Thursday, February 4, 2016

"New" Car Purchase

We finally did it, we bought a car. We have been driving a 1996 Plymouth Neon for the past 6 years. For the past year it has been leaking oil pretty bad. We were told it needed a new headgasket but it would cost more than the car is worth. This was our only car so my wife was stuck at home with the two boys during the day and I was constantly worried that it would die any day and I’d have no way of getting to work.  

We have been looking for a car for the past year. We set our original budget at no more than $12,000 which we had in cash. Since we would also have additional costs involved in purchasing a car (ie. taxes, title fees, registration fees, etc.) we figured that this meant that we couldn't buy something with a sticker price of no more than $11,000.

We started the search not knowing what car we were looking for. We wanted something with good gas mileage, a reliable name brand (probably Asian), and a hatchback to give us more hauling options. During the course of the search we looked seriously at Kia Sorento, Honda Fit, Toyota Prius, Toyota Matrix, Pontiac Vibe, Hyundai Santa Fe, Mazda3, Kia Soul, Toyota Sienna, and finally Mazda5.

After our second son was born we decided that we needed to buy something that would allow us to have another child and not be totally out of room to grow. This meant that we would need at least a third row option.

In the end, we decided that we would like a Mazda5 because it seats 6, gets considerably better gas milage than a full sized minivan, and is much more reasonably priced.

But even after finally deciding what type of car we wanted to buy, it still took us over two months to find the right one (hopefully I still think this was the “right one” three years from now). After researching and talking to Mazda5 owners we decided that we couldn’t buy one that was older than 2010 because that was when they added a few needed features, and the older ones seemed to have a few consistent problems that kept showing up. According to Consumer Reports used car listing from 2012, the 2010 model was the oldest one that had a reliability rating of “Above Average”. But then we ran into the problem of only being able to find 2010’s with over 100k miles for around $8k or ‘12 and ‘13’s with under 60k miles for $13k-$14.5k.   

One thing that was nice, was that even though we really needed a car we were never desperate. We always felt like we could walk away if we weren’t going to get what we wanted. And, after test driving and talking to the salesmen, we did walk away from several with our offer still on their table. I also found out that salesmen get really mad if you ask then how much money they have invested in a car.

Most of our search was done on Craigslist but we actually never contacted anyone that wasn’t at some form of a dealership. We had originally felt more comfortable not buying from a dealership because of the “there only out to rip you off" stereotype, but eventually realized that we felt like we would be taking less of a risk buying from a dealership that had done all of the needed repairs and servicing than from an individual.

In the end we finally found a car on CarGurus.com that met what we had been looking for. It was a 2010 Mazda5 Touring with 84.3k miles for $9,981. And the awesome thing was that the previous day they had been asking $13,000 for it. That day that I looked they had dropped their asking price by just over $3,000 and placed it right into our price range. It showed that they had had it listed on CarGurus for 75 days, so it was obvious that they were having a hard time selling it and were ready to turn their inventory and get it off of their lot. After work I had my wife call them to make sure it wasn’t gone already and I went straight there. We happened to get an older salesman that was just starting to sale cars after being tired of being retired from IBM. We actually found a salesman that we liked and trusted.

The dealership was only about 7 miles from our house so I test drove it home and picked up the rest of the family. We offered them $9,500 pending they could fix the alignment and get the pet smell out of it (thankfully it hadn’t been smoked in). The sales manager seemed to think about the offer for a minute before giving our salesman a nod and a “just-get-the-car-off-of-the-lot” flip of the wrist. We left a $500 fully refundable deposit and left.

That gave us the much needed opportunity to be able to sleep on the decision and talk and rationalize together, away from the emotions of being at a dealership. The next day I think we felt even better about the decision than we had before. They let us know around noon that they had everything fixed and it was ready for us to come look at. After work we checked it out and, just like we had expected, we bought it.

Total Costs?

$9,500 (KBB of $11,680) - Selling price
+$250 - Documentation fees
+$33.50 - Title and 30 day tags
+$658.13 - Taxes of 6.75%
$10,441.63 Total

And we stayed under our original budget with $1,500 leftover to go towards replacing my commuter car. And for awhile there I didn’t think we would be able to do it so I wanted to give up and spend more just so that the seemingly eternal search would finally be over. But I am very glad that we waited it out.

Resources that we used quite often during the whole process:
Craigslist - finding cars for sale
CarGurus - finding cars for sale and national listing prices for a specified car
TrueCar - finding the listing prices for similar vehicles and cars for sale
Kelly Blue Book (KBB) - finding how much a specific car was worth
fuelecomony.gov - finding average fuel milage for a specific make, model, and year