I owe her a car

I promised Girl Ninja that I would put the extra money I made while in Korea, in to a special savings account specifically designated for the purchase of our next vehicle. Now that I’ve received all my reimbursements and paychecks accounting for the overtime I worked, she’s ready to go test drive some cars.

Personally, I’m not thrilled by the idea. Car sales people are probably my least favorite people on earth, well after Girl Scouts that is. They are jedi-mind sorcerers. You go in to the dealership hoping to test drive a gently used compact car, and leave the lot three hours later with a brand spanking new 8 passenger minivan that you don’t even like. You justify this by saying “I got a great deal, $7,000 off sticker price” as though you somehow screwed the dealership out of money, when really you just gave them $25,000.  

Although I’m definitely not as excited as GN about beginning the “new to us” car shopping process, I’d be lying if I said the thought of four doors wasn’t at least slightly appealing (I have a coupe). Let’s lay some facts out as I see ’em…

  • I bought my Scion tC brand new in 2006 and it still has less than 40,000 miles on it. Girl Ninja’s 2005 Toyota Corolla was bought used and currently has 91,000 miles on it.
  • We both acknowledge we do not need an SUV.
  • We both want an SUV.
  • We could sell her car for around $8k no problem and mine for $11k.
  • We have a nice chunk of cash in savings.
  • We don’t want to buy a house.
  • We’d be looking in the $13,000 to $17,000 price range for a used SUV (depending on make/model).
  • The most cash we would be willing to go out-of-pocket is around $5,000. Everything else has to be made up from the sale of one of our vehicles.
  • We are not interested in anything but an SUV (sorry to those that hate SUVs).
  • I’m almost positive we will buy the vehicle through Craigslist.

Even though I’d rather wait until we have kids to upgrade vehicles, I’m only 50% of this household. Girl Ninja definitely wants a new car, more than I don’t want a new car. We work hard and save diligently, so why not live a little?

It’s easy for us to tell other people how to spend their money, and I imagine some of you will hate that we are considering an upgrade when our two vehicles have lots of life left in ’em. But anyone who has read this blog for a while, knows that we are far from careless when it comes to spending money. In fact the last $1,000+ purchase I made was in early 2010 on our plane tickets to Aruba for the honeymoon.

A little luxury isn’t a bad thing is it?  Got any car hunting tips for me? My landlord’s wife is a car broker and she said she could help us out, I know nothing about car brokers…are they legit?

 

48 thoughts on “I owe her a car

  1. Luxury is everything when it comes to cars. When I bought my 2001 Acura CL Type S for 34k I thought I spent too much money. Well 11 years and 112k miles later and my wife STILL loves the car. I’m hoping that will last another 5 more years. If not, I’m just happy it lasted this long. I just took the car to Carmax to get an estimate worth, they offered me $4200. Not too shabby for a car that has 100k+ miles, but I feel I could get 7k for it because I kept it in mint condition.

    Transportation is a NECESSITY of life these days. I strongly feel that buying a quality car and a car that you enjoy driving is essential. Otherwise, you will fall into the trap of replacing and/or repairing it too often. Life is way too short, get something you will enjoy and don’t stress over the money so much. If I were you guys I would be getting the 2013 Acura RDX 🙂

    Car brokers are pretty good, I know of 2 people who used them and were very happy. Because I only buy new cars, I would probably use Costco’s auto buying program. They seem to achieve a decent price with their negotiations. Also, you should see if you could take advantage of a zero interest offers with your awesome credit.

    Good luck on your search! And don’t be too frugal, your Girl Ninja deserves the best 🙂

  2. Haggle to the death!!! Take every initial offer as a personal affront to you, your wife and your future children. Double-tap the written offer (the one they circle in red) with your index finger then slowly shake your head and wag your finger, mafioso style. That should work another $1-2K off the price 🙂

  3. If you are thinking about going private, after gauging the market – be prepared to snap up a deal and move fast. The best deals are never around for long 🙂

  4. What the heck is a car broker???

    My advice is be prepared to walk if you don’t get the deal you want. Car dealers will not budge if they don’t beleive you are prepared to walk away and shop elsewhere.

