Any and all advice for buying a car

January 3, 2022 11:39 AM

If you could pretend you are my parent or older sibling giving me advice on buying a car as I don't have that luxury right now that would be great. My car was (likely) totaled in a bad accident this past weekend and I'm going to try and buy a car for the first time.

I'm bummed that I have to buy a car when I was hoping to drive my Honda until the wheels fell off. I have no clue where to start on looking for a car and there's a lot of information out there from a Google search that I feel overwhelmed. I'm also trying to manage pain from the accident so I don't think I'm thinking straight.

Here's what I know though!
- I have no more payments on my car. It was passed down to me from family (a robust and wonderful little Honda 2012 Civic) and I've made final payments on it a year ago.
- I have USAA insurance. They are covering for a rental car for 30 days.
- I have good credit
- I have some savings in emergency savings which was going to be saved for an emergency... but I guess this is it
- I know this is an awful time to buy a car
- I live in Colorado
- I'm privileged to have my main job be WFH, but my second job requires me to be in person. I am debating if I should wait 2-3 months without a car (after rental car period ends) to see if the market gets any better, but that means relying on Uber which can be costly, or public transportation, which isn't that reliable. Or do I try to buy a car now?
- I know I will likely have to get a loan but I don't even know where to look for that. Do I try to open an account at a credit union? Does the dealership offer loans?
- I think I want another Honda based on the reliability it had and the lower cost of maintenance. I've looked at a Honda CRV. I'm reading that used cars are more expensive than new. Does that mean to not look at used cars?
- I feel really intimidated going to a car dealership by myself. Are there any tips on how to do this?

Thanks in advance~

posted by socky bottoms to Travel & Transportation (25 answers total)

When you're trying to compare prices, look at the total cost. Don't get distracted by whatever the monthly payment is, that's the primary hiding place for extra costs. Don't let someone talk you into monthly payments, don't answer the "what is your monthly budget" question. Ask for the cost breakdown, and do the math to compare cars yourself.

Get an inspection on any car you're serious about by an outside garage, if you have one you trust.
posted by Dashy at 11:47 AM on January 3, 2022 [6 favorites]

Sometimes the dealership offers a better loan (like 0%) than you can get on your own; sometimes you can get a better loan yourself. Start looking into loans on your own first to get an idea.

Loans are another way a dealer will hide extra costs -- a better price but a more expensive loan. Again, ask for the breakdown of costs so you can compare apples to apples.
posted by Dashy at 11:49 AM on January 3, 2022 [1 favorite]

Hi!

Buying a car is super hard. The used market isn't MORE expensive than new, but the discount you used to get from leased / rental cars entering the used car market isn't as large anymore. The question of used vs new will be a little bit closer to a tie than before, but buying used will still be a few grand cheaper no matter what.

If you want a used car, craiglist and facebook marketplace are still king. Your insurance should write you a check for the value of your old car, so you should be able to find one around that value for the same price. Maybe one a bit newer, with a bit fewer miles. That was an easy choice for me to make at the time - you know what you're getting.

If you're ready to upgrade, or looking at a new car, you could definitely use a loan. Auto loans are some of the cheapest money you can get - usually less than the rate of inflation. When comparing loans from one company to another, you want to ask about their initial cost (origination), the interest rate / APR. I've often shown the credit union quote to the dealer and they usually are able to beat it by .25% at least.

Dealerships aren't so bad anymore, but if you really hate it, CarMax is very straightforward no haggling. But that's really most dealers these days.
posted by bbqturtle at 11:54 AM on January 3, 2022 [5 favorites]

I don't have much advice on cars, but I can tell you this: The cars with which I was most unhappy post-purchase were the cars I felt I had to buy quickly for one reason or another. The cars with which I was most happy, were the cars that I took the time to research before buying.
posted by maurice at 11:56 AM on January 3, 2022 [3 favorites]

I know I will likely have to get a loan but I don't even know where to look for that. Do I try to open an account at a credit union? Does the dealership offer loans?

I have an account at a credit union, but I opted to finance my new car (bought with cash from a totaled paid-off car) through the dealership because the dealership offered a 0% (no interest) loan. If you have good credit, Honda may have a loan like this for you.

What worked for me was to decide on the make/model that I wanted with the features I considered "must haves," then do as much negotiating as I could via emails with local dealers. It helped to have two dealerships compete against one another to lower my ultimate price. Plus, I didn't have to sit around a dealership and waste my time.
posted by gladly at 11:56 AM on January 3, 2022 [2 favorites]

The last time I bought a car I got preapproved for a loan through USAA, and took that to the dealership and asked if they could beat the terms/interest rate. They did, so I used the dealer's financing.

You can negotiate the cost of the car completely online/via email if going into the dealership is stressful for you. It is also OK to go to a place like CarMax where you don't negotiate the price. Sometimes people get really worked up about getting the Absolute Best Deal but you don't have to do that.

