it on family vacation, had it checked out by my well-trusted mechanic, and just kept it. It was so easy. It has more minor scratches than most cars of its age, but the mechanicals were extremely well-maintained and I have two kids under 5, it's going to get scratched up anyway. I may never buy a car another way again. (They mostly sell, you know, cars that are popular with rental companies, so a lot of economy cars without too many options, not so much the luxury stuff, but that suits me just fine.)
posted by Eyebrows McGee at 6:53 PM on May 11, 2014 [5 favorites]
Banks and credit unions will do car loans and the terms are generally more favorable to you than the car dealership's terms will be. When you go to buy the car, do not tell the dealer how you intend to pay (cash up front, dealer loan, bank loan) until you have settled on a price. It just gives you a little more leverage and sometimes the dealer will offer you a lower price hoping to make it up in their payment plan.
Consumer Reports (which your library will have) and Edmunds.com are good sources for reliability and cost of maintenance and whatnot.
The best advice someone gave me in the car-buying process was to rent the type of car I wanted to buy over three days or so and try it out ... find out if it was comfortable for me to drive, see how it actually worked in my real life rather than on a test drive, try my kids' car seats in the car, etc. It might cost you $100 but that's a small amount compared to spending $10,000 on a car and then not liking the car or finding out you can't fit your skis in it or whatever.
Renting the car I wanted to buy actually led me to the wonderful world of used rental car sales where I discovered a magical place where you can get well-maintained 2-to-3-year-old cars for as much as 25% off blue book because of the "stigma" associated with a used rental. There is no negotiating about the price, it just costs what it costs, and basically you go pick up the car for a three-day rental and if you don't like it, you return the car and pay the rental fee. If you do like it, you just keep it and start the purchase paperwork (which is done through mail and FedEx). I picked up the car I ended up buying right before Thanksgiving, drove it on family vacation, had it checked out by my well-trusted mechanic, and just kept it. It was so easy. It has more minor scratches than most cars of its age, but the mechanicals were extremely well-maintained and I have two kids under 5, it's going to get scratched up anyway. I may never buy a car another way again. (They mostly sell, you know, cars that are popular with rental companies, so a lot of economy cars without too many options, not so much the luxury stuff, but that suits me just fine.)
posted by Eyebrows McGee at 6:53 PM on May 11, 2014 [5 favorites]
The best advice someone gave me in the car-buying process was to rent the type of car I wanted to buy over three days or so and try it out
This is the best advice in this thread for a first time car buyer. You should also ask all of your friends and family about their cars and maybe even drive them a bit.
The actual mechanics of buying a car are very easy- everyone wants you to buy a car and to finance that purchase and sell you insurance! Ending up with the exact right car for your needs as a first time buyer is a lot trickier.
posted by fshgrl at 8:22 PM on May 11, 2014
This is the best advice in this thread for a first time car buyer. You should also ask all of your friends and family about their cars and maybe even drive them a bit.
The actual mechanics of buying a car are very easy- everyone wants you to buy a car and to finance that purchase and sell you insurance! Ending up with the exact right car for your needs as a first time buyer is a lot trickier.
posted by fshgrl at 8:22 PM on May 11, 2014
When I recently bought a new car, I called two or three insurance companies and got quotes for the types of cars I was considering. I then factored that into the estimated cost of owning the car.
Once I decided on an insurance provider, I told them. , Then when I had decided on a specific car, I got the VIN (specific vehicle's unique identifiable number), called it into the insurance company and voila! Insured before leaving the lot.
Regarding choosing a specific car, Significant Other and I created a list of priorities for us and then a chart of cost of ownership, whether it had the must haves & nice to haves, what the test drive felt like, etc. We then created a smart phone friendly list of questions, so we could keep track of which car was appealing in which was.
Listen to the episode of This American Life about a car dealership (from approx November 2013). It's just interesting and will help you get a sense of what the salesmen are experiencing.
Good luck
posted by Heart_on_Sleeve at 10:23 PM on May 11, 2014
Once I decided on an insurance provider, I told them. , Then when I had decided on a specific car, I got the VIN (specific vehicle's unique identifiable number), called it into the insurance company and voila! Insured before leaving the lot.
Regarding choosing a specific car, Significant Other and I created a list of priorities for us and then a chart of cost of ownership, whether it had the must haves & nice to haves, what the test drive felt like, etc. We then created a smart phone friendly list of questions, so we could keep track of which car was appealing in which was.
Listen to the episode of This American Life about a car dealership (from approx November 2013). It's just interesting and will help you get a sense of what the salesmen are experiencing.
Good luck
posted by Heart_on_Sleeve at 10:23 PM on May 11, 2014
It sounds like you're thinking of buying a used car, but depending on your budget and what kind of car you want, don't rule out new cars. For small, fuel-efficient cars, a newish-used car can cost very nearly as much as a brand new one. (But insurance, etc., may end up more expensive.)
If you do buy a new car, you might actually find that the loan terms the dealer offers are a better deal than the bank's. But the more time you spend talking to the dealer, the more time they have to convince you to add on nonsense you don't need, so be careful. Decide how much you want to spend and what you want to spend it on and be ready to walk away.
Also, consider buying from a private seller. I've sold a car as a private seller and bought a car from a private seller and it was a great experience both times. You do have to do more of the legwork yourself if you're buying from a private seller - you'll have to go to the DMV to pick up plates, talk to an insurance agent yourself, etc.
Also also, exactly when you have to get the car insured, registered, inspected, etc., varies a lot state by state (assuming you're in the US - presumably it varies even more country by country!) so look at your state's DMV/RMV webpage for more info.
posted by mskyle at 6:52 AM on May 12, 2014
If you do buy a new car, you might actually find that the loan terms the dealer offers are a better deal than the bank's. But the more time you spend talking to the dealer, the more time they have to convince you to add on nonsense you don't need, so be careful. Decide how much you want to spend and what you want to spend it on and be ready to walk away.
Also, consider buying from a private seller. I've sold a car as a private seller and bought a car from a private seller and it was a great experience both times. You do have to do more of the legwork yourself if you're buying from a private seller - you'll have to go to the DMV to pick up plates, talk to an insurance agent yourself, etc.
Also also, exactly when you have to get the car insured, registered, inspected, etc., varies a lot state by state (assuming you're in the US - presumably it varies even more country by country!) so look at your state's DMV/RMV webpage for more info.
posted by mskyle at 6:52 AM on May 12, 2014
Here is my response in a similar ask, I think it's pretty comprehensive.
posted by Ruthless Bunny at 7:20 AM on May 12, 2014
posted by Ruthless Bunny at 7:20 AM on May 12, 2014
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posted by sageleaf at 5:53 PM on May 11, 2014 [1 favorite]