My Car Purchase Journey

                                                                

On July 14, 2012 I awoke at 4:00am to a loud crash. My first thought was someone was in a car accident and was injured.  I ran outside and saw several of my neighbors outside.  I ran to the next block because one neighbor stated was yelling on the phone at the police requesting a squad car because his car had been hit.  I walked back up the street and another neighbor stated her car had been hit. 

Then I looked and realized my car had been hit too – actually it was demolished.  Both front tires flat, the car was pushed on the sidewalk, the front bumper and front light were totally crushed, the left driver’s side was crashed and there was damaged underneath the car from being pushed up on the sidewalk.  

Needless to say I was speechless and in shock. My neighbor called the police and stated she saw what happened.  Some kids stole a car and lost control on the wet pavement from the rain earlier and hit my car then hit my neighbor’s car across the street, then hit my other’s neighbor’s car in the next block.  They jumped out of the car and ran leaving the car running and their loud music blasting. 

I felt a loss because I had my car for 12 ½ years. We had been through a lot together.  I waited outside for almost 2 hours with my other neighbors waiting for the police to arrive at the scene and provided all of my information for the police report. 

I then went in my house and called my insurance company.  There were very helpful and I was provided with a rental car for 2 ½ weeks. I didn’t wasn’t ready to buy a new car yet so I continued to rent a car for the next 3 weeks.  During that time I asked my Facebook friends for advice on what car to buy.  I got several options. I did tons of research and narrowed it down to 2 choices.  I purchased a Hyundai Accent GLS standard no frills just basics last week. I am not in love with the car yet.  Hopefully it will grow on me.  I still miss my old car.  It had at least another 2-3 years of life left.  

I am grateful that I am in a position to afford a car note and car insurance.  I purchased Gap Insurance in the event my car is totaled.  If I owe more than the car is worth the gap insurance pays the difference plus an additional $1,000 from my credit union towards the purchase or a new car as long as the loan is not paid. If my loan is paid and I get in an accident or my car is stolen I still get $1,000 towards the purchase of a new car.  Here are 12 things to consider when buying a new car:

1. Do Research.  Review consumer reports magazines and website such as Kelly Blue Book, CarMax, Edmunds, and Cars.com.  Use price quotes from online websites to get dealers to match the price or beat it.
   Review your budget.  Review your budget to see how much car you can afford.  Consider insurance, maintenance, repairs and the cost of filling up the tank.  Your transportation costs should be no more than 15% of your total monthly income. 
2. Repairs. Go to small repair shops and negotiate to get a better deal on services.
3. Move Closer.  Consider moving to the city or a downtown area to eliminate the need for having a car.  Consider getting a job that is closer to a downtown area or train station.
4. Set a Price.  Set a maximum price you are willing to pay and can afford without a burden.  Don’t go above this price.
5. Research Lenders. Start with your credit union first.  If you don’t bank with a credit union go to your local branch and apply for a loan. Dealer financing should be a last resort. Be aware of tricks and scams to adjust the price to get you in the car.
6. Ask. About dealer incentives, rebates and discounts.
7. Negotiate.  Don’t accept the first price offered to you.  If you are a woman take your husband, boyfriend, male sibling, friend or neighbor with you to assist with negotiating. Don't fall into the trap of temptation.
8. Offer Cash. Offer a down payment to reduce the total cost of the loan and prevent you from being upside on your purchase due to the additional fees such as delivery charges, taxes, title and registration.  Consider paying in cash to gain more negotiating power.
9. Penalty. Some dealers charge a termination penalty fee if you pay off the loan early. This is a tactic to keep you in debt and help the dealer make money. Request that this clause be removed from your loan paperwork. 
10. Previous Year Models.   Look for models from the previous year or models that have been eliminated or will be soon to get a better deal.
11. Warranty. Ask about a car's warranty.  If the automaker files bankruptcy your warranty may no longer be valid which will instantly increase the cost of getting your car repaired. 
12. Trade in.  Don't trade in your old car. You will get a better deal by selling your car to CarMax, Craigslist, eBay or the newspaper.  You may be able to set a higher selling price than what will be offered by the dealer. Use Kelly Blue Book to determine your car’s value.  Consider the dealer trade-in as a last resort.