  5. Remember, SUVs have sizes too. You don’t need to get an Expedition. Look towards some of the smaller models. I have a Jeep Liberty and love it.

  6. I have a Honda CR-V and my husband has a Jeep Liberty. Both are great. I will say that the Honda is a 4 cylinder is a bit better on gas than the Liberty but the Liberty is better in snow (we live in the Northeast) and has a separate shift for 4WD Hi or Lo.

    • We have a new CRV, 4WD (which kicks in automatically when needed)… we looove this vehicle! Didn’t have to use the 4WD at all this year due to our exceptionally mild winter, but I feel better having it.

  7. I just purchased my wife her first (and last) brand new car. She had never had one and I told her I would get her one. She loves it and I know for a fact we are going to have this car well over 100K miles (assuming it isn’t totaled).

    I second what was said above about jumping on a good deal. Also if you want to get top dollar for one of your old cars, make sure you sell before 100K miles. Banks are much more hesitant to lend money to people buying high mileage or older cars, so you would be limiting your pool on who can purchase your car.

    Good luck and enjoy the hunt!

  8. Ninja,

    I disagree with the “jump at a good” deal thing. I’m a bit more hesitant i guess. My wife and I bought a “new to us” car last August after several months of research and a month or so of test driving cars. The reason we did finally buy, well besides the fact that my older car was slowly “dying,” was that I trusted the person I was buying from. That’s a big deal, especially if your don’t really know what the car’s been through. Best advice though….don’t fall in love with the first car you drive, and don’ be afraid to walk away.

  9. Good luck on the suv shopping. In this case I would maybe consider a hybrid since it’s bound to use a lot of gas. With gas prices soaring it’s a good way to save money down the road. It’s great that you’ll be able to spend so little cash since you plan on selling your existing vehicles. So in the end it won’t really be that big a purchase.

    • For the amount of extra money it takes to buy a Hybrid vehicle (not to mention battery replacement costs, whoa!) you could by gallons and gallons and gallons and gallons……of gas for a less expensive ‘regular’ vehicle.

  10. I agree that you do seem to be pretty frugal with your money. I see no reason why you and GN shouldn’t go car shopping. There’s a difference between being frugal and being a tight wad. The saying goes, “you can’t take it with you.” Spending some of your hard earned money shouldn’t need to be justified. Especially so when you have debt paid off, save tons of money and are good stewards with what you have. Not that you need my personal blessing at all, but have at it.

  11. If you do go to a traditional dealer, arrange your own financing prior to purchase and haggle the price down. Also ask about additional fees, like doc fees. The dealer makes a ton of money on those things. Be prepared to walk if you don’t like what you’re hearing.

  12. I recently went on vacation with my girlfirend and when we returned home to the Northeast we found both our cars crushed under a massive oak tree. Totaled. This happened at the end of Feb. Needless to say, we have some unanticipated experience shopping for cars.

    Insurance paid us something close to FMV for our cars and we were able to use that money to fund a lot of what we paid for new cars. We went two different routes but both wound up with SUV’s.

    Her – A very reasonable (and VERY gently used) Toyota Highlander. 2006, 23,500 miles. An old guy basically drove it 3500 miles per year.

    Me – A very impractical Audi Q5 (replaced an A6 so not an unreasonable jump). 2009, 25,000 miles.

    One thing we both settled on was going the Certified Pre Owned route. I think you should at least consider that before using a broker and Craigslist. CPO cars go through a 300 point inspection before they make it to the showroom. They are the closest thing to brand new you will find and the warranty protection is worth the extra $$ you need to spend. On her car, she is covered until 2019 or 100,000 miles from today. Mine is covered for 3 years or 75,000 miles. A Craigslist car is not covered at all. All makes and models offer CPO. Definitely look into it.

    Somebody above said it but don’t shun financing. The other benefit to buying CPO is that the banks and financing companies view the cars as brand new. There is no gap risk and if you put anything down you’ll have a ton of equity already. We both took advantage of the financing and got rates under 1.9% on the small amounts financed. I hate paying interest as much as you but I will gladly view the 500 bucks I end up paying in interest as an additional cost and driving a terrific car.