I have a 2018 CRV which I love, and my son drives a 2017 Fit, which is also a great car. It is hard to go wrong with a Honda.
posted by jeoc at 12:02 PM on January 3, 2022 [4 favorites]

My advice is to build a list of the things you want and need because newer cars are so much fancier than a 2012 Civic, and if you don't have a list of what you require you'll get sucked into the new car feature bloat. Or if you want all those features (no shame in that) you'll get what you want.
posted by The_Vegetables at 12:10 PM on January 3, 2022

I was able to access Consumer Reports magazine for free through my library, and narrowed it down to 2 or 3 cars before I even test drove anything. I ended up buying a Hertz rental car, and have been quite happy with the purchase. If you are buying used, absolutely have it checked out by a shop first. I was able to take the car for a 4 hour extended test drive, and had more than enough time to have it checked out by a mechanic and drive it around some more.
posted by sacrifix at 12:20 PM on January 3, 2022 [2 favorites]

Another vote for getting USAA to pre-approve your loan. You'll know what your budget is. USAA also has a buying service--basically you say "this is the car I want" and let dealers make offers to you.

There are also professional car buyers who can advise you and will negotiate on your behalf with dealerships, and who are wise to the multifarious forms of bullshit that dealers will try to pull. For example: be careful of attractive rates through dealers: they will sometimes try to renege after the deal and put you on a more expensive loan.

Make a list of needs and wants for the car, ie, "my car needs to be able to seat X people," "my car needs Y cubic feet of storage." This will help you focus your search.

Educate yourself as a consumer. Test-drive as many cars as you have patience for, to help you figure out what you like and don't like. Pay for a month's subscription to the Consumer Reports website. Check out reviews of cars on edmunds.com (also a good place for window shopping).

Once you have the keys in hand, call your insurer and put the car on your insurance before you drive off the lot.
posted by adamrice at 12:22 PM on January 3, 2022 [1 favorite]

This article, from the Toast, was very helpful to me in buying a car without the dealership stress.
posted by quadrilaterals at 12:30 PM on January 3, 2022 [3 favorites]

If you are a member of Costco, their auto buying program is excellent. My daughter paid for the annual Costco membership and still came out way ahead. It’s super easy, all online. When she knew which vehicle she wanted, the dealership delivered and left the vehicle to test drive, then picked it up. The only face to face was signing paperwork, and they came to her to deliver the car and get the papers signed. She also did the financing through the dealership (Mazda) which was completely contact free. This was in early 2021.
posted by kittygrandma at 12:37 PM on January 3, 2022 [2 favorites]

My loan is through USAA and it was difficult to actually get the dealership to let me use it. They want to finance your car. It was annoying. I wanted a smaller loan on an older car and I did not want an on-going relationship with a random car dealership. The dealerships I visited and ultimately bought from made it seem like it was pretty unusual to do that, which surprised me. It all worked out but I had to put up a little fight.
posted by jeweled accumulation at 12:39 PM on January 3, 2022 [1 favorite]

Even if you aren't financing, expect a dealership purchase to take a while. There's just tons of fiddly paperwork, people moving stuff around, etc. We typically pay cash for vehicles and it still can take hours.

The CarMax process was definitely less annoying than a traditional dealership, and I don't think the price differences are all that much. Plus if you make a request, they'll bring cars in from nearby locations for you to test drive, usually with no charge.

My biggest advice would be that if something feels shady, it probably is, and always be willing to walk.

At one lot, we were ready to make a purchase. Then all these fees kept getting tacked on, to the point it added nearly 30 percent to the cost of the car. It seemed strange to me, and as I asked questions all these men started being brought in the room to loom over us, breathe down our necks and argue.

I looked at my husband, said, "I don't like this, let's go," and we walked/waddled out (I was six months pregnant).

Then we went down the street to CarMax and got a better deal on the same car, no badgering.

(It was an Elantra hatchback, which is zippy and awesome and I'm sad they don't seem to make it anymore.)
posted by champers at 12:40 PM on January 3, 2022 [4 favorites]

From what I've read/heard, the short inventory of new and used cars won't improve until 2024, so waiting a few months probably won't help you.
posted by shw at 1:15 PM on January 3, 2022 [2 favorites]

The car service at USAA sounds like that at some credit unions here - basically, they do the shopping but you must borrow through them. It can be pretty easy, maybe you want to go that route. But if not, tell the dealer you've already got the loan lined up from another source and if they don't stop pressuring you to finance there, you'll walk away - and then do it. There's usually another dealer down the road somewhere you could take an Uber to, or a bus.

