Back in January I wrote about my desire to purchase a new-to-me car. I was struggling to strike a balance between such a big 'want' and continuing to be financially responsible. I made the decision to postpone my purchase for six months and in the meantime, make a car payment to myself.
Less than six months later, I’m the proud owner of a 2012 Honda CR-V. How did I get here and what lessons did I learn along the way? Read on.
The Straw That Broke the Camel’s Back
The tipping point came when my trusty 2002 minivan needed some repairs. The repairs were estimated to cost $2,500 - considerably less than a newer vehicle but still a substantial amount of money. However, after repairs, the value of my vehicle was still going to hover around $2,000. That math just didn't work for me, so it was time to start shopping.
For many, the first step would be setting a budget. Because I had been making payments to myself, I already had an excellent idea of what I could comfortably afford. If you are unsure of where to start, there are several calculators that can help.
My next step was deciding what I should buy. I can’t stress enough the importance of being realistic in your needs. As much as I coveted a convertible, at this point in my life it just wasn’t practical. I spend too much time hauling dogs, kids and bicycles. What I needed was an SUV.
Next, I sat down and made a master list of my ‘non-negotiables’. For me these included a sunroof (if I couldn’t have a convertible, this seemed like a good compromise), heated seats and plenty of cargo space. Additionally, I wanted a model year 2012 or newer, fewer than 75,000 miles and under $15,000. I also wanted something reliable because my plan is to own this car for the next six to ten years.
Let the Search Commence
I spent several weeks combing AutoSmart, asking friends their opinions, reading reviews and test driving a lot of different cars. In the end, I settled on the aforementioned Honda CR-V. It met all my requirements and because I had done the appropriate research, I felt confident in my choice.
I learned a few things along the way that you might find helpful.
- Have enough money set aside for the title, tax and any incidentals or extras. I had intended to use my 'car payment' money for a down payment but I made the decision to use those funds for the tax. This gave me a sense of relief that I wouldn’t have to dip into my savings. I also used some of my surplus to buy some accessories such as all-weather floor mats and install a hitch.
- What about your existing car? Are you going to trade it in at the dealership or sell it outright? Knowing the value of your car will help you make your decision. There’s really no right or wrong answer; just the answer that’s best for you. Consider whether you have the time and/or expertise to sell your car and the personal value to you of simply trading it in.
- Get a quote from your insurance agent. Trust me on this! I found a car I fell in love with but when I called for an insurance quote, the added premium was more than I felt comfortable paying. Thank goodness I checked before going all-in! Keep your excitement in check until you’ve covered all the bases.
- Really do a test drive! Drive on the highway. Test the acceleration. Brake quickly. Test drive in the rain. Are there "blind spots"? Do you have a good line-of-sight? You should be comfortable in the driver's seat.
- Examine the car six ways to Sunday. When I finally found the car I wanted, I examined every single inch – tire tread, brakes, horn, buttons, switches, radio, navigation, Bluetooth, turn signals, windshield wipers and windows. I opened every compartment and I sat in every seat (front and back)! Before I signed on the dotted line, I made sure everything was in working order.
- Sleep on it. After finding 'the one", I didn't just jump right in. I had waited this long, I could wait another 24 hours. I slept on my decision and when I still felt good about it the next morning, I decided to move forward.
- Consider an unbiased mechanic. Although I felt comfortable with my purchase, you might want to consider having a trusted mechanic look over any car you are considering, especially if buying from a private party. Many reputable shops will do a thorough exam for as little as $100, which could save you a lot of money and grief down the road.
A friend once told me, “Excluding your home, your car will be your second biggest purchase.” Just like any other sizable purchase, it’s important to do your homework and make sure you are comfortable with your decision.
Research is easy! Educate yourself and don’t just rely on the salesperson. After all, you’re the one who will be making the car payments.