    • Highlander is one of the cars on our watch list. As well as the Pilot and MDX. Thoughts on the highlander. What’s cool and what sucks about it?

      • It is a perfect car for my girlfriend because or her lifestyle. She’s a large animal teacher at an agricultural school and teaches riding lesson on the side. The model she got is not loaded by any stretch which is great because she won’t destory it.

        It’s more than powerful enough unlike some smaller SUVs that Toyota or Honda offer. The space is the biggest pro. The backseat has tons of leg room with seats that slide forward and back. The trunk space is huge.

        Only dislike for me is that it’s not the AWD model. This was not an important factor for her and helped us get a great deal. It’s front wheel and has great tires so snow shouldn’t be an issue.

  13. Just as others have said, be prepared to walk away. If the dealer won’t come down to your price, just walk. There are tons of vehicles out there. You gotta remember that dealers make 90% of their money on used vehicles, mainly because when they take trade-ins, they buy em cheap. That means there is normally a lot of wiggle room to negotiate. My dad is a master at this, I always take him with me when we shop for vehicles. He is so good he even pisses me off. The last car he helped negotiate saved me $2500, plus the dealership paid for a steak dinner.

  14. We are currently negotiating a loan modification on our mortgage with the lender. I really didn’t want to be the one to deal with the lender so I told my husband if he’s successful in getting a loan mod we will start looking into selling his car and getting him a new to him suv. that motivated him to pick the phone up time and time again!

  15. Good god, I can’t believe all the advice to spend lots of money on a car! I see no reason for you to scrimp on a new vehicle, but how much luxury can you get for $13-16k? Why spend thousands of dollars on a dealer or certification?

    Having just traded up in vehicles a few months ago, my advice is to list the vehicle you are going to sell on Craig’s list. Don’t aim for the stars, just pick a fair price that is in line with or slightly under your competition on Craig’s list.

    After doing lots of research and limiting yourself to a small number of SUVs and years you are interested in and are in your price range, start looking for them on Craig’s list. Arrange to have the car inspected by a local mechanic before purchase, nothing fancy, just a general overview of the vehicle and engine to check for warning signs. Then, when you find a vehicle and it passes inspection, make a fair and reasonable offer, I usually start at or slightly above trade-in value. Make sure you check both Edmunds and KBB, they sometimes differ by quite a lot. When purchasing a used vehicle I aim for trade-in value, but usually end up about half way between trade-in and private party, depending of course on how quickly that kind of vehicle is moving in the local market.

    I ended up with a 2008 Subaru Outback wagon that I’m very happy with, and sold my truck for $500 under asking price on Craig’s list in two days. A trade in for a similar Subaru at the dealer would have cost me close to $5000 more, because of the extremely high local demand for used Subarus. I worked with various dealers for a month trying to get a good deal before going private party, but at the end of the day they have to make good money on every purchase. There is nothing wrong with going through a dealer, but obviously they are going to take a decent chunk of money from you in the process.

  16. You will bring great dishonor to your Japanese cars if you don’t drive them well into the 100,000s.

  17. I’m not a fan of spending big money on vehicles, as they depreciate faster than probably anything else you buy in that price range. Everyone here knows that, no surprise. Fortunately for myself, I am hooked on old Vw’s.. I bought an 89 bus for $2500 a month ago and have not been happier. I used to drive a BMW, Chrysler 300, etc but hated losing money.

    Feel dresses

    • This point always comes up, but I don’t see its validity. Depreciation might matter if you plan to resell the vehicle, but if you keep a car 10 years or so it pays for itself anyway. Besides, unlike businesses that can deduct depreciation as an expense, individuals can’t use depreciation for any tax benefit.

      Ninja: “We are not interested in anything but an SUV (sorry to those that hate SUVs).”
      Apology accepted.

  18. Dang phone!

    Feel free to do what you are comfortable with, but you don’t have to spend allot all the time to get what you want. Good luck.

  19. What James said above. Also, if gas mileage (and what type of gas the car takes) is one of the top musts in your list, it would be good to compare between the desired models along with the price and features.

