How do you buy a car? Also, what car should I buy?
December 14, 2015 1:02 PM   Subscribe

My insurance company totaled my car, so in a few days I'll have a check and they'll stop paying for (part of) my rental car. With my current level of car-buying sophistication, I think my strategy is to walk into a dealership and say "Can I have $13,000* worth of car, please?" What safe, high mileage, 10-15k used car should I buy? How do I know whether to finance or pay cash? And, how do I actually, you know, do it? *I don't actually have a firm budget yet, of course.

I've only ever been involved in the purchase of two cars. Both were new. The first time, I didn't negotiate at all, although the salesperson generously gave me a Dr Hook CD. (This was in 2001.)

What car should I buy? New or Used? Hybrid? My first priority is safety. I'd like a reliable car, but buying used seems like it would save enough money to pay for a lot of repairs. I guess, I'd also like a few amenities. I'm replacing a 2007 Camry Hybrid (LE?) and that level of comfort feels about right. The junked Camry hybrid got decent mileage (but not great - low to mid 30s).

If not for concern about the longevity of the hybrid system, I'd probably be strongly inclined towards a 2009-2012 Camry Hybrid. I'd also consider some version of Prius. It didn't bother me in 2007, but now I'm a little worried about getting an older hybrid and then being forced to replace the hybrid system or battery assembly after just a couple years. How reasonable are these concerns?

The Kelley Blue Book suggests that this car would cost $10,000-$14,000, depending on the exact model year. That feels like a comfortable anchor for discussions of my budget. Unfortunately, part of my problem is being paralyzed by choices. I can afford a new model. I just think it's a waste of money, but I can't quite get rid of the nagging fear that a new car is the safe (and easy) choice. Is there some reason I'm not seeing that I should buy new?

I'm concerned that there might not be a reliable supply of Camry hybrids in my area and I can't wait around for one that's in the fair market price range. Whether or not I decide it's the best choice, I need some alternatives. I noticed that I was getting mileage at least as good as my Camry in my rental car, which is a Nissan Versa Note. Am I trading higher mileage for lower safety when considering smaller cars? Can I find a high mileage/smaller car that's still safe (and maybe has slightly more amenities than the Versa, like my Camry)?

Financing? I don't know what my credit score is, but it's probably less than ideal. I won't need to finance regardless of what car I choose, but I don't want to throw money away if financing is the better option. Is there a magic interest rate that's low enough to make it worthwhile? Can I use cash payment as leverage for a discount on the price?

Seriously, how do you buy a car? I should ask for the carfax report and I should have it inspected by an independent mechanic. . . are things that I've heard other people/foxes say. Should I? What websites should I use to find cars? To evaluate models? To research specific car histories? What questions should I research at home and when should I start calling or visiting car lots?
posted by stuart_s to Travel & Transportation (15 answers total) 6 users marked this as a favorite
As far as financing, I can't imagine why you would pay interest when you can just outright buy the car. I don't know if having the cash in hand would be a good bargaining tool or not; some dealerships make money off of loans, so it might actually work against you.

However, one thought would be if you can get a low-interest loan and make regular payments for a few years, it would be a good way to repair your less-then-ideal credit score, which could save you money in the long-term. I'm no expert, though.
posted by Fister Roboto at 1:33 PM on December 14, 2015 [1 favorite]

You could have bought my 2013 Civic with 14K miles on it or Husbunny's 2013 Fit with 10K miles on it for your budget.

Everything is a negotiating tool, so yes, if you can write a check for the entire purchase, that is significant leverage for a car lot wanting to get rid of inventory.

Consumer Reports has excellent car buying information and repair information (they've been keeping it for 50 years.) Carfax is a good place to start, a dealer will offer it to you. If it's still under warranty, and the Carfax is good, I might not worry about getting the car looked over by a mechanic.

If you put a down payment of $13,000 down, you can finance whatever the hell you want. We bought our two new Civics, with no money down, and got a 1.9% interest rate. End of the year deals are astonishing. We paid a lot less for model year 2015 brand new vehicles.

