I bought a car!

Friday was an awesome day for me. I bought my first car!!! Here is how the process went:

  • I started looking at cars from dealerships. We test drove a Hyundai Elantra (too small), Nissan Sentra (ok), Mitsubishi Lancer, Honda Civic Sedan, Honda Civic Coupe.
  • During my run Wednesday, I saw a Honda Civic Coupe for sale in the neighborhood and immediately called the owner to test drive. We test drove it that night, and I fell in love with the car. After test driving so many other cars, the coupe was the king.

Negotiation Process:

  • We looked up KBB and Edmunds value to compare. We, also, saw the car fax to make sure the car had received proper maintenance.
  • We sat down with the private owner and showed him the cash we were willing to offer. Cash talks! The private owner was asking $13,900 for a 2007 Honda Civic EX Coupe with 58K miles, navigation system, leather seats, and sunroof. We brought $12,500 to the negotiation. He, only, went down to $13,000.
  • We decided to walk away from the negotiation to consider the deal. In reality, $13,000 was our max price, so at that point we were ready to pay for it. We called back an hour later to accept the $13K price. We, also, asked for permission to take the car to the nearest Honda dealership to get a Pre Purchase Inspection.
  • We took the car to get a Pre Purchase Inspection ($100). The service department came up with a couple of minor things (brake light, power steering flush, side motor mount replacement because its worn out a little bit, and the need for new tires in the next 5K to 10K miles). The total came up to be $1200. A little overprice due to dealership inflation. However, we used these facts to further negotiate a better price!
  • After the PPI, we sat down with the owner and explained to him what the inspection found out. We convinced him to drop the price by $500. After a couple minutes of agony, he agreed. He signed over the title and we gave him $12500 in cash!
  • We paid $700 in taxes, title, and license (TTL).
  • In total, my car came out to $13,300 ($12500 + $100 + $700). The best thing is that I will have no car loan to pay in the future! The car is all mine :) Evil laugh.

Lessons Learned

  • Dealing with a dealership is a hassle.  They wasted so much of my time with small talk! Plus, they never wanted to negotiate price unless you were willing to sign right then and there. I would have paid more than $15K for the car I just bought. Eliminate the middleman!
  • The process of buying the car was so much easier through a private owner. I think it helped that the private owner lives 3 minutes away from my in-laws. It felt good knowing the money was going to a friendly neighbor. I, also, did not have to sign pages and pages of fine print. When we decided on a price, we made a note explaining how much the car was bought for, and the title was signed over.
  • Always get a Pre Purchase Inspection if you are buying form a private owner. For us, it was a great investment that dropped the price of our car. It paid back in less than an hour. Plus, the things a dealership quotes, can usually be done by you or a trusted mechanic for less. As far, as the tires, I probably won’t need new ones until the winter.
  • Be friendly during negotiations. In the end, both parties felt satisfied with the negotiation. I was happy because I got my car for a great price. The owner was satisfied with the price we offered. I’m sure he was glad to be done!
Meeting my needs and budget
  • I really wanted to stay under $13K for my car. $10K would have been great, but I quickly found out I could not get the car I needed for $10K. I only went over by $300 and I stayed under $15K.
  • My parents did not want me to buy a used car. They really wanted me to get a new car with warranty so I would not have to worry about anything. They suggested I put down the $13k as a down payment and finance the rest. I put my foot down and explained that I did not want a loan and I wanted to stay under my budget.
  • Check out my post Buying a Car Part 1 to see what I originally wanted. I got the best price, great gas mileage, a car that drives well, ok insurance :), and on the plus side, a great interior!
  • I am really, really hoping this car lasts me till 150,00 miles :). Maybe even 200,000 miles!

What do you think???

SavvyFinancialLatina

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13 responses to “I bought a car!

  1. I think you did a fantastic job!!! It’s always nice that it is ALL yours and you do not have to finance it. My friend just put $14k down on a Lexus hybrid. She has to finance $15k over the next few years. I don’t believe in having a car payment so I think you are on the right path. Good for you for disagreeing with your parents :)

    Your car can go above 200k if you keep its maintenance going. My corolla is a 2004 model and is over 100k miles…no major repairs yet. I love it. Saves gas too! All of my BF’s cars have gone over 200k, just make sure to keep watching out for signs and repair it quickly. Congrats!

  2. Fabulous! I had a similar experience in buying a car and dealerships are a hassle, for sure. But having a reliable car is worth it (to me, anyway)

  3. Well done on your purchase. It sounds like you know what you’re doing when buying a car, and not having to use finance is a big bonus.

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