Car buying basics

I’ve never owned my own car. My parents have always supplied me with wheels, but I’m 22 now, I make a decent living, and the free ride has come to an abrupt halt. I’m planning on leasing my first car in the next few weeks to months. I’m looking at used cars and SUV’s in the $20,000 range. Right now I’ve got my eye on a 2001 Nissan Pathfinder LE. Is it possible to keep my monthly payments below $350 for a 24 month term?

Basically, I’m extremely new to this… What are the nuts and bolts of buying a car, particularly a used car?

Autotrader.com has many excellent research guides and pricing information. There are also links to finance sites that will be glad to price things out for you.

Many other car sites do also.

Surf the web, see what’s out there. Look in your local paper – are those cars being advertised at those leasing rates?

Also, you can generally only lease a new car, not a used car.

Financing a $20,000 car for 24 months will indeed cost more than $350/month. There are lots of finance calculators available on the web, so maybe you should mess around with one to see what your comfortable with.

FYI, $350/month for 24 months buys you somewhere around $7500 worth of car. $350/month for 60 months will get you around $17,000. So, something’s gotta change if you really want that Pathfinder.

  • Do not trust the nice man at the car lot. His job is to extract your money, and as much of it as possible. NOTHING he explains or promises matters, unless it’s in writing.
  • Used is good. A major part of depreciation takes place in a very short time, so a car that is 2 or 3 or 4 years old is a much better deal than a new one.
  • For best return on investment plan on driving the car ‘till the wheels fall off.
  • Don’t lease. Overall, it costs much more than buying. In general, cash is best. Failing that (and I usually do!) financed a credit union is next best; they exist for the benefit of the members, in contrast to financing at the dealer. Did I mention yet that the dealer’s goal is to extract as much of your money as possible?
  • If you are a member of a credit union or have a good relationship with your bank, ask them the value of a specific used car. They can tell you pretty closely. You can also go to several Internet sites (Edmonds.com or kbb.com) for values.
  • Lots of cars that were leased for a specific term are available now since the buyout value specified in the lease was much more than the current market price. This is good for you. Look for cars that were especially popular for leasing about three years ago to be particularly good deals.
  • Get YOUR mechanics opinion on any car you are considering. This will cost you some money, but may save you a lot of money.
  • Carfax.com – about as important as the mechanics opinion, for a used car.

Not an exhaustive list, just a few tips.

[nitpick/correction]
It’s http://www.edmunds.com – with a ‘u’ not ‘o’.
I’ll reserve opinions for when/if this gets moved to IMHO since we’re already skirting the edge of GQ…
[/nitpick]

A great web site is www.carbuyingtips.com . There is a wealth of information about what to look for, how to finance, how to avoid playing games.

I used their advice when I bought a new vehicle last year. I made such a good deal that when, 10 months later it was wrecked, the insurance company paid me more than I had originally paid for it. That blows a hole in the “depreciates the minute you drive it off the lot” theory.

Try:
carbuyingtips.com

For a young person in your position, I strongly suggest a vehicle older than 2001.
Nissan, Honda, Toyota and a number of other carmakers make vehicles reliable enough that you can get a far better deal on a '95-99 vehicle and still enjoy it for many years going forward without incurring extreme maintenance costs.
Get your financial affairs in good order before you start buying cars only 3 years old, or new. Most guys at age 22 don’t have, for instance… 3-6 months pay in a savings account, a good 401K started, etc.

Why buy someone else’s problems? For $22K you can buy a brand new Honda CR-V.

Edmunds is a good site, as is www.intellichoice.com. Do your homework; know what the vehicle is worth; stand your ground with the salesman; take someone with you who is more experienced in dealing with car salesmen; if you buy used, look at the Consumer Guide list of used cars you should never buy; comparison shop, get written quotes, play dealers off against each other.

The Bible as far as I’m concerned. I’ve bought two cars using the advice in this book and can’t recommend it highly enough.

Sure you can keep your payments under 350 for a 24 month term. You just need something cheap. Take the calculations from GMBuyPower.com:

Lease a Cavalier for $334.45 per month with little down.
Smartbuy (loan with a balloon) for $330.68 per month with little down.

Sure, you’re talking about a Cavalier, but it’ll be a good car for the 24 months you’re interested in. Probably get something similar on a Focus, which is a much higher quality car by the way.

