Help me get a new (used?) car in my life?
October 3, 2017 3:25 PM   Subscribe

Time to level up from my tradition of beaters. But have no idea where to start and am ++intimidated by the process.

I've always driven beaters, but am starting a small side business soon and need to look half-professional.

I'm ready for a new car but don't know whether to buy or lease, what kind of car to get, pre-owned or not, etc etc etc. I know literally nothing about cars. I generally hate dealing with garages and buying a car feels like that on steroids; I need halp.

Right now I’m basically down to deciding whether to lease a new car, or buy a car that is a few years old (like 2013+). Once I’ve made that decision, I have no idea what kind of car I should choose!

I’d ideally like to spend max 300$/month on a car payment/lease, if possible (is that possible?). My take-home pay after rent and student loans is about 2000$; that’ll go up over the next couple years but I’d like the extra to go to reducing debt. I can put about 1500$ down (that includes my trade-in of my beater). I live in Canada if that's relevant.

I’d like something that has four doors, a remote start, is good in the snow, and decent on gas. I mostly use my car for getting to work (10 minute drive) and getting to my grandparents’ (1.5 hour drive).

I’m not generally a hugely anxious person, but two things that do give me major anxiety are highway/nighttime driving, and dealing with mechanics/garages. I’d like a car that is very, very safe. For this reason newer cars appeal to me, as safety features just seem to continue to improve – but I’m not sure if there’s that much of a difference between 2013 cars and now? For the mechanics/garages thing, leasing becomes very appealing…the idea of never having to worry about repairs makes me swoon, however I do want to make a good financial decision. I have student loans to pay and don’t love the idea of adding a whole bunch more debt.

I don’t care about image, and have always just stuck with reliable Hondas and Toyotas. I do like the idea of a Subaru just because I’m an invisible lesbian and it would feel like a bit of a marker, haha. I enjoy camping/hiking but don’t have a lot of gear or anything. This is mostly city and highway driving (although a very snowy/hilly city, and very pot-holed highways). I also like the look of the Volkswagen Golf. Those are two cars that I know, though I'm open to many!

I can drive stick but don't really have a preference.

So, should I buy or should I lease?
Any recommendations for makes/models once that decision is made?

Thanks, mf :)
posted by EarnestDeer to Work & Money (12 answers total) 2 users marked this as a favorite
I've always looked at the Consumer Reports site to see what new or used autos were the ones to buy. They have charts showing the history of problems for various models and more in depth reviews for a few models.
posted by Bee'sWing at 4:12 PM on October 3, 2017

We had a great experience buying from Carmax if there's one near you. No haggling, no pressure, financing was easy and our payment for a 2012 RAV4 is under $300 a month (that will depend on your total loan, your down payment, and your credit score but obviously it is possible).

I looked on their website to see what was available near me, checked out some consumer reports scores on the ones I liked, and went in to test drive. I liked being able to "shop" online by myself and do my own research ahead of time. I got to drive everything on my list as well as a few others and we ended up getting one of the ones I had favorited online. We didn't have a trade in but it seems like they are good to deal with for that too.

That was the first time I had bought a used car that wasn't a private sale and it was overall very positive. We will probably look there first next time it's time for a new-to-us car.
posted by peanut_mcgillicuty at 5:46 PM on October 3, 2017 [2 favorites]

Why you should (almost) never lease a car.

A previous ask covered purchasing a rental car, which seems attractive.
posted by blob at 6:12 PM on October 3, 2017 [1 favorite]

I did look at cars at a Carmax and they were easy to deal with. However, you still have to do some homework. I found one vehicle that I thought I might like there, but the Carfax turned up a wreck that had some fairly significant damage. Having had serious trouble with a repaired wreck car before, I dropped that one off the list. One thing about buying used from dealers is that they often have Carfax reports available online with the listings. Those can come in quite handy.

You say you want a $300-ish payment. DO NOT TELL THE SALESPEOPLE THIS. Find out how good your credit is, what kind of a loan rate you qualify for, and find out how much of a loan you can handle that will put you in this range (there are car loan payment calculators online that can help you ballpark things.) If you tell a car salesman what kind of payment you're looking for, they'll find a way to get it - or close to it - but it may end up being a bad deal for you. They may extend the term of the loan, or put you in a vehicle that you'll be paying far more than it's worth. There's also something called the "Ten dollar close" where it looks like they're close enough to your payment, just $10-15 over, and that means you're paying hundreds or more extra over the life of the loan. Know your credit, know what kind of loan you can get, and then shop on price, not payment.