  20. I bought my car used from Enterprise. Their salespeople don’t work on commission so they don’t try to upsell you into something you can’t afford (this means they also don’t negotiate, the price is the price). The cars are retired fleet vehicles, so they are usually about a year or two old and have somewhat high mileage for their age, but have received great service while they were in use. I bought my car from them in 2001 (it is a 2000) and am still driving it!

  21. You should look up car listings through credit unions. Frequently, credit unions and banks will have a slew of cars that they’ve ended up owing and that they’re willing to sell to you on the cheap.

    Alternately, my wife and I found a good deal on a used Lexus SUV (I know you say that you don’t need one) through Carmax, who I believe treated us well and fairly.

  22. My husband and I felt the same way about an SUV. I have an hour commute and lots of snowy days. After EIGHT years of living in a climate with snow (I moved from California), we finally broke down and bought a new-to-us Honda CRV. It is amazing. I was just telling my husband the other day that while happiness wears off with most purchases, it is five months later and I still get excited every time I get in it. We are so careful with our money, but this was one place where the splurge was worth every single penny.

  23. I’ve never liked the new car hate on PF blogs. For most people in the US, a daily commute is a necessity. You’re spending probably years of your life in that car! You might as well enjoy it a bit.

    I think car buying is one of those things that has rules. But like my HS English teacher used to say “Writing well requires you to follow rules. But once you know them, you can also break them.” Ninja and GN have their stuff together. They have 6 figures in savings, good jobs, etc. If they want an SUV, they can get an SUV.

  24. What the heck’s a car broker? I think buying a very gently used car is the way to go. Go to the used car section of a luxury dealership. That’s what we did. We ended up getting an suv with pretty low miles for a great price. The used car section of the luxury dealership is great because it’s the cars that people traded in to get their luxury cars, so they might have lower miles (not the only horse in the stable?) and they’re probably well cared for. Also, a lot of people are going to them to find luxury cars for less….we weren’t! We don’t care about the luxury car models, so they had a lot of cars that most of their buyers won’t even look at for a great price.

  25. Larry, you are lacking consistency. In one sentence you mention people make too big of a deal about depreciation on vehicles, then turn around and make a point that businesses, not individuals, can make depreciation tax advantageous.

    • No, I’m not. The people who are making the big deal are generally individuals who cannot use depreciation for any useful economic advantage. For businesses who can, it can be an important element of their tax structure (especially with the recent more favorable thresholds for section 179 deductions and the so-called “bonus depreciation” rules). But for individuals, it’s largely blowing smoke.

      • Case in point: on the Suze Orman show a few weeks ago, a caller wanted approval to buy a high-priced vehicle and made all kinds of points about bonus depreciation and the section 179 deduction. The Big-Toothed Blonde was suitably impressed and approved the purchase, but at no time notified the caller that he could not claim any depreciation on this vehicle as a private individual. If he were a self-employed person filing a Schedule C, that is someone running his own business, that would be another matter, but the caller made no such representation. But as a private individual, I don’t worry about depreciation whether I buy a car, a computer, a piece of furniture, or any other fixed asset.

  26. Most people will sell their car at around 5 years of ownership. New vehicles depreciate fastest in the first few years, which is why resale value is brought up in million dollar marketing campaigns for new cars. You said something like, “it always comes up”. The above is why I brought it up.

    Depreciation may not factor in for you, and that’s fine. Most people are capable of justifying a purchase, right, wrong, or indifferent. They are also free to do what they want with their own money. Any pf discussion about a car purchase would include depreciation. Again, that’s why I brought it up. Thanks.

    • Depreciation is a deduction a business is allowed to take while it retains the asset. A business buys cars, computers, machinery, what have you, and immediately deducts the cost on their taxes as a section 179 expense and/or continues to deduct depreciation over the life of the asset. If you sell or buy you can compute depreciation in factoring the resale cost, yes. But you can’t use the depreciation while the car is still in your hands, as a business can.

  27. I’ll admit that I skipped reading the other comments in this thread (shameful, I know), so I apologize if this was already said, but do as much of your negotiation as possible via web and email. The moment you walk onto that lot or into that office, your ass is grass in terms of losing your negotiating power. I personally know many people who have scored incredible deals on all ranges of cars (Civics to BMWs) all by negotiating via email. Good luck!

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