How to Buy a Car

I made it to age 32 before buying my first car, but last week I finally pulled the trigger and did it. I’d heard good things about the Acura MDX from a few people, and after test-driving it and the Toyota Sienna minivan, I decided that I just didn’t want to do the minivan thing. So then it was on to agreeing on a price.

I have spent the past year reading personal finance literature, so I had lots of advice going through my head on these matters. The most sensible piece of advice was to pay cash. Cars are a depreciating asset — unlike a business, an education or (one hopes) real estate — so it rarely makes sense to go into debt to purchase one.

I was agnostic on new vs. used. While the usual financial advice is to buy used, I soon realized that this is because the assumption is that a used car will be much cheaper (thus increasing the chances you’ll pay cash). If you buy one that is more than 5 years old, this can be true. On the other hand, if you are looking for one that is less than 3 years old, and you know the model you want, this all becomes fuzzy. In the past few years, car manufacturers have learned that the way to combat the transparency of pricing the internet allows is push “packages.” These did not seem like a good deal to me. The “navigation” package, for instance, would add several thousand dollars to the price tag, but the only feature I needed was what a $150 Garmin could do. So I just bought the Garmin! The “entertainment” package had slightly more going for it, but I decided that I survived childhood car trips without a built-in DVD player in the back seat, and my children will too. As it is, a portable DVD player can be purchased quite cheaply — much cheaper than the package cost (and I wasn’t going to appreciate the extra speakers). Higher-end car makers include things like leather seats and sunroofs automatically, but with more mainstream car makers, you can see prices go up quite a bit for these things too. Since I imagine these packages are where big chunks of a car’s margin occurs, dealers push them hard, and a lot of people take them.

The net result of all this is that the available used cars I found while looking online in a 100-mile radius around my home were often just as expensive or more expensive than the new ones… because they included packages that I didn’t want. The 2011 base model, on the other hand, was a commodity, and one any dealer could get on the lot quickly.

So I got the names of several dealers within a 100 mile radius, and asked for price quotes on the base model. I wanted to do business with the local dealer (where I’d done my test drive) but their listed price was on the high side. Within 24 hours, I had quotes from a number of other places, including 2 fairly low ones (not much above dealer invoice — something that is also fairly transparent now) within $50 of each other. I took those quotes to my local dealer, who termed the pricing “aggressive” but agreed to match as long as I took a car that was on the lot. I didn’t have my heart set on a particular color, so that was fine. I paid my money, and they delivered the car the same day.

I was pleasantly surprised with how easy this was. I was able to do everything over email, which removed any of the usual difficulties of negotiation. I got a reasonable price. And I like my car! There are many reasons to like the internet, and its ability to save us time and money in car purchasing is yet another one.

How did you go about buying your most recent car?

(Photo courtesy flickr user Damien_p58. Now I need to drive my car to a similarly beautiful spot!)



One Response to How to Buy a Car


  1. Denise R says:

    We also did online pricing and went to the dealer who had the best offer. I really wanted the dark red Odyssey, but as you said about packages, that wasn’t available with grey interior, only beige. (beige doesn’t seem like a good seat color for any car that is designed for hauling kids around) I REALLY wanted a sunroof, but as you said, to get that, I had to have the leather seats, which I didn’t want, but I now appreciate the ‘heatedness’ in the winter. The navigation and entertainment packages weren’t worth it to me either, as we already have a GPS. We chose another color off the lot, as if it wasn’t the red, it didn’t matter much.