You've probably heard that a car is the second-largest purchase a typical person makes after their home, but that's not really true. It might seem like it, since the median home price in the US was just under $190,000 last year, while a new Honda Civic starts at about one-tenth as much. When you look a little deeper, though, you'll probably only ever own one home at a time, and when you sell it, you'll get your money back. You might even make a profit on the sale. With a car, though, the life expectancy is just under a decade, it has limited resale value, and many families own several automobiles. Because of facts like these, the actual cost of car ownership over a lifetime can be staggering. More specifically, you can still expect to spend a minimum of $120,000 (in 2015 U.S. dollars) per driver over the course of a lifetime. That number goes up if you trade in your cars in less than nine years or if you drive a vehicle that's nicer than an entry-level coupe. A two-car family who drives a new pickup truck and minivan and trades in every five years can expect to spend roughly three-quarters of a million dollars on their cars in their lifetimes.
So why do we assemble a team of professionals to buy a house and then spend weeks or months agonizing over our decision, but dedicate little more than a Saturday afternoon to buying a car? This guide is meant to help bridge the gap between the seriousness with which we tend to take home buying and car buying.
When you're done, be sure to check in with our loan department before you head to the dealership. We can get your loan secured, walk you through the buying process and make sure you walk onto the lot with confidence and a low rate loan.
Question: Buying a used car?
Buying a used car is a much better value for most people, however. Few products lose their value faster than a car, whose value plummets the minute it's driven off the lot. Buying a one- or two-year-old vehicle can save thousands of dollars off the sticker price of a vehicle; even buying a used version of this year's model can save you a lot of money.
Question: What if I'm not buying from a dealer? What if I'm buying from a friend or off of Craigslist?
Answer: Even if you know a lot about cars, you should take it to someone who knows as much or more about cars as you do. Private sellers and dealers will usually let you take a used car to a mechanic you trust (which is your best bet to make sure the car is in good condition). If, for some reason, you can't take the car to a mechanic, ask for a CarFax report. Many sellers will foot the cost of the CarFax, because they can still use it for the next potential buyer even if you don't buy the car.
Question: Anything else I can do to protect myself?
Answer: No matter if you're buying from a dealer, or a private party, you should always take a car for a test drive. Find a route that simulates your morning commute; don't just go on the route the dealer wants to take you. Take some left turns. Accelerate to freeway speeds. Ride in the back seat for a while. Make sure you actually like the car before you spend thousands of dollars on it.
The first part of buying a used car is all about research and preparation. This is the best way to make sure you get a car you're going to love for a long time, which means the more time you put in now, the longer you can wait until you have to do it again.
In a future blog post, we'll go over the negotiation process, including everything you could want to know about financing. If you're planning to buy a car this weekend, the most important thing to know for now is that you'll want to come see us about our auto loans before you go to the dealership. It can save you hundreds or even thousands of dollars to talk to us first. You can find our rates and apply online here.
Or speak with a Loan specialist at: (559) 737-5777