Cars are a big source of contention in the finance world. It is very easy to make judgments about someone (and their financial situation) based on what they drive, even if we have no insight into their financial world.
Take me, for example. I drive a 2013 Toyota Corolla with so many dents it is probably structurally unsound. I can only imagine what people think when I pull up in my car at the local coffee shop.
In the wise words of wise people, what others think about me is none of my business. What is my business is my growing investment accounts, my very healthy savings account, and the low maintenance requirements for my specific car choice.
I am not here to shame anyone, but maybe help you make a few wise choices when it comes to car buying. Getting a new car is something we will probably do only a handful of times in our lives, so there isn’t really a chance to get good at it.
I recently did a search to see if the age-old advice of buying a $5,000 beater was still relevant. Surprise! It wasn’t. I am 99% sure every car on FB Marketplace under $5K was either stolen or totaled.
Getting Through the Car-Buying Process
So, what is one to do if they are focusing on paying down debt and can’t take on a large car payment? Here are some ways to negotiate during the car-buying process:
- First things first: Do you even need a new car? If you do, do you need the make/model of the car you are looking at, or can your life be just as fulfilling with a different car or different features?
- If you are buying a used car, get it inspected! An auto shop will do a once-over for you for about $100 – $150. I have done this, and it gave me great peace of mind.
- Negotiate on the total price of the car, not the monthly payments. Monthly payments can easily be manipulated based on the length of the loan, which can add thousands of dollars to the final price.
- Interest rates vary based on where you get them. Check major banks, credit unions, and financing at the dealership. Some dealerships will lower the total car price if you get financing through them. If you are planning on paying with cash, something to consider is getting financing and then paying in cash afterward (always check your contract terms).
- Email dealerships asking what their out-the-door pricing is on the make/model you are looking for. Then, email that price to the other dealers in the area until you get the lowest price that one is willing to offer.
- Don’t walk into a dealership until you have lined up all the above. Walking into dealerships can make you excited (aka emotional), and it is possible you will walk out with a car that you didn’t intend to buy, with terms you didn’t negotiate.
Final Thoughts
Though I will probably secretly judge you for your car choice (I have my preferences—we all do), I will rest easy knowing you got the lowest price you could. I don’t know if tariffs will come into play or if prices will rise (again), but I do know that the best time to buy a car is when you actually need one, not when you want one.
The Money Podcast
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