Buying Your First Car
By Jeremy C. Wright | Related entries in AutomotiveMike posted his response to one of the questions raised in “Ask the Wealthy Bloggers” (post your own if you have any):
What’s your advice for students looking for new(er) cars? Tastes change, I don’t think I want to try to re-sell a car in a year or two. Plus, is there a good way to go about looking? Online? Offline? Financing? etc.
When we bought our first car, we were 20. We weren’t in school, but we weren’t exactly living the high life. We were in that precarious state that most people find themselves in between having debt and having attained financial independence and freedom.
We weren’t massively in debt, our income was growing, we had 2 jobs and no kids… But things weren’t exactly rosy either, since neither of the jobs paid more than 12$/hour.
So we started shopping. We looked at new cars and realized that while we could probably “afford” some of the cheaper ones, we’d probably be unhappy (at some point over the 4 years) with the lifestyle choice we’d have made.
Our next step was to look at truly low-end cars (in the 500-3000$ range). We figured that even if we budgeted 100$/month for repairs and whatnot, we’d still come ahead due to less insurance, no financing / leasing charges and a bit more freedom to choose make and model.
Ultimately we decided to get a 3 year old Toyota Echo, primarily for fuel efficiency, but also because we felt it was halfway between a “new” car (500$/month in costs) and an old car (200$/month). The overall cost of the car ended up being about 350$/month, which was enough for us at the time.
Looking back, I still wonder what would have happened if we’d bought a much older car, saved up a bit, bought a slightly newer car, etc.
Right now we have a 2004 Hyundai Sonata GLX on lease, for about the same price as the used Echo on financing, and it’s serving us well. We don’t drive much, so the mileage limits don’t affect us, and it’s a “nice” car.
What was your first car, and what’s your first car story?
This entry was posted on Thursday, July 7th, 2005 and is filed under Automotive. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.
July 8th, 2005 at 10:44 am
I’m not a fan of leasing. I guess it’s fine if you feel you need or want to be driving a new car every year but as you say you’re paying $350/mo for the privelege. There are plenty of 7-10yr old vehicles that still look good and are pretty reliable.
My last car was a ‘92 Accord EX which had decent styling (in my opinion), A/C, power windows & locks and a sun roof (which I didn’t really care about but was a nice extra.) It was still going strong in 2003 until a woman drove into the side of it totalling it.
My current car is a ‘96 Honda Civic SI (went a little sportier) again with all the options listed above. My only costs are ~$80 for insurance + the cost of gas.
Of course the key is to make sure you’re buying a quality car by doing some research on these older model cars. I’d rather buy an older car with more options and pay for it in cash or at least get it paid off in a year or so and let someone else pay for the majority of the depreciation…
July 9th, 2005 at 3:31 pm
Yeroc, agreed. Our next car will likely be a 5+ year old used car, for exactly the reasons you stated. Unfortunately, we had to buy a car in a 24-hour window, and the lease on this one was one of the few we could afford (while still being happy with the car).
July 9th, 2005 at 9:11 pm
Hi, after just buying a ‘04 VW Jetta GLS 1.8T (turbo) wagon with the automatic sport shift. I sometimes wish I had opted for a used Acura without the hefty $25k loan.
July 10th, 2005 at 11:23 am
my first car was a 1953 plymouth, which i bought in ‘58 for about 75 bucks. it had a large hole on the floor on the front passenger side. (i watched the road ahead, the passenger watched it below!) it used more oil than gas when i went to see my girlfriend at college every weekend. and at 17 years old, it was a dream come true!
July 10th, 2005 at 4:13 pm
The best advice I have heard in purchasing a car is to go through the head office in your country for the brand you are looking for. You find less of the BS you will find yourself dealing with a Car Sales ppl…buncha crooks.
You can get a great deal on whatever brand of car you are looking for through the head office, and you should look for DEMO or LEASED CARS (not to lease them, but that have been leased and are for re-sale dont get me wrong on that)
I am currently interested in purchasing the following, http://www.mitsubishicars.com/endeavor/index.html through the HO (head office), I have been lucky enough to get the number for one of the managers at the Head Office in person to call him to get the price. He has also advised me to look into the new Eclipse that he would be willing to work out a good deal for me. So now, I just gotta find the time to do my re-search and see that I get the best deal.
