Just helped my kid get his first used car.

by GrreatTeacher 13 Replies latest social family

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  GrreatTeacher

  My son, only child, age 19, college sophomore, just got his first used car. Most importantly, he learned the fun and exhilarating process of BUYING A USED CAR from a dealer. /s

  He had saved some money, but everything around the $5000 range was basically a shit box on wheels. After wasting enough time looking at them, we decided to double the budget for something newer and more reliable and we would help by financing some for him.

  Step two in the process was grabbing a car before it was sold. The used car market is hot right now and we looked at several cars that he couldn't be bothered to change his plans to go look at and they sold. Cue disappointment, but lesson learned.

  Found a car at price point and he got off his butt to go look at it. Test drove it, talked about positives and negatives. He liked it okay. I liked it okay. Then the sales lady showed us another vehicle slightly above our price point ( she was good), and he really liked it, I thought it was a better fit for him and my husband agreed and thought it would last longer. We decided to try to make a deal. Lesson: You don't get everything you want in a used car deal. Also, I negotiated with dear son whether he'd be willing to put more money down. We went back and forth on amounts and finally agreed on an amount.

  Then, we asked the sales lady if this was the best price. Her manager took off another $300 bucks, we realized with the hot used car market that was all we would get and, it was a fair price. Lesson learned: always try to negotiate, but know what you'll accept based on the market.

  So, we told the sales lady we're interested, but we'd like to look at financing part of the price. Enter the FINANCE MANAGER. He could get us 4.75%. We thanked him politely and told him we would contact our credit union in the morning. They wanted us to take the car home. We said no thanks. Lesson learned: you can often get a better deal on your own through your own bank and NEVER take the car home until you finalize the deal.

  Next day the bank gave us 2.75% We went back to the finance manager who tried to sell us extended warranty and gap insurance, very pushy. After politely and continually rejecting it, we finished the sale. Lesson learned: the finance manager makes her money off selling extra stuff so she can get pushy. It's very uncomfortable but stand your ground.

  Kid got a car, we got a loan and we no longer have to worry about his old truck breaking down.

  Most importantly, he learned an excellent life lesson: how to buy a car without getting screwed. Quite a bit different than teaching him to tie his shoes, but kids grow up!

  How have you dealt with this with your kids?
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  pistolpete

  How have you dealt with this with your kids?

  I'm a plumber, so as soon as my kids turned 13 I took them out in the field on weekends. They started at the bottom digging ditches, cleaning shit off toilets. One by one they hated it the first week. They went to mom and cried and begged her to intervene and stop dad from taking them back on weekends to work.

  Finally the end of the Month came and they were required to meet with the other employees for a meeting and their checks. I remember the look on my son's face when he got his first check for $700. at 13 years of age. After that he wanted to work every single weekend. The agreement was he had to get top grades in school. The kid hardly turned on the TV and was up past midnight everyday studying.

  Even our girl went through the same process. Same thing happen the first week cleaning shit off toilets. Then the end of the month came and she got her first check. 😃

  They all learned the value of working hard and making your own money in this world.
  
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  GrreatTeacher

  Here. Here. Good job, dad!

  My boy works full time all summer, full time in January between semesters, and part time when college is in session.

  His boss gave him a year end bonus, and you should've seen his face!

  He helps pay for community college. He will be completely responsible for expenses for this car.

  And fortunately, his employer has a defense contract so he was able to work through Covid.
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  vienne

  I'm saving for my first car. Dad says I can't have one until I'm 18, preferably until I'm 19. That's okay by me.

  It's harder to save now because my part-time job went away with the 'lock down.'
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  stan livedeath

  my dad bought a banger for both of us--and mum--to learn in. once we had all passed the test he bought a brand new car--and gave me the banger. i straight away sold it--for a profit--bought a van and shoved a mattress in the back. you can guess the rest.
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  GrreatTeacher

  Vienne, waiting until you're 18 is probably smart because your insurance costs will be much less. That can sometimes be the most prohibitive cost of car ownership.

  Stan, I shudder to think about where you found a spare mattress for your van!

  Good on you for flipping the old banger and buying a new one!
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  dubstepped

  I won't say my parents actively taught me this, but I watched them growing up and they didn't really do debt other than their house. Always paid cash for cars and drove cheap cars as we were poor-ish. To this day I buy all of my cars cash, find great deals from private parties, never pay more than $3500 or so, and have cars that run mostly problem free for years and years. Again, my parents weren't big on teaching me anything and what I observed was primarily what not to do in life, but this did rub off and I have little invested in depreciating assets and no debt.
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  Magnum

  Forget the kids; I need the info you posted. I'm actually looking now for a small pickup or Ford Transit Connect van in the $10,000 and under range. The info you posted was helpful to me. I don't have much experience buying vehicles because I was a poor pioneer for so long and only bought a couple of extremely cheap, but mechanically good, used cars over the years and drove them for years until they just couldn't go anymore.

  dubstepped, I did the same. Always paid cash. I'm 60ish and have never had a car loan. About 15 years ago, I was desperate for a car. Found one in a neighboring state from a private seller. It was a Ford Escort wagon with 199,000 miles on it. I know that's a lot, but I was desperate, and she only wanted $1500 for it. She was a schoolteacher, and she told me the miles were mostly highway miles accrued during visits to her mother. She didn't have to tell me this, but she said that for some strange reason it just sometimes wouldn't start. She said she took it to a mechanic, but he couldn't figure it out. That made me really trust her. Also, I knew that it had to be something simple.

