I bought a car! August 24, 2008

Yep, you read correctly.  I bought a car.  Technically I don’t have it yet (it’s in transit) but I’ll have it in about a week.

I first went to Herb Chambers Honda to test drive a Civic.  When I got back, all I really wanted to know was what sort of price they were going to be able to give me.  But they definitely gave me a bit of a runaround, and I felt very pressured to buy the car right then and there.  I was there alone, and really wasn’t ready to make any decisions just yet.  They kept pointing out that they could accommodate any monthly payment my budget would allow.  I kept asking what interest rates they could give me, or the lowest price they could sell it to me at, and they continually changed it from rate to monthly payments…very sneaky.  Because, as you and I know, you can basically make a monthly payment of any amount, as long as you stretch out the payment schedule long enough.  And who wants to pay all that extra interest?

So, that was Tuesday.  I was busy the rest of the week, until Friday evening.  This time, Aaron came with me.  We went up to Commonwealth Motors.  I took another test drive with the Civic they had available.  The woman that showed me the car was really friendly, and took me around the dealership to see all the benefits they had.  I could tell what she was doing, but I let her show me around.  We started talking about cars, and I asked if they could go any lower on the price.  Like at the last dealership, she got her supervisor, who is more likely to actually make a deal.  So he said he could go as low as $17600, which was okay, with an MSRP of $18,430 or so.  Still, I wasn’t quite ready, and wanted to test drive other cars.

So, Saturday morning, I got an email from Herb Chambers Honda (yes, I gave them way too much contact info).  I called them at the number they mentioned, and the guy got his manager, who said they could probably match the price I got at Commonwealth, and that I should come in.  Well, Aaron and I headed over there, and since his car needed a tuneup, we dropped it off at the nearby dealership, (free parking!  except for the cost of the repairs not covered by his warranty)  and headed over to the Honda dealership.  It turns out that they didn’t have any more of the Civics in blue, which was the color I was hoping for.  They did say that they were willing to go as low as $17550, but that they couldn’t go lower than that.  I wasn’t too keen on buying a car without trying any other types of cars, and I also knew that Commonwealth had a few blue cars coming in, so I figured I’d wait and get back to them.

The manager actually offered to have the salesman drive us over to Herb Chambers Toyota in the manager’s car, which I thought was really nice.  Maybe they were hoping we’d come back, or they just wanted to be good guys, but either way, it was a good thing.

We got to Herb Chambers Toyota and had to wait around a bit.  All the salespeople were busy with other customers.  However, a man named CK, who apparently works more in the internet sales department, saw us waiting and offered to help.  I appreciated that.  I told him I was looking for a Corolla, and he had us go out on a test drive.  I found the car to seem a little more “normal” compared to the Civic, which seemed to have a bit more “space age” look to it, especially when it came to the dashboard.  I also noticed that the Corolla had a smoother ride.  I guess they say that it has a looser suspension, which means you feel less of each of the bumps on the road.  The salesperson at Commonwealth said that that meant that the Civic and other cars that touch the road more are safer because you’ll always be on the ground.  I’m not sure how much I believe that.

So, we talked a bit more with CK, and he was really nice.  I felt a lot more comfortable there than at the other dealerships.  I collected as much information as I could, and then Aaron and I headed over to the Super 88 food connection to grab some lunch.  It was pretty darn tasty.  I was going back and forth on which car I preferred.  I knew that really, it was my decision, not his, not my family’s just mine.  And I really hate making decisions (it took us a while to figure out which place to get food from!)

In the end, I decided that the Corolla just felt better.  The smoother ride and more normal looking/feeling car appealed to me.  Not sure if it was because it was the last car I looked at, but either way, I figured I couldn’t really go wrong.  I figured that if I could get a similar deal on the Corolla as was promised on the Civic, I would be happy.

So we headed back, and CK found a car fitting my needs (the Corolla LE) and was looking for a blue car for me when he found the listing that showed that ZERO blue cars were being made for them.  I’m not sure how exactly that happened, or what exactly that meant, but I had to decide if the color was that important.  Luckily, my second choice, silver, was available in the trim level I wanted.  I opted for the LE over the base (CE) because it had power locks, power windows, cruise control, and a few other options.  Yes it’s more expensive.  But I wanted to be happy down the line.

So I was handed off to the actual salesman, and he was able to give me ~$1000 off the MSRP.  In retrospect, I should have asked if he could go lower, and I’ll probably be kicking myself down the line for not trying to get it lower, but there it is.  I signed forms that scared me, and put down a deposit.  My car will be in off the trucks in about a week.