Buying used is not a bad thing. You can get a near new car for thousands less. That's how I've bought my last two cars, one of which was two years old with 13,000 miles and the other was three years old with 24,0000 miles. Do your research on car values online, and check history on cars as possible. But when it's time to sign, they're going to give you the hard sell on extended warranties. You may very well have factory warranty left on the car. Extended warranties can cost a lot of money and it's pure profit for the dealer. On the 13,000 mile car we bought, they gave us the horror stories of all the things that could go wrong and we should buy an extended warranty to protect us. I told them that if I was going to pay as much extra as they wanted for that warranty, I could buy the same car brand new and get a much longer and more comprehensive warranty. (This is where doing your research comes in very handy...)

When you ask for pricing on a car, tell them you want the out-the-door price. That price includes all taxes, fees, and any add-ons they want to try to stick you with. If they won't give you the total price of the car, leave. If you're shopping online and trading emails with the salespeople, then they need to give you the outbthe door price. I had one dealer give me a price that was way too high (he was $2000 over another dealer for the same car) and when I told him this, he said "the best deals are made when the customer is here in the showroom ready to buy." No, it's not. One reason to get the out the door price: one dealer gave me a price that was about $2000 over what was advertised and that was after I made allowances for taxes and fees. Why? Because they were charging that for window tint and paint protectant, both of which I could get for far, far less on my own.

Remember this: when you're buying a car, it's your money. Any salesperson that treats you like they're entitled to it gets the heave-ho.
posted by azpenguin at 10:37 PM on October 3, 2017 [1 favorite]

Not sure this will fit your budget, but look for a used Subaru (2015 or newer) with the EyeSight system. Adaptive cruise control makes highway and nighttime driving much less stressful.
posted by postel's law at 5:38 AM on October 4, 2017

If you belong to a credit union, I suggest working with them to get the car loan. They are not trying to make money off of you, and you can get at least that part done in a professional, no hassle environment. Then, when you go to the car lot, all you are working on is the car price.
posted by elmay at 6:40 AM on October 4, 2017

If you belong to a credit union, I suggest working with them to get the car loan. They are not trying to make money off of you, and you can get at least that part done in a professional, no hassle environment. Then, when you go to the car lot, all you are working on is the car price.

There are online calculators -- I used this one and plugged in my current CU used car loan rate (3%), maximum term (72 months or 6 years), and got a $300 payment for a $20,000 loan.
posted by elmay at 6:43 AM on October 4, 2017

I would start by going to some car lots and looking at what's available. I want my next car to be a Prius with good snow tires, because, for camping, you can run stuff off the storage battery. You might quite like a Subaru Outback or Forester for safety, snow/ice and reliability. Remote start can be added; price it and build it into your calculations. I have had good luck with used cars. If you buy from an individual, get it inspected at a local shop. Might cost 25 bucks, but this has saved me from a few nightmares. At a dealership, tell them you will not be buying today, but are definitely going to be buying soon. Look at cars, test-drive any that seem like a good fit. Get the costs - car, title, dealer prep, whatever, and go home to think about it In the US, I use Edmunds to check pricing and general info. I have been called with a lower offer when I left the dealership. Check for any warranty from a dealer. I'd consider buying from an individual as this will be the best price.

Dealerships will want you to finance with them and it will be a Bad Deal. Use a bank. Google will give you a quick loan calculation. You can borrow 10,000 at 5% and pay 300/month for 3 years. I hate long car loans and recommend keeping the loan term as short as possible. So I'd look for a car that's about 11,000, assuming some closing costs. In the US, my credit union is way better than any bank.
posted by theora55 at 7:12 AM on October 4, 2017

Dealerships will want you to finance with them and it will be a Bad Deal. Use a bank.

This actually is not always a bad deal for you. But I would have financing lined up beforehand.If you're buying new or through one of the manufacturers "Certified" programs, you may be able to get some very good financing incentives through the dealer. Also, dealers do have access to a LOT of financing sources. On one of the cars I bought, they were able to get me 2.99% through an out of state credit union. That was better than anything else I could have gotten in town. If you know your credit score, and if you have financing lined up beforehand, they're much more likely to want to play ball. If you're looking at new cars, you might want to look around and see what manufacturers are offering on 2017 cars for incentives to get them out.
posted by azpenguin at 8:36 AM on October 4, 2017

If you're an obsessive over-researcher like myself, you'll enjoy this Long Term Quality Index site with reliability data going back over 20 years. It's especially good at finding the good/bad years within a specific make/model.
posted by sapere aude at 9:47 AM on October 4, 2017 [3 favorites]

Most of these answers sound like good advice, but they also sound like more work than I'm interested in doing, and in that vein, I would second the recommendation to try Carmax (assuming you have them in Canada). I went there about a year ago, full of dread about shopping for a car, and was very happy with the experience. I was able to test drive 3 different cars I was interested in -- a Honda Fit, a Kia Soul, and a Hyundai Accent -- all in the space of a couple hours and all from the same lot. I ended up unexpectedly falling in love with a 2013 Nissan Cube that I am very happy with. As discussed above, the Carmax shopping experience is VERY easy and low stress, absolutely no pressure. I genuinely LIKED my salesguy. I would definitely go there again.
posted by littlecatfeet at 4:15 PM on October 4, 2017

Best answer: There is no Carmax in Canada, and nothing quite like it. Sadly.

