Graduated Learning: Life after College

I got my degree, I got a job…now what?

Buying a car August 10, 2008

Filed under: Personal Finance — Stephanie @ 12:27 pm
Tags: , , , , , ,

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.

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3 Responses to “Buying a car”

  1. Money Maus Says:

    My advice would be to use Consumer Reports. Read these articles: http://www.consumerreports.org/cro/cars/car-buying-advice/guide-to-new-car-buying/financing/where-to-shop-for-an-auto-loan/0702loan0.htm and http://www.consumerreports.org/cro/cars/car-buying-advice/guide-to-new-car-buying/at-the-dealership/common-car-buying-mistakes/index.htm. (Do your financing on your car BEFORE you go to purchase it at the dealership or wherever. You will most likely save a lot of money and get a better rate.) Most of my friends who have car loans pay 5%+ on them, so I would certainly look out for better rates. Here’s another article: http://www.consumerreports.org/cro/cars/car-buying-advice/guide-to-new-car-buying/pricing/how-dealers-make-you-pay/0702mak0.htm

    Good luck! Hope *some* of this is helpful… this is what I have just learned, not what I have done since I have never purchased a car before.

  2. Craig R Says:

    This looks like a good article describing some of the tactics they use: http://www.cnn.com/2008/LIVING/wayoflife/08/08/aa.car.dealer.sales.tricks/index.html

  3. Kendall Says:

    So i wrote you a response on my blog. didn’t want to take up all your comment space!


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