It’s a strange feeling.  It was such a big decision, moneywise.  I know I’ll be happy in the end, but I also know I probably could have gotten a cheaper car if I had gone for a used car.  I’m getting my loan through AAA, like I mentioned before, and they’ve got a rate better than the dealerships could offer (they don’t have deals on the fuel efficient cars because they’re already in such high demand!)  So, I’ve got to decide the length of the loan (likely 3-5 years).  Luckily, they don’t have any added fees for prepaying (I wonder if that also means if I completely pay it off early they wouldn’t have a problem with it) so I could technically get rid of that debt sooner.  It actually is the lowest APR of all my loans…4.49%.  My fixed rate student loans are at 4.5% (not too much higher) and my variable rate loans are currently at 5% (though that wont always stay).  It’s another barrier towards being debt free.  And unlike education, you can’t quite label a car purchase as “good debt”.  But I do plan on having this car forever (relatively speaking), and so I’ll try to get my money’s worth.  I just need to buckle down and work even harder at paying off my debts.

Next step is getting car insurance.  I’ll let you know what happens with that.

And now it’s time for bed.  I’ve got to get up early for work tomorrow so that I, you know, can make some more money to pay off all those bills.

Buying a car: updated August 17, 2008

So, it seems that there are a few posts floating around the blogosphere about buying cars.  First off, Kendall followed up her last post with a more detailed description and reasoning behind her purchase.  I also saw that Trent at The Simple Dollar posted a discussion on Leasing vs. Buying new vs. Buying Used.  And then The Consumerist linked to a post at the Consumer Reports Cars blog about the most fuel efficient cars in certain cost brackets.  So this has definitely helped me with my decision.  I’ve also found myself looking around at the cars near me on the highway (but I keep my eyes on the road!).

Reading those posts, along with talking to friends and family, I’ve narrowed down my choices quite a bit.  I’m thinking my top choice is a Honda Civic, and my second choice is a Toyota Corolla.  I made this decision based on price, gas mileage, other owners’ experiences, and style.

I’m leaning towards a new car, since I plan on owning a car, and as my friend Patrick said:

Basically my advice was to buy a “lower grade” new vehicle vs. “higher grade” used vehicle. I bought a EX Honda Accord because I was looking for leather and sun roof and speed, etc. In the end I should have bought a brand new Honda civic (or similar) for the same cost without all the amenities. It’s hard to know what’s happened to your car before (mine is fine, but it has some quirks that always makes me nervous when something seems like it might go wrong).

Basically my advice was – if you’re on a budget and you can buy a reputable good car w/o every amenity, that’s better then buying a used car with everything “blinged out”.

I thought that was pretty good advice.  And I agree with him.

As for how I’m going to pay for the car, this is where all the tricky personal finance stuff comes into play.  I’m starting to realize that I might just have to get a loan.  I could technically use up all of my savings to pay for the car, but that really is not the best idea.  And while there is not likely to be a loan out there with lower APR than my ING account is getting, it’s better to have a bit of savings around than to have less debt (in my opinion), mostly because it’s important to have an emergency fund sitting around.  So yes, mathwise, it’s not the best choice, but emotionally and for hedging against going into more debt if an emergency happens, the loan is a better choice than taking all the cash out now.  Besides, I’ll still need to pay for insurance (another whole collection of decisions).  As for where to look for loans, I’ve gotten a bit of advice.  My friend Craig mentioned that he found a local credit union that has pretty good rates, especially if you have another account there, and that the credit union also discounts your rate if you do automatic payments.  And my mother pointed out that AAA (which is probably a good thing to have anyway if you have a car) has car loans for pretty reasonable rates.  So I’m looking at that too.  I’m guessing it’s a good idea to have the loan ready before you buy a car, but I’m thinking I should at least go take a few test drives to determine if I like the cars that are at the top of my list.

Well, hopefully I can get over to a dealership some time this week to get my next car buying step going!

And thanks guys, for your advice!  I really appreciate it.

Buying a car August 10, 2008

So, unlike my last post that merely mentioned cars, this post is actually about cars.  Somehow that post was made one of the top posts on the cars news list list on wordpress, which bumped my stats up a heck of a lot.  Which I found silly, since I didn’t really talk much about cars.

Anyway, so I’m writing this post to sort out my thoughts on buying a car.  With my new job, I really need to have my own car, as I can’t depend on borrowing friends cars much longer.  I know there are so many different things to consider, and I’m never very good at making decisions.  My friend Kendall just bought a car (and wrote a post about it), and she made it seem so easy!  I’ve taken a few steps towards buying a car, such as buying a copy of the Consumer Reports Cars magazine (they also have a pretty extensive website and blog, but a lot of it is by subscription only).  I’ve gone through all the new cars they’ve listed and sorted them out into cars I’m going to consider and cars I wont consider based on price, gas mileage, and appearance.  I know there are more things to consider, but that was my first step on paring down my options.  I know that, besides the cost/gas mileage etc. that I also want it to be a safe car (both for driving and, heaven forbid, an accident), that has airbags and other safety features like antilock brakes.  I want decent trunk space and prefer 4 doors to 2 doors.

Things I’m not sure about:  The maximum I’m willing to spend, how to go about getting insured, whether to do financing, and if I do, then with what organization?, new or used, how to negotiate.

