In January, my husband and I knew we needed to get a new car. Jim had driven his 1990 Toyota Celica into the ground. With 212,000 miles on it, the Celica had served us well, but the repairs were becoming too expensive. We had received a small inheritance when my father-in-law passed away, so we decided to pay cash for a new-to-us car. Don’t worry. We didn’t use the entire inheritance on the car. We used a huge chunk to pay off debt, and we kept an additional amount for an emergency fund…the same emergency fund that is getting is through the difficult financial times we face today. But on to the story.
We sat down to discuss the kind of car we needed. We narrowed it down to buying an economy car or a minivan. The big advantage to an economy car, of course, would be improved gas mileage. However, we had issues with carseats, and the Celica had not worked well for us in that sense. The advantage of a minivan was mainly the ability to carpool. With two kids in soccer, that was pretty important to us.
In the end, we decided to go with a minivan. At the time Jim had a secure (we thought) job where he didn’t need to drive much, so gas mileage was not as important as it would have been if he were driving a lot on a sales job. My kids are really involved in soccer and church activities, and it’s always nice to be able to haul their friends around.
The next step was researching different makes and models of minivans. I polled my minivan-driving friends about their cars. My husband talked to people he knew. In the end, we narrowed it down to the Kia Sedona, the Honda Odyssey, and the Toyota Sienna. The Odyssey and the Sienna were obvious choices. Everyone raves about them. They’re also quite expensive. However, we found a lot of people who were happy with their Sedonas, too, so we added the cheaper Sedona to our list.
We then bought a one month subscription to Consumer Reports. The online edition provides a lot of information about used cars. It cost us about $5, and we were able to access crash-test reports, reports on how the used cars held up over the years, and strong points and weak points about each used car we were considering. It was a$5 that was very well spent.
We also bought a three month subscription to Carfax. We were considering buying through a private party, and with Carfax, you can see the owner history of the car you are considering. It’s important to know if the car has a history of an accident, or if it’s been listed as totaled. Also, cars with a single owner tend to be in better shape than cars that have had several owners, so you can use that as a bargaining chip. I think the subscription cost us about $15, and it was also well worth it.
We looked up the Kelly Bluebook price for the vehicles we were considering. We needed a ballpark figure for negotiating a fair price, and Kelly Bluebook is a great free tool for coming up with a figure. We then set a budget. We came up with a dollar figure that we thought would get us a decent minivan, and we determined that we would not spend more than that.
It was time to start shopping. We test drove a couple of Sedonas first. They drove OK, but we didn’t think they were very comfortable. The advantage of the Sedona is that we would be able to afford a van with lower mileage than the more expensive Honda or Toyota. The disadvantage is that we weren’t too impressed with the Consumer Reports data on the Kia.
A few days later, we found a Toyota Sienna in our price range. It was at a dealership that my husband had worked at a couple of years ago. We took the Sienna for a test drive, and immediately liked it much better than the Sedona’s we’d driven. On the test drive, my husband made sure to mention to the salesman that he’d worked at the car dealership before. That let the salesman know that my husband knew the bargaining techniques they’d use.
We also took our children along for the ride. We wanted to make sure that Sam’s booster seat worked well in the minivan, and that Liz was safe and comfortable in the seats. Having children along can be an advantage or a disadvantage when you’re bargaining. If you’re going to be distracted by your children, it’s better to take a test drive with them, and then leave them at home for the bargaining. On the other hand, children can annoy the salespeople into trying to get you to sign a deal quicker, which can work to your advantage. :) We kept our kids along for the bargaining process.
We decided we liked the van enough to try to work out a deal. We had seen the van advertised in the paper, so we had already looked up the Carfax Report and the Kelly Bluebook value on that particular van. It had higher than average mileage, so that worked in our favor. It also had more than one owner, so that was another bargaining chip in our favor.
We let the salesman know that we were buying with cash and that we were not at all interested in financing. The salesman gave us the rundown on the advantages of buying a Certified Used Vehicle. We listened, and then made an offer. It was not our highest dollar amount. The salesman talked to his manager, and came back and said they couldn’t go that low.
We talked a bit more, and we offered an amount between our first offer and our highest amount. Again, the salesman talked to his manager and said they couldn’t do it. We made our case, using the information we had gathered from Carfax and Kelly Bluebook and made our final offer. Again, the salesman came back and said he couldn’t make the deal. I said that we were ready to walk away, so he went to talk to his manager one more time.
Then he pulled a trick that is typical in sales. He told us that they had just gotten a Mazda MPV that we might be interested in. Of course, they hadn’t even had time to clean it up yet, but we could be the first to look at it. We had a look, and the van was a mess. Crackers on the floor, upholstery stains…it was filthy. This technique is used to make you overvalue the clean car you’ve already seen. We weren’t biting though.
We went back into the dealership and reiterated our final offer. By this point, the kids were getting restless. They had been playing in the play area, but they were ready to go by now. The salesman talked to his manager and said they couldn’t make the deal. I turned to my husband and said, “Let’s go.” The salesman got kind of panicky, and went back to talk to his manager again.
They came back with an option for us. We could either up our price by $500, or we could drop the Certified Used Warranty. We opted to drop the warranty and signed the deal.
Why did we drop the warranty? The certified used warranty was for three months, but the dealership had a two month warranty. $500 was not worth an additional 30 days of warranty coverage for us. The big advantage of the Certified Used Program is the inspection the car must go through before it can be sold as Certified Used, and the van had already passed that inspection. So we were already getting the biggest advantage of the program, even though we weren’t paying for it.
You do have to watch it with these programs, however. My brother bought a certified used vehicle and later found out there was rust damage on the bottom of the car. In retrospect, our one big mistake was not having our minivan looked at by an independent mechanic before we signed the deal. It worked out for us though, as we have had no problems so far. But I would highly advise anyone who is buying a car to get it checked out by your own mechanic before signing the deal.
In the end we walked away with the car we wanted for the price we wanted. We did several things right.
And we did one thing wrong.
We’re happy with our purchase, and our Toyota Sienna has served us well for the past 10 months. The best thing about it? No car payments!
Do you buy new or used cars? Don’t have a car? What’s your experience with buying cars? This project is going on all week, so feel free to write a post, and I will add your link!
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I'm just an average mom, trying to live a frugal life and get out of debt. I write about things that have (and haven't) worked to improve my family's financial situation. What works for me may or may not work for you, and you should always consult a financial advisor before making important financial decisions.
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