The internet is wonderful! You can start looking for vehicles on line that you think you might like, used car inventories at dealers offer a metric shit ton of information. I knew which car I wanted before I set foot on the lot.

Do your research, pick a car and buy it.
posted by Ruthless Bunny at 1:40 PM on December 14, 2015

I am told that the Toyota hybrid transmissions are ridiculously reliable. I seem to remember another Toyota hybrid being rated as one of the most reliable cars of the year (might have been the Lexus hybrids?)
posted by joshu at 1:40 PM on December 14, 2015

I have a 2008 Honda Civic, and I absolutely love it. It's been super reliable, and I really like how it drives. (I also test drove a Toyota Corolla, and I found the Civic to be more fun to drive.) It also gets good gas mileage. When I've calculated it myself, I got around 35 mpg, and this is of course a 7 year old car. The Honda Accord is more comparable to the Camry, if you want a slightly larger/nicer car, but I love my Civic. Personally, I wouldn't want to deal with a larger car.

I've also heard great things (here on ask mefi) about the Mazda 3, which I think is comparable in terms of price/mpg/etc to the Honda Civic. I'm hoping my current car will last me 5+ years, but if I were in the market for a new (or new to me) car, I would definitely look at the Mazda 3. I think a Mazda 6 might be comparable to the Camry if you want something more in that range.

In terms of buying the car, I'm sure you'll get lots of good advice here, but one thing I would do in your situation, if possible, is make a pact with myself to go and try out a few different cars without buying them. Maybe bring a friend if you think you'll need help resisting the sales pitch.
posted by litera scripta manet at 1:45 PM on December 14, 2015

Car dealerships make a bonus if you finance through them, so there's very rarely a discount for paying cash. Every time I've tried to tell them I'm financing through my own bank, they beg me to let them try to beat the rate.

Do you live near a Carmax? That's the way to go for a car shopper who doesn't really want to deal with the hassles of buying a car. They'll ship any car in their system to your closest location for a nominal fee, you pay the price on the window, and you're done.
posted by hwyengr at 1:48 PM on December 14, 2015 [1 favorite]

We bought a brand new Kia Soul for $13K earlier this year, so that might be something to consider, for the warranty and newest safety specs. It's really not a bad little car.

You could always take their financing, regardless of the interest rate, if you get a rebate for doing so -- just pay it off right away after. We took dealer financing, even though the interest rate was super-high, because they gave us $2500 off to do so (note: dealer incentives are generally best on new cars). Then I went and refinanced it with a credit union for 1.49% the following week. (I could have paid cash for it but my cash earns 3% interest in my high-interest checking account so financing was actually cheaper. If you are interested in learning about high-interest checking, memail me.)

As far as actually dealing with sales people... do your research. Decide what you want and how much you want to pay for it (it's gotta be a fair price in your market) and then DO NOT GET DISTRACTED FROM THAT PRICE. Just keep repeating, I will buy *this* car for *this* price. Monthly payments are irrelevant. Threaten to walk if they do not give you the car at that price. Do walk if necessary, there are tons of dealerships out there.
posted by rabbitrabbit at 1:56 PM on December 14, 2015

I also second Carmax. Easiest car I ever purchased.
posted by Young Kullervo at 1:56 PM on December 14, 2015

Are you set on buying from a dealership? Private party sales often yield better deals, but are generally only available to cash buyers. There's a bit more leg work in finding the right car, assuring yourself it's not a clunker, and transferring title. Carfax reports can help with the big stuff: has it been in an accident? subject of recalls? Independent mechanics can often be leads for good used cars - plus, they sometimes specialize in particular models. Anyone that won't let you take a car to a mechanic for an inspection (which might cost $100-200 in my part of the US), isn't someone you want to buy a car from.

Couldn't hurt to ask around your local mechanics and cruise through cragislist and other ads.

