Buying a used car

In My Humble Opinion
1

My experience with buying cars in a nutshell –

Prior to 1998: every car I owned up to this point was a hand-me-down from my parents.

1998: Purchased my first car, new, a Ford Ranger

2013: Still have the Ranger. Its time has sadly come to an end.

I’m a graduate student, and I teach a few classes at community colleges. My credit score is good (760, I believe), my income is ok, but I have a lot of student loan debt - like, over $100K. I’m looking for something used, that will last me at least five years. No older than 2004 or 2005, no more than 120K miles on it, I don’t want to spend more than $10K to $12K. My biggest consideration is gas mileage, since I have to drive to different colleges in the area on a daily basis. My credit union has already denied me financing, based on the student loan debt.

One of my problems is that I hate that haggling shit, and really don’t want to do it. I’d prefer to go somewhere and just pay the damn price they list. Preferably somewhere the listed price is the price you pay, such as Carmax. But I’m in Portland, and the nearest Carmax is down in California.

I’m also wondering about a couple of stories my girlfriend’s best friend has told, that I’m not sure I should believe.

She says she went to the local Toyota dealership, and they wouldn’t even talk to her until they ran her credit. When they found her credit was less than stellar, they started jacking up the prices of the cars she’d looked at online. She finally walked off the lot.

She also claims her father’s friend is a car salesman, and this salesman says that a buyer should never mention a down payment until the deal is well underway. For instance, if I’m taking $4000 with me, and I’m looking to spend no more than a grand total of $10,000, I should not mention the down payment, or they will raise the price of the car $4000 so that they can still get their $10,000 loan.

The problem I have with both of these stories is that I can’t see someone arbitrarily raising the price above what’s listed. The prices are listed online, and on the vehicles themselves on the lot. Would they really raise the price and expect someone to just go along with it? Is girlfriend’s friend just blowing hot air?

Also, I’ve been thinking about getting my new (to me) vehicle from a car rental place. Enterprise has a few lots in the area. A good family friend has gotten several cars this way over the years, and has always been happy. Any experiences with this route, good or bad?

2

I am in the market for an SUV right now. I’d rather buy a one-year-old one, but wife is insisting on new, and family peace is worth a few K lost. Anyway…

I looked up Carmax prices. Then went to a Nissan dealership to look at the 2013 Pathfinder and price it. Without real haggling, the price they quoted was within a couple of percent of the Carmax’s and a little lower than MSRP on Nissan web site. Not bad at all…

I didn’t buy that one yet cuz wife wants to look at several other makes, but from that experience I think the ubiquity of the Internet and Carmax and pricing options online etc. have reduced the haggling possible and the stress associated with it quite a bit.

3

If you do go with a dealer, consider bringing someone with car-negotiating experience with you (I speak from experience). Car salesman can be incredibly aggressive, especially if they sense that you don’t really have experience buying from a used dealership.

You can also sometimes get lucky by keeping your eye out for private sellers who want to avoid back-and-forth negotiation and just ask for the KBB value. In 2008 when I was hunting for a used car I kept finding lemons on Craigslist (with dishonest sellers). In a random parking lot I unexpectedly came across a Ford Taurus in good condition with a “for sale” sign on it. The seller said he didn’t want to battle on negotiating, and just went with the KBB “good condition” value. I bought the car and it has been incredibly reliable for 4 years now.

4

Rather than worry about a large down to start, just negotiate with a down that will get you the best rate on a loan - then pay off a big hunk right off the bat (as long as there is no early payoff penalty).

I would be very careful about the history of the car. The used market is going to be impacted by a lot of Sandy cars that have been written off and should have been junked - but instead have had the titles ‘washed’ and will show up for sale in distant states. Check the title and history carefully.

5

I say, don’t buy a used car at all. Buy new. You are right at the edge of the cheapest new cars - you won’t have to squeeze much to get into say, a Nissan Versa, Hyundai Accent or Kia Rio. And since you are primarily worried about gas mileage, those are all great cars for that. Plus, it seems to be easier to get financing for a new car, counter-intuitively.

6

Buy small.
Buy no more car than you need.
Never finance from the dealer.
I went to a Credit Union, & got a great rate. And you can get a loan from a CU, even if you ain’t a member, just like a bank.