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One of my biggest accomplishments last year was buying my first car! In April, I purchased a (used) car and paid in cash. This was my first time going through this process so I want to share my tips for buying your first used car.
Set A Budget
First things first: figure out your budget. You’ll need to consider:
- Will you buy a new or used car?
- If it is used, how old are you willing to go? My cut off was 2014/2015
- Do you want to buy your car in cash or are you ok with getting a loan?
- How much do you have saved? I highly recommend not dipping into your emergency fund. It’s better to have a loan than not being able to cover yourself if something unexpected comes up.
- How much more will you be able to realistically save before you want/need to buy your car? I used Qapital to set aside funds each week for my goals.
Figure Out What You Need
In the wise words of Mean Girls: you may think you like some(one)thing but…you could be wrong. While you may want something flashy or fancy, you need to figure out what will actually best serve you. Joe and I wanted a smaller car with good visibility. I didn’t drive during the years we lived in New York City and I was too intimidated to get something too big. We wanted something with a decent sized trunk because we planned to take the car on weekend trips. We don’t have kids or plan to have them immediately so space for kids wasn’t a concern for this car.
Do Your Research
Figure out the price range for the type of car you want. Look online – we used Kelley Blue Book. We figured we could get what we were looking for between $10-20K, which was within our budget. Then go out and check out cars. Visit local dealerships. Take a look at used cars at car rental places. You can also used Auto Trader, Craigslist, and work sales groups. I ultimately bought my car from someone I work with! Also, think about what you need to do to take care of your car. I wrote this post a while back about maintaining your car.
Test Drive, Test Drive, Test Drive
Test drive as many cars as you can. Even if you test drive something you don’t love, it will help you see what features are critical for you. You may think you want a certain car only to hate it when you actually drive it. When you do find something you’re seriously considering, make sure to thoroughly inspect the interior and exterior. We totally forgot to check the ceiling and found crayon marks from the previous owners’ kids after we bought our car. Luckily it was fixable!
Negotiate
Ask for a lower price than you want to pay. Ideally you’ll meet in the middle and you won’t overpay. I was able to knock $1.5K off the asking price by going back and forth with the seller. I used the prices I found on Kelley Blue Book to negotiate. I also had the car inspected before we actually signed on the dotted line.
Plan For Expected & Unexpected Expenses
Obviously cars (especially used cars) come with expected and unexpected costs. Here are some the expenses I had when I purchased my car (including some extras!):
- Registration (expect to pay around 10% of the purchase price) – if you have AAA, you can use their DMV services to handle registration
- Smog check (depending on the make and age of the car) – ours was $70
- Detail (totally optional but it’s nice since you don’t know everything the previous owners used the car for) – we found a local spot on Yelp and paid $200 including a 10% tip
I hope this was helpful and filled with all the best tips for buying your first used car! I may do a follow up post or two on how I take care of my car and/or how I organize my car.