I know for financing that it depends on the deals I can get.  If I get an interest rate lower than my current savings rate (with ING at currently 3%) then I’d consider it (I know that car dealerships sometimes have deals like that).  I also don’t know what sort of loans I’d qualify for.  I probably could also get a car loan from a bank, as well.  I shamefully don’t know my current credit score, so I guess I should figure that out.  If the car is cheap enough, I could perhaps pay it all at once with money in my savings account.  But again, that would most likely depend on what sort of car loans are available to me.

As for new vs. used, I’m worried that with new cars you lose a heck of a lot of the car’s value once you drive it off the lot.  But with newer cars comes more safety features, and perhaps better gas mileage.  On the other hand, I don’t want to spend too much, and used cars tend to be cheaper.  If I bought a used car, I would likely buy it from a dealer that certifies the cars and provides the warranty for it.  But sometimes you can actually get pretty good deals on new cars if the timing is right.

So it’s a pretty big step to take.  I’m trying to sort out all the different factors, but it’s difficult.

What do you look for when buying a car?  What are your priorities?  Any recommendations on a fuel efficient, relatively inexpensive car?  Do you buy new or used?

I just feel so overwhelmed, so any advice would be greatly appreciated.

A trip to the Wrentham Outlets August 3, 2008

So, I may have lived in Boston for almost 6 years, but I have to say, I’ve never been to the Wrentham Outlets.  I’ve been to outlets before, ages ago, but I hadn’t been to the ones that are south of Boston.  Well, I knew that I needed a wardrobe update; my friend Melissa offered to help me with a mini “What Not to Wear” trip.  Except I had to spend my own money.  And I only bought clothes at 2 stores.  And she didn’t make me throw all my old clothes away.  But other than that, it was like the show!  (okay, so maybe it really wasn’t much like the show at all).

I’ve known for a while that my wardrobe needed some improvement.  And now that I’m earning a steady paycheck (I got my first paycheck this week!), I feel a little more comfortable spending money.  Most months, I don’t buy any new clothes/jewelery, and most expenses go towards food, rent, transportation, and the like.  So, I tend not to spend money on extra things for myself, except for dinner out with friends or something like that.  And I also really have an aversion to getting rid of things (what if it fits? what if I need it? I paid for it, I can’t get rid of it!) so, I have a closet full of plenty of free tshirts from dorm events and clothes I’ve had since middle school.  And that’s really not the kind of clothes a 20-something should be wearing on a day to day basis.  Really, I’m just too cheap and lazy to buy new clothes for myself.  And I think I’m so afraid to make any purchase without another person’s opinion.

And so we drove out to the Wrentham Outlets.  So that was a bit of a trek, which meant using up a bit of a tank of gas.  Which is of course counter to saving money.  But I think overall, I managed to buy a lot more for the money I spent.  Overall I spent about $300.  Yeah, that’s a lot.  I spent $200 at Gap on 10 pieces of clothing (khaki slacks, jean skirt, tops), and then another $100 at Ann Taylor Loft for two sweaters and 3 pieces of jewelry.  I guess that means I got things that were an average of $20 apiece.  Could have done better (maybe gone to cheaper stores, but could end up with less quality pieces), could have done worse.  But I think that these are all key pieces for my improved wardrobe.  They’re all relatively solid, basic pieces that can be dressed up a bit with accessories.  My next step is likely to look to see where I can find some cheap but good accessories to pump up the outfits I’ll have.  That and sort out my closet, eliminating (and donating) the clothes that I really should stop wearing.

I’ve come to grips with the fact that I spent quite a bit of money.  But this is because I rarely actually go shopping, and it’s all clothes that I need for work and life as a more mature and put-together looking woman.  I guess the last time I went on a big spending spree for clothes was about a year ago.  Well, looking at my walletproof history, it looks like I’ve spent ~$80 on clothes in a few different months.  But most months in between I spend nothing.  So that’s my justification.  Whether that’s the right thing to be doing, I’m not sure.

How have you all been doing on your budgets?  I know wellheeled was working on cutting out clothing purchases.  And what do you think?  Am I justified in buying all these new clothes?  Or am I a crazy spender like the rest of Americans?

How do YOU choose your investments? August 2, 2008

So, after my post the other day about my 401(k) portfolio decisions, I got some really great input about what to look for when selecting investments. I got some great advice, including to look out for the expense ratio, since that’s going to be costing you quite a bit over the long run.

And so I’m opening up the comments to hear from you. What sort of decisions do you make when you’re picking investments…does it depend on the sort of account (IRA, Roth IRA, 401(k)/403(b), plain old brokerage account, etc.)? What’s important to you? Historical performance, volatility, size, growth/value/blend, actual investments? In the category of “actual investments”, are you concerned about “socially concious mutual funds? I may have shared this before, but I found a neat tool that helps you to find out if there are investments within your funds that don’t jive with your social/economic/environmental goals.

I feel like some of these factors will depend on how open to risk you are, what amounts of money you’re investing, what time frame you’re looking at, and what your goals are with your investment.  But really, I’d love to hear from you on what impacts your decisions on investments.  In a way, this post is a bit self-serving, since I’m looking for the advice.  But I hope others that come here can read through the comments and get some ideas themselves.

Thanks in advance for all your advice!