Also want to say - if the 2nd job is not horribly far, maybe walk to/from work. I did a 3.5 mile walk to work for a year (returning home via bus). Yes, I had to leave the house 90 minutes or 2 hours before work started, but the walking had health benefits which offset that. Of course, your climate and weather may vary (and I did have to either take the bus or get a ride from someone if it was raining) .
posted by TimHare at 2:26 PM on January 3, 2022

If you don't buy a car now, can you afford to not have a second job? If so, strongly consider that option. If you end up not liking that lifestyle, you can go back to working more and buy a car, or use Zipcar/ rideshares if that makes more sense.
posted by metasarah at 3:18 PM on January 3, 2022

It's a good time to buy new since the used market is very pricy.. In some cases it might just be a couple thousand bucks for new vs used. When my Civic was totalled at the beginning of 2020 I ended up buying new and going electric, and have been loving it. I went with a Chevy Bolt having previous good experience with the Volt plug in hybrid. I looked at the Clarity which is Honda's plug-in but it felt too big for me coming from a Civic.
posted by reptile at 3:19 PM on January 3, 2022

Dealerships make all their money on financing. Don't tell them how you're going to pay (cash or outside loan, not their internal financing which is usually a bad deal) until they've agreed on a sale price. Don't volunteer information in general. They will break down the price in a variety of ways to try to confuse you, upsell on things like floor mats, etc.

Can you bring a friend to the dealership? My dad always told me they have recording devices there (paranoid? Not sure) so we always went off-campus to discuss the offer amongst ourselves.

I also had a good experience with USAA's car buying service, it cut out the haggling, meaning less attempts for the dealer to bamboozle you. They will sell the financing and extra maintenance packages very hard as a result, however -- be aware and make a decision ahead of time about whether you want that stuff (my decision was no) and stick to it!

I also got my loan through USAA but that might be sheer laziness on my part, I didn't shop around. Is USAA giving you a payout on your totalled vehicle plus 20% extra or is that not in your policy?

I don't know about other makes, but used Toyota Tacomas are very expensive where I live, so I bought new for the first time in 2020. Used and new loans may have different rates, with used having higher interest, so that affects your situation too.

Normally I'd say to go in the last 4-5 days of the month. The dealer needs to get cars off the lot to avoid taxes and fees, and you might get a much better deal. However, I know you have a time constraint on your rental.
posted by cnidaria at 4:19 PM on January 3, 2022 [2 favorites]

CarMax is the least intimidating car buying experience you can get. There might be a small price difference but it will be worth every penny to not be pressured or gamed.
posted by sageleaf at 4:33 PM on January 3, 2022 [2 favorites]

Get pre-approved for a loan and buy gap insurance to cover the loss if (heaven forbid) new car is totaled before you pay off the loan. If you are not sure which make and model you want, go to CarMax so you can test drive a variety of cars in one visit. This does not mean you have to ultimately buy the car at CarMax if you find a better deal elsewhere. Good luck!
posted by fozzie_bear at 4:36 PM on January 3, 2022

Oh, and just because it was mentioned above -- USAA's car buying service does not require you to get a loan through USAA. You can pay cash, you can get a loan at your credit union, they don't care. You just have to be a USAA member.

It also sounds like CarMax and Costco are good options for avoiding some of the dealership drama from reading other people's comments, but just wanted to clarify that bit!
posted by cnidaria at 5:06 PM on January 3, 2022

I bought a car this summer and there were supply chain problems, there was not that much new inventory in the area. A complication. I got lucky in that I found a car I like.
posted by thelonius at 6:14 PM on January 3, 2022 [1 favorite]

USAA's car buying service is dead. For the last good while it was rebranded TrueCar.
posted by GCU Sweet and Full of Grace at 5:48 AM on January 4, 2022

I have used CoPilot to buy my last two cars and I’ve been VERY pleased with it. I got great deals with both. I like the analysis it does on why a particular car is rated to be a fair/good/great deal which helps on the negotiation. With one car purchase there was some sort of price mistake (in my favor) and the CoPilot people helped me verify it and then I got the dealership to honor it.
posted by emkelley at 7:50 AM on January 4, 2022 [1 favorite]

Get your car loan pre-approved through somebody besides the dealership, so you get a better estimate of what you can actually afford. The dealership will try to stick you with the largest loan they can, because that's how they make money. Don't tell the dealer this so they don't try to stick you with fees that basically amount to what you would have paid them in interest. Negotiate the total price, not the monthly payment. Then pay with the check from the pre-approved loan.

Also, it's OK to mess up a bit. Don't beat yourself up if you can't beat a business dedicated to tricking customers.

Get the car checked out by a mechanic you like and trust before buying. This especially applies if you're not buying from a dealer, but I've known people who got lemons from Carmax, etc. No seller should quibble about this; if they're leery of it, that's giant red flag to not do business with them.
posted by Ahniya at 12:22 PM on January 4, 2022 [1 favorite]