So, my advice, as mentioned, go through the head office after you have dealt and talked to the sales people in the dealer ships.
Good Luck.
July 10th, 2005 at 4:17 pm
Oh, and make sure when you do speak to the sales people at the dealerships, get a the sales person business card as well as the piece of paper with their proposed price, proof is better than just your word.
July 10th, 2005 at 8:55 pm
My first car was a ‘71 Oldsmobile Delta 88 Convertible, with a 455 V8 engine. The thing got gallons to the mile and could reach 120 mph with ease.
Sadly I cracked the block in my 16 year old foolishness, but it was a great ride for $600.
July 11th, 2005 at 6:03 am
My first car was a 89 Honda Civic DX Hatchback. My dad brought it for me the day I turned 16. POS by today’s standards by I loved that thing. I wish I still had it.
Leasing is good if you like to flip cars every few years. I own my 02 S2000 but my 04 M3 is leased. I intend to keep the S2000 forever but plan on returning the BMW at the end of its lease term in 2007 for the new model M3 due to come out the same model year. Cars are never a good investment, unless you buy a Ferrari. Under the certain circumstances, leasing is cheaper than buying.
I would stay away from demo’ed cars. They are not broken in properly, ragged on by customers during test drives and the sales people.
Buying used formerly leased cars are a good option. Usually leased cars are re-conditioned and re-certified when returned. Plus the dealer will usually offer an 7 year/100K mile extended warranty with it.
Hmmm, I never knew you could purchase a car through the brand’s head office. Normally they only provide post-purchase customer service.
July 12th, 2005 at 12:48 pm
I can agree with the demo cars, but if you want a good deal on a car in great shape, look at executive driven cars. One of the perks of management at dealerships (or at least ownership, depends on the place) is that the company execs get to drive a new car every year. The car is always taken care of exceptionally well since the execs have access to the dealer mechanics, and it is always sold at the end of a year because the owner/manager wants to always drive a new car.
I have not personally gone this route but I know those who have and they can save quite a bit on a very well maintained year old car.
July 12th, 2005 at 2:55 pm
To be honest, I didn’t know either, until a client told me that her husband bought it that way and then I had the actual manager approach me and i verified it with him and he confirmed that you can. So, I would try all alternatives but make sure at the end of the day you speak with people that know what they are talking about rather then people that will sell you complete shit and a hole in your pocket ;).
July 14th, 2005 at 8:47 am
Until we moved to the Atlanta area at the beginning of this year, I had been buying used Hondas, Civics and Accords, for my wife, my self, and our two children, from the same salesman, Bob Anderson, at the same Honda dealer, Westside Honda, in Knoxville, Tennessee, for the last thirteen years.
I never bought a car newer than three years old, and never paid more than $6,500 total. I got good, clean cars, and never had an unpleasant surprise about the mechanical condition of one of them. I always did my homework before going in to see Bob, always discussed the purchase budget beforehand with my wife, and always left Bob “to sleep on the decision” after we’d found something that fit our needs and dickered our way to a price. That last line got to be a private joke between he and I over the years.
We’ve always kept the oil changed on our cars, and performed other recommended maintenance an repairs at a local, non-dealer auto shop. I put 290,000 trouble free miles on one of those cars, and was looking forward to rolling the odometer over to 300,000, but I bumped a steel pole in a bank drive-through window, and our insurer totalled the car and paid me off.
It’s been years of hassle free, economical motoring for us.
July 14th, 2005 at 1:54 pm
Lease your first Acura or Honda for 36+ months and 15k miles / yr. Walk into the dealer in October and tell them that you are not interested in the newest model year. Wash the car 2 times / mo. Wax 6 times / yr. Have your oil changed every 5k miles and serviced at a local shop (not the dealer). If you still like the car in 3 years offer the leasing company your contract price less $5k. It will cost the finance company more than $2k to remarket the car. You can always make more money. Why tie-up 10 or 20k into something that can roll down the driveway?
November 8th, 2005 at 4:09 pm
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March 31st, 2007 at 4:05 am
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You so right, i just dont understand why people are still doing it…