Re: Financing. I don't know the relative numbers, but dealerships certainly make money on financing. Unless you have a pressing need to use the money for something else, I can't imagine a reason that financing makes sense on *financial* grounds. You could buy a nicer (or bigger, fancier, newer) car than you can pay cash for if you finance - and that's the point. You pay more than the car is "worth" over time. You can get a plenty safe, reliable, modern "amenitied", used car on your budget. Any good salesman at a dealership will sense that you might want a nicer (bigger, fancier, newer), and will be happy to show them to you.

Second Consumer Reports - if nothing else, it'll flag the models and years that have poor repair records.
posted by GPF at 2:19 PM on December 14, 2015

Anecdotally, I've heard: if you can pay cash, do that (if you're financing, someone is making money off and that's money that should be in your pocket instead). However, don't tell the dealer you'll be doing so until the very last possible moment you can, because if they think they might sell you financing, they'll be more likely to sweeten the price.
posted by R a c h e l at 2:44 PM on December 14, 2015 [1 favorite]

Also if you have a car in mind, check out for a very thorough and honest review.
posted by Young Kullervo at 2:49 PM on December 14, 2015

It sounds like you're pretty set on getting a hybrid, so maybe you'll end up with that.

But I would start with:
1. What does it need to do?
- Haul Stuff? how much
- Haul People? how many
- Tow?
- Be small/Big
- highway driving vs city
- be cool/fast/fit an image etc. Hybrid is an image. Boring is another image. trucks are yet another.

2. How long do you intend to keep it?
You might want different

3. What can you afford? What's your budget
- Upfront (your 10-15k)
- ongoing, gas, maintenance, tires etc. per month

Then make a list of cars that fit your critera and then do some test drives and research and pick the one you like best, even if best is "i like the look and I want to say I have a hybrid"

You can plug your budget and size into auto trader or carmax and see the vast range you'll get in the used market. But I'd start with "what do i want this car to do"
posted by captaincrouton at 2:58 PM on December 14, 2015 [1 favorite]

Just a plug for two things, first Don't Get Taken Every Time by Remar Sutton a no nonsense guide to the inner workings of buying a car from a dealer - this was so helpful to us that I estimate we saved $1000 for every hour we spent reading the book and planning a strategy. It's not a long read, but it definitely demystified the process.

Second, or TL;DR, the advice I give people who are not going to read a book (which is okay!): I I would buy a late-model used car from a dealer who does not specialize in those cars (we bought my Honda Fit - recommended, BTW - from a Volkswagen/BMW dealer who had taken it as a trade in).

Dealers essentially take new cars on consignment, but they pay for cars they take in trade, so they have a financial incentive to move the used cars so they can recoup their money - they may make more per car with new vehicles, but the used cars are more of a financial liability. A dealer who has one or two off-brand cars on the lot might be more eager to get rid of them knowing that fewer buyers go out of their way to seek them out. Hybrids are in enough demand that you might have less negotiating room, but your late-model Camry strategy sounds like a good value, hybrid or no.
posted by deliriouscool at 4:55 PM on December 14, 2015

In case you wind up going for a new car, I've read threads on various forums on how to get the lowest price by putting the dealerships against one another example here. This requires you to do some legwork by researching what make, model, features etc that you want so that they can't upsell you on add ons.
posted by tangaroo at 6:04 PM on December 14, 2015

I got a 2013 Prius with 23k miles for 14 grand. Getting a hybrid with low miles for the money you have is totally doable.
posted by MisantropicPainforest at 6:12 PM on December 14, 2015

Something else to consider.. before your insurance stops paying for a rental car, try calling them in advance and tell them about your car buying efforts and tell them you're just going to need more time, and ask if they can cover another week of rental car? Try several different agents if you get a no at first. Worked for me without any hassle. Just had to tell them I was going to different dealerships every day after work and there was no way I could take off from work to go to dealerships so I needed another week. Plus even after I found my car and officially "bought" it, they needed 2 days at the dealer before I could drive out with it (I forget why), so it was really good Geico was still paying for a rental even after I found the car I wanted to buy!
posted by at 8:26 PM on December 14, 2015

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