Re: Guide: First-time car ownership in the USA Oh there are so many things I can say on this topic.
- If you are an enthusiast that likes to change cars often, lease. You will probably spend less leasing than changing cars often. Lease while you still have 3 year visa validity - so do it when you first come in or when your visa renews. All the wisdom around buying over leasing comes into play for long-term owners and high-resale economy cars. If you are the sort of person where you drive a lot of identity from what you are driving and you constantly think about cars, you will be happier leasing a nice car for relatively less monthly payment than buying a regular economy car.
- Buy used. You will save a lot of money. Negotiate hard and strike a good deal. Keep looking till you get the deal (and the car) you like. Don't "settle". At the same time be realistic. If you expect a price that is unrealistically low you will keep waiting forever or worse, end up with a lemon.
- Don't give yourself a mental block as to whats affordable and whats not. One of my friends leased a Prius for $270 a month, and another leased a Mercedes C250 for $250 a month - with an almost similar down payment. Guess which one ended up with buyers remorse.
- Don't buy German cars without a warranty. If you go used, try to get a certified pre owned one with a good multi-year bumper-to-bumper warranty (bumper-to-bumper warranties are not really bumper-to-bumper warranties, but thats a different story).
- Don't buy into brand stereotypes, test drive every car and decide. Don't judge a car by its brand. Research every model and even every variant within the model on its own merit. Example: Hyundai Genesis coupe, while still a Hyundai, drives better than many other cars of other brands.
- Understand the difference between envy and buyers remorse. Envy is when you are looking at a much more expensive car like a Ferrari - or an M3 or an RS5 - and hope you can afford it one day. Buyers remorse is when you buy a 3 series with no options and packages, and then wish you'd got one with the sports package or a bigger engine. Don't be that guy. Spec your car well, I am not saying load it up to the teeth with options but be sure to do your homework on the model and be aware of what options are must-have for you and don't compromise on that. Different people have different priorities.
- Separate the car research process from the car shopping process, don't do those together. Do your research first and figure out which model of car and which variant you want. Only then go and shop for a deal on your car. Don't walk into a showroom and start finding out about the car from the sales person. When you walk into a showroom, you should already know everything about the car, and the only thing he can give you is a) test drive and b) a great deal.
In the research phase, you need lots and lots of test drives. Get your test drives on used pieces of the same model (you can find them on autotrader). Go to the dealers that have used ones, and test drive those. You won't be putting mileage on someone's brand new car, and also the salesperson will give you test drives far more willingly on used cars.
Once that research and comparison is all done and you know which car model you are getting, start shopping for your actual car and look for deals around. That's when you should be going to a showroom and test driving new cars.
Other than price, don't listen to anything a car sales person has to say. They are usually uninformed or misinformed. You can find more and better information on the internet, on forums like this one. Spend a lot of time doing research.
- Avoid impulse purchases. Don't walk into a showroom with cheque book and papers intending to buy one model and come away with another model. Take a step back, question yourself whether you are getting carried away with sales talk, whether you will be truly happy with the car, sleep over it and decide.
- Economy car: If you are going the route of "I don't care what car I drive, I need to save max money" then my suggestion is buy a Honda/Toyota/Nissan/Mazda thats 60k-70k miles for around $6k-$7k (try to pay for it in full), use for 3 years and sell it for probably $5K. You will lose least amount of money this way compared to say, buying a brand new Accord or Camry.
- Understand financing and add-on options before you go to the dealer. Extended warranty. Maintenance plan. Tire insurance. Gap insurance. They will give you a lot of options and press you to sign up for them, and the price of your car will end up being a lot more than what you expected. Understand all of these before you go to the dealership, and decide upfront what you want (I prefer not to get any of these). Don't decide when having the conversation with the "finance guy" (who is really the best salesman there). Don't let that guy influence you into getting any of those add-ons.
- Don't forget to have fun. Car-shopping is a very fun thing to do , don't be in a hurry. Don't feel pressured to "buy something". Enjoy the process and buy the car of your dreams. |