  I asked her whether she would take any less, and she said her lowest was $1400. I wrote her a check (and she trusted it). I drove that car for years. It reached over 300,000 miles with no major issues. It started having valve problems which could have been repaired, but I figured that with the age and mileage, it would be better to just let it rest. Also, the lady was right about its not starting sometimes. The engine would turn over fine, but it just wouldn't fire up. You could roll it a couple of feet sometimes and that would make it start. I thought it must have been some kind of sensor. Sure enough, my mechanic found a bad sensor and replaced it, and I never had that problem again. That was an honest woman.

  I'm about to have to get my first car loan, though, because I don't have the cash now for one. That's one reason why GreatTeacher's post was helpful to me.

  OFF TOPIC: GreatTeacher, you just posted on another thread something about living near Maryland or something like that. For some reason, I always thought you were across the pond with the Brits that post on here. You're in the U.S.????
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  GrreatTeacher

  Yes, I've lived in Maryland my whole life. Right now I'm in between Baltimore and Washington, DC which basically means it's always rush hour all the time. The traffic never sleeps here. Kills cars.

  I absolutely believe in driving cars till they die. We have one good, reliable car and two that are about to die. A 2004 Toyota Matrix with 240,000 miles and dead air conditioning and a 2006 Dodge Ram with 165,000 miles and dead air conditioning. We bought 2 new tires for the truck, took it to the mechanic to put them on, and he called us and said the front end was so bad it basically wasn't safe to drive. After a $4500 repair estimate, we decided to put that amount towards a downpayment on one safe vehicle instead.

  One thing I might suggest slightly differently to do is to call your bank first and tell them you're looking for a car loan and wondering what rate they are offering. Then you can go into the deal knowing what your financing is. If course the dealership want to sell you their financing, but too bad. I cannot stress enough how much of a dick you have to be closing in on this sale. You can do it with a smile, though.

  The bank will probably give you a parameter for loans. For instance, they wanted the car to be a 2012 or later. Good to know. We ended up with a 2010 Highlander , one owner, 80,000 miles, and appealed to our local bank branch with the numbers. We put down about 40% which means we likely would never be upside down on the value. (That'swhat that gap insurance they want to sell you is about.), and we had an excellent credit score. And we have our checking and savings with them so they know our cash flow. We were ultimately approved, so never stress about taking an extra day to work out the financials.

  We got the dealership to agree to touch up the pinhole rust marks on the hood from where rocks kicked up. You can always ask about stuff like that. In general, if they've put it through state inspection, they aren't likely to upgrade anything they've already passed.

  Also, this might only be a local thing, but ALL the dealers around here charge a $500 processing fee. It's entirely bullshit, but it's how they pay their people. So, definitely ask how much better they can do on the price. The actual sales price might not be any skin off the salesman's back. Maybe that's not everywhere, but, again, know your local market.

  Don't buy any of the extra shit the finance manager tries to sell you! Repeat over and over, "No, thanks. I'm not interested in that!" and smile broadly! He might already be getting a cut of the dealer processing fee. We found that once we got on with actually closing the sale, he got very friendly again.

  Research acceptable vehicles beforehand. We texted a few dealerships about different vehicles and this salesgirl was in contact for about 3 weeks about new vehicles they got in. She was a bulldog and she got the sale.

  Best of luck. It's an exhausting process, but it can be done where you drive away with a "new" car and a smile.

  PM me if you want further details about the financing. I'd be willing to share. :)
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  Simon

  I've never understood the obsession people have with buying new cars or even worse, gas-guzzling Trucks (honestly, does anyone ever put anything in the back of a pickup to justify needing one? I've yet to see it ...)

  Not that it isn't nice getting a new car, but once it's paid off that shouldn't be a signal to get another because you pay a price in depreciation. If you can afford it, it can save you a headache and you can have a reliable well-maintained vehicle that can easily last 10, 15, 20 years without costing much. Don't get the specced out models or pay for things you don't need - focus on engine and drivetrain (I hate that you can get some of the good features without having to get leather seats and a sunroof, I hate paying for things I don't want, like TV channels).

  Same with phones, why do people spend so much getting the latest version every year or two? You pay for it one way or another. I get a nice phone and make it last 5 years.

  My first car was really old when I got it, cost GBP 200, but it had real character and I loved it and drove it for years, maintained and fixed it myself. Once, the clutch, at the side of the road in the snow - may, the sense of achievement as I drove home, dirty and aching that night!

  Always be willing to walk away. There is always another vehicle. But at the same time, be reasonable and understand how the economics of vehicles and dealerships work. Get someone you know with mechanical knowledge to checkout a vehicle or pay for an inspection if buying privately.

  When financing, look to optimize the deal. Maybe the manufacturer / dealer has an offer where they will "make the first 3 payments for you", so get the shortest term possible and pay for it with a loan from somewhere else, look for 0% and so on. Always pays to maintain your credit history so you qualify for the best deals and rates.