Leasing only makes sense for certain circumstances. Are you the kind of person who *loves* cars, only the newest cars with the latest engines and accessories, is always looking to get another car, and doesn't want to drive the same car any longer than is necessary? Then lease, because it gets you certainty on the total cost of ownership for that small time you're driving that car. The extra you pay to lease is what it costs to be *that kind* of car person. But it doesn't sound like that's you. At all.

So: relatively late year (2 to 4 year) car it is for you! And then drive it for 10 more years. At purchase, the steepest part of the depreciation will be over, and you will aim to drive the car until it is no longer depreciating (a fifteen year old Subaru will be worth roughly what a 16 year old Subaru gets). You do not fuss the repairs that come, as they are unlikely to cost more than the extra that a new car would have. Furthermore, they aren't likely to present until years after you no longer have a payment. You are then trading payments for 'maintenance'. (At $300/month, you can bear annual repair bills less than 3600$ and still come out ahead).

If you like a bit more certainty in your life, you can look for CPO cars -- part (most?) of the premium you pay for CPO is the extended warranty that it comes with. CPO cars will cost more than the same year/mileage without the certification, but it's still generally a better value than a brand new car or lease.

Get yourself financing though your bank or credit union first, and hunt for cars based only on price. As others have said, never get into bargaining around the size of the payment. It's ok to take the dealer's credit offer if it is better than what you have pre-arranged, but examine the documents carefully before signing. Do not sign the papers at the dealership on the spot -- you can take them home and give yourself an overnight 'cooling down' period.

When comparing their financing offer to yours, there are some subtleties. Often, the APR will be greater than the nominal rate -- sometimes because buying cash will lead to a discount. (This just happened to me -- the offer was 0% financing, but if I paid cash, I'd get a 1500$ discount. Not having the discount is like paying 1500$ more for the car. Amortized over the life of the loan, it results in an effective interest rate more like 1.5%.)

As for what car you should get, all your options are reasonable and good. But if you're really into driving that car until zero depreciation, the Toyotas and Hondas are likely better bets, the Golf probably the riskiest, Subaru somewhere in between.

All front wheel drive cars will be great in snow *with actual winter tires*. A FWD Civic will be *safer* in the snow than the AWD Subaru if the latter has 'all seasons'. AWD helps you get traction. Good tires get you traction, handling and braking. The cost of a second set of tires is much much less than the AWD premium. Further, if you're rotating summer / winters then each set will last twice as long so the actual extra cost of extra tires is small (though you may have to solve the storage issue and you may want to pay for a second set of rims).

As for modern safety equipment -- such as lane keeping, blind spot monitoring, etc -- all manufacturers have some version of them, generally on more expensive trims. I'm not totally convinced about how much they contribute to safety, compared to legislated changes like impact standards and ABS brakes. Once a system is proven to be quite a bit safer, it tends to become legally required - eg. ABS brakes and daytime running lights. Personally, I prefer a car with very good rear visibility to a car with gunslit back windows and a back up camera.

Semi-professional presentability is not something I would worry about that much. At my work with Giant Corp, I've noticed an almost inverse relationship between car value and job title. Our VP drives an Escape, mid-rank engineers are rolling Audis. *Shrug*. Keep your car clean and well maintained (fix the dents, don't let rust happen) and that should be enough for social presentability.

- Don't lease or buy new. Buy a late model car, CPO or not.
- Get your financing in order, negotiate only on the price.
- Drive the car for many years past having retired the loan. Hopefully until that depreciation curve is as flat as Saskatchewan. Repairs and maintenance are generally less than payments. Maintain presentability by keeping the car clean and maintained.
- Pick a model of each of the Honda, Toyota, Subaru and VW that appeal to you. You like the style, you like how it drives, you like the statistics on long term reliability -- these are all legit discriminants. Drive each -- for as long as they'll let you (like, more than half an hour!) and take the one that appeals to you. They're all good cars.
- Getting a Subaru because it's a lesbian friendly company is a perfectly legit reason. Getting AWD because it snows in Toronto maybe less so. Snow tires >> AWD. If your car turns out to have AWD, you still need snow tires.
posted by bumpkin at 8:02 PM on October 9, 2017

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