Insights From Our First Car Buying Experience

by AJ Pettersen · 10 comments

Purchasing a car

Last week, I wrote an article discussing what to consider when buying a new car. My wife and I were planning on delaying our purchase, but we had to rearrange our plans when my car had some troubles. After bringing it to the shop, we decided it’d be a better idea to trade it in and get a new car than to fix it.

We purchased a Honda CRV and are very happy with our choice. We now have a car that is safe, reliable, and full of amenities. Now that we’ve completed our first car purchase, I’d like to share some pointers with you.

Research What You Want

We researched the cars for sale in our area and figured out which ones met our needs. As I mentioned last week, we wanted a mid-size SUV with the ability to operate smoothly in all weather. We decided on a Honda CRV with all-wheel-drive, as it offered the best in performance and fuel economy, and it performed well during our test drive.

Be Ready to Negotiate

The dealership where we bought the car operated with fair, no hassle pricing. This meant we got the car for just over the invoice price — more than $1500 less than the average price paid across the country. This took out some of the difficulty in negotiating with a car salesman.

We received a price we felt was fair and proceeded to negotiate the trade-in value of my old car. There wasn’t a ton of wiggle room, as it was a 15-year-old car. We were able, however, to get a few hundred dollars more than the original offer.

If you’re planning on negotiating the price of your new car and the value of a trade-in, you need to do your research. I was pleasantly surprised to see the price of our new car was lower than I anticipated paying. If you have numbers in mind, you’ll be able to present an educated offer.

Understand the Extras

After agreeing to a price, you’ll be sent to the financial services area. This is where you’ll learn what APR you qualify for (if you’re financing the purchase), and what warranties are included. We added a small part to our warranty that wasn’t included in the plan.

You’ll need to stay firm and confident in what you want. Allowing the dealership to dictate what you do and do not need will lead you down the wrong path.

The Bottom Line

Are you planning on purchasing a new vehicle? If so, have you done your research? Being educated is one of the most important things to do if you’re planning on buying a new vehicle. Knowing the average purchase price and the invoice price will be vital. Also being aware of the value of your trade-in is important.

Be confident in your decisions, and be direct when you speak to employees of the dealership. This will help prevent them from taking advantage of you, and you’ll walk away happy with your purchase.

Do you have any tips for first-time car buyers? 

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{ read the comments below or add one }

  • Mike says:

    I’ll be buying my first car soon and I am very excited. I know I will qualify for a good APR but regardless I do plan on putting enough down. Never spend more than you really have!

  • Two more things are important:
    1. Choose your moment. When it comes to buying a car, not all days or months are created equal. In general, the best times to buy a car are (in order) the end of the calendar year (especially the day after Thanksgiving and the day after Christmas), the end of the model year (usually around July, depending on the model), and the end of the month. If you can organize your purchase for one of these times, you stand to get a much better deal.
    2. Plan financing in advance. If you are paying in cash, congratulations: that is a great bargaining chip and you should not drive off that lot without securing a great deal. If you are taking a car loan, get pre-approved before you set foot on the lot. Knowing that you have outside options will incentivize the dealer to give you a better deal.

  • @debtblag says:

    Ah, “fair, no-hassle pricing.” I remember when JC Penney tried something like that and it got their CEO fired.

  • Alex C says:

    I think when first buying a car it is important that your credit score is a decent number because this can save you thousands of dollars down the road (Like what I did there? It’s a pun). Anyways, the better the credit score the lower the interest rate, which will save you money in the long run. If you have a poor credit, then maybe you should hold off on the car just a bit until you can build credit.

  • It’s very important to do the research when buying a new car, when you make large purchases for anything really. Great advice!

  • Like Jenny said, being willing to walk out is huge. Another thing to try is work dealerships against each other. Once we found the car we wanted we emailed two other dealerships we had not worked with to see what they would offer and that info allowed us to go into the dealership we wanted to buy from with info on what we could get it for. It made the negotiation last less than five minutes and got it for several thousand dollars under invoice.

    • KM says:

      Neither of those worked for us. I really wanted to get a Honda Fit, but they wouldn’t drop their price. We walked out and they didn’t care, probably because they had enough other customers, which might be a problem for a popular model. We also comparison shopped and the dealerships didn’t care what the others sold for, making ridiculous arguments that the other dealerships will just rip us off in something else or they are not including everything. Again, it seems like some dealerships have enough customers that they can pick and choose whom to please.

  • Bill says:

    How did you determine the average price paid for the car that you bought?

  • KM says:

    I pretty much stated the first half of this article here: http://moneyning.com/advice/what-to-consider-when-buying-a-new-car/#comment-127230, including being ready to buy earlier than you expect if you have an older car.

  • If you do negotiate, be ready and willing to walk out. That got us fleet pricing on my minivan.

    Also, look for crazy deals . My husband got his Yaris because I found one that the dealership was so desperate to move that they took a loss on it. It just wouldn’t sell at that dealership.

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