FAMILY CAR BUYING ON A BUDGET

You are reading an article on the budget friendly way to shop for a family vehicle.  For more from Budget Savvy Dad visit my HUB, or find more posts about technology here.

THE BUDGET FRIENDLY WAY TO SHOP FOR A FAMILY VEHICLE

When it comes to car shopping, it’s easy to be cynical.  We all expect to be ripped off either on the lot, or while finalizing the deal.  Buying a car takes a long time.  Hours go by.  The sky gets dark.  You just want to take the thing home and you might find yourself agreeing to things, you don’t understand, because it seems to make sense when the guy doing the paperwork suggests it.

I bought a used car last year through a local dealer that turned out to be a mistake.  I was in a pinch and made a hasty decision.   What I did was overreact to suddenly losing my daily driver.  I knew better, but I still did just about everything wrong.

QUICK TIPS BEFORE WE START

Look, not all upselling is bad, not all sales people are crooks and most of car buying takes place long before you ever step on a lot.  It doesn’t have to take up a lot of time, because there are easy steps to car shopping that the internet makes very easy.  If going to a car dealership feels like going against the house in Vegas here are just a few tips to give you more of an advantage.

1) Go in at the end of the month, when the sales people are more anxious to meet their quotas.

2)Get your loan approved somewhere else ahead of time.  You don’t wan’t their financing no matter how good they make it sound.

3) Be aware of potential upselling such as extended warrantees or the notorious rust proofing and know which ones you will agree to or refuse.  If you go in prepared, buying car for your growing family should be a pleasurable and rewarding experience.  Below is an easy step by step guide for a budget friendly approach to family car shopping with some helpful hints you may not have even considered.

CHOOSE 3 TO 5 POTENTIAL CARS

• CONSIDER FAMILY’S PRESENT AND FUTURE NEEDS.  Look at the immediate needs of your family as well as how you family may grow over the next few years.  What problems are you looking to solve and what type of car best deals with those circumstances?
• LOCATION/CLIMATE.  The whether and road conditions you most often deal with should impact your choice of vehicle or features.  We had a really crazy winter in 2016/2017 and I would not have made it through without 4 wheel drive.  Higher suspension may also be a need to meet depending on your road conditions.
• DON’T OVERLOOK MPG.  Everything else might look good on paper, but there is no excuse for bad mileage anymore and you do not want to be gassing up all the time.

 

SAFETY FEATURES ABD FUNCTIONALITY

• SAFETY RATING/FEATURES.  Of course, being a family car, safety is more important than ever.  Luckily cars are safer now, in general, than ever before.  As you way your options of what make/model you want to go with, your finalists should have the highest safety rating.  Also, be aware of safety features of your car and weigh your options, determining which are most important to you as they will impact the overall price of the car.  Another thing to watch for when reviewing safety rating is customer satisfaction rating.  Every car you consider should be very highly rated, or you are setting yourself up for eventual disappointment, or worse.
• INTERIOR SPACE/OTHER DESIGN FEATURES: Viewing your car choices through the lease of your families needs, imagine the target audience for the cars you are looking for and evaluate how closely you fit into that demographic.  This is just a different way of helping to determine what what is important, and it doesn’t always come easily or naturally.

ASSESS BUDGET AND PRICE

• HOW MUCH DOWN/MONTHLY.  Consider what you can afford as a down payment and what you need your monthly payment to be.  The more you put down the better it is for your monthly payments.  Pricing is going to help you narrow your options down, or perhaps even determine your first choice.  The first step to saving money is not looking for the cheapest option, but knowing how much you can acceptably spend.
• KBB VALUES.  When you know how you plan to pay for the car, look up the Blue Book Value for the exact cars you are interested in.  You will get a fair price estimate that you can use for reference and help you further decide what car you prefer.
• LOAN CALCULATOR. Find a loan calculator online to help you figure out what you can expect.  Play with different interest rates so you can see the effect they have on your monthly invoice.

MORE FINANCIAL POINTS TO CONSIDER

• USED/NEW.  When you know your budget it will likely become clear whether you should buy a new car or a previously owned one.  If budget does not dictate this decision but you want to consider all options in order to save more money consider the following.
• BUY/LEASE.  You may not want to own your car at all.  Leasing is the cheaper option when looking at month to month costs.  The car loses value as soon as you drive it off the lot, so it depends on how long after your owned car is paid off you plan to keep it and how well you think it will keep over the years without costing you additional payments in repairs.

SHOP LOANS

• LOW MONTHLY PAYMENTS.  You want to pay as little as possible from month to month without dragging out the term.  It’s math that should add up consistently with banks.  If it’s not, it may be the APR or the banks own fees causing a discrepancy.  All other things being equal go for the best choice.
• LOW APR.  Of course you want a low interest rate, but again, watch out for bank fees that offset the value of a low percentage APR.
• GAP PROTECTION.  Gap protection basically means if you total the car while you still owe on the car, you will not be left making payments on a car you can no longer drive.  Most banks charge for this benefit, but some don’t.
• When you found loan terms you are happy with get approval before going to the dealership.

SHOP DEALERS

• SEARCH ONLINE.  A lot of car shopping can be done without ever going to the dealership.  You only really want to go once you’ve settled on your choice car and the price range and terms you are ready to agree to.  In the mean time search dealership websites for your car and see what they are selling it for.
• CALL AND ASK QUESTIONS.  You can call or email.  I like calling because initiating the conversation makes me feel more comfortable that answering a phone call.  It also means the call is taking place on my chosen timeframe and not interrupting me at another moment.  Find out things you want to know before making the journey out.  Don’t be afraid to be clear about what you want and what you are looking to spend.  You and the sales person have the same goal.  Being negative or adversarial will not get you closer to what you want.
• GO TEST DRIVE YOUR CAR.  When you have all of your information and are ready to buy, take your car for a spin to make sure it is as good as it looks on paper.  Ask relevant questions while taking it around if there is anything you are still wondering about, or if any questions are raised upon seeing and trying out the car.
• MAKE A DEAL.  If you like it and everything is settled, close the deal.

FINALIZE PURCHASE

• UPSELLING.  This part always seems to take forever because they don’t just ring you up and swipe your credit card.  In signing all the paperwork there are always additional costs and fees.  plan for this in advance, knowing that you will be paying more than the agreed price, for things like sales tax that you can’t avoid.  But be aware of everything they offer you and be prepared to decline additional expenditures you don’t want.  Extended Warrantees are typically advised against though they may seem a good idea.  Some other extras you may wish to avoid are VIN etching, and paint or fabric protection, rust proofing and life insurance (due to the terms and exclusions). Some options may be truly a benefit, so be alert and aware as well as prepared.

That’s the process in a nutshell.  Follow these steps, prepare yourself with knowledge about the car, the loan and the needs of your family.  You will save money and get exactly what you want.  One final tip.  If you are looking for a new car, go in August at the end of the model year for a chance to get a better deal.

Thanks for reading my article on the budget friendly way to shop for a family car.  For more from Budget Savvy Dad visit my HUB, or find more posts about technology here.