At risk of getting us moved to another forum, you only get screwed on a lease if you let yourself get screwed on the lease. In theory they’re identical to a sale if you don’t let anyone play numbers games on you. And they’re convenient. And no, I don’t currently have a lease, but I’ve had them.

If you want an Excursion, well, yeah, I imagine you can get your target payment at 24 months if you put $30,000 down. :slight_smile:

A lot of people will tell you not to be a payment-oriented purchaser, and focus on the sale price. Yeah, okay, while not practical advice, they have your interests at heart. So, take your desired payment, multiply it by your term (accounting for interest, you have Excel or Appleworks, right?), and there’s your highest price. Don’t exceed it, regardless of what the salesman says.

Also, where are you located? If it’s someplace near Michigan or any auto plant, you probably know someone that can get you the equivilent of the “friends and neighbors” discount. No haggle shopping at a danged good price.

Also try Kelly Blue Book or KBB.com.
You can plug in a vehicle make, year, milage, and condition and get an idea of what you can expect to pay a used car dealer or previous owner that’s fair.

Real life experiences from the not too distant past:

Used car prices and Kelley Blue Book

Used Car Price Negotiation

Note that Kelley Blue Book, Edmunds and NADA are all iffy to rely upon.

Regrettably, I can’t find the most important car-appraisal tip thread to which I contributed–lieu, was it yours?–but the trick is to be able to identify and elucidate the basic potential problems a vehicle may have and note your concerns as you negotiate your deal with the salespeople.

If you don’t know the car you’re going to buy, what goes wrong with them, and how they typically fail or get damaged, you’re not negotiating fairly.

For example, if you check the paint-line of a Nissan 300Z from the 1990s by running your finger along the door jambs to see if there is a raised line where the new paint job terminated, you’ll likely find it’s been repainted, because when that car was tested beyond its limits, it tended to break loose and put it’s ass-end into whatever tree or telephone pole it was passing, and that seemed to happen every time Dad lent his Z to the kid. Worse, you have to check for the factory paint line which is also in the same place. So you have to look for a double paint line, which is far less than a milimeter thick and, if the vehicle has passed through the hands of a true expert, indiscernable.

That line in turn indicates that the car’s suspension is likely rebuilt, according to the personal acumen of the repairman at hand. That’s extremely risky, and should be counted against the value of the car. A shade-shop with an excellent painter and mediocre mechanics is the very worst kind of place you can see, and I’ve seen 'em.

The problems are confined to the individual makes and models, which one needs to study in advance. And they’re not just problems; they’re issues of basic understanding about what you intend to buy.

I learned this to my considerable experienced car-appraising embarassment when I counted five plugs on a Jeep distributor cap and couldn’t see the sixth because it was at night and cold as hell and out of view. It turned out to be a four-cylinder Jeep, rather than a six, as my beloved better half is occasionally wont to remind me. She fortunately has used her considerable persuasive skills to make that benefit her, as the sale bordered upon fraud, but my errant appraisal of such an obvious thing (and the fact that our dealer was willing to allow my error to persist until the papers were signed) is the root of the problem.

Here’s an observation which might be a GQ in itself: when I worked in a dealership which sold Range Rovers, it was rumored that other emerging SUV-makers were voiding warranties for taking the vehicles off-road or on the beach. I’m not kidding, I heard 'em, but they probably fall under Chuck Close’s “Cant Possibly Be True” heading. Do I know if it’s true? Certainly not. But if you take the time to check your potential mark’s warranty policy, and lie on your back to see if mud is lodged in the underbody (which auto detailers often neglect to remove), you might be able to extract a major concession from the dealer (and potentially pay the price if you don’t unload it at the right time). Or, a no-sale until the dealer can find a less clever buyer.

Whatever you do, don’t let your salesman make your spouse cry during negotiation of the sale. I’ve heard so many stories of salesmen saying, “well then I guess you’re not getting the car,” and having the rattled spouses agree to the bullshit deal in order to defuse the short-term crisis, rather than win the larger war. Used car salesmen are often considered disreputable because, like film producers, many of them are. Find out about the dealership before you buy, if you can. They are most certainly not created the same.

By the way, the salesperson might not have been the greatest and hopefully merely uninformed, but the manager of the used car lot at Darcars in Upper Marlboro, MD? Man, that guy has a heart of gold. Truly a saint, when he didn’t have to be.

Sofa King, I did have one on negotiation but didn’t see you in it. It’s linked to in the hop it’ll provide some help in cainxinth’s quest.