Graduated Learning: Life after College

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

Buying a car: updated August 17, 2008

Filed under: Personal Finance — Stephanie @ 5:35 pm
Tags: , , , , ,

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.

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3 Responses to “Buying a car: updated”

  1. Loan-Holder Says:

    Nice blog.I like this post.Keep up good work!

  2. […] 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 […]

  3. […] financing, they actually couldn’t compete with the rate that I was pre-approved for.  I had gotten my loan from a local credit union through AAA.  It wasn’t the best deal, but 4.49% was as good as I […]


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