Car Trek I: The Saga Begins...
Over the last few weeks, I have decided to replace my Mini-van, the family grocery getter. What I would like to do over the next few articles is to break down my process for those in the same situation. It doesn't matter why you need to replace your vehicle, or if you are buying the first one for your new family. The process should be the same. Before we break into the bulk of this, it is important to me that you know where my mind was to start this process.
My van was not broken. I was not forced to do this. Over the last winter, I had several close calls with the icy roads, and it scared me enough to prompt a change. Unlike so many people reading this, I am not in a hurry; I am not going without. I am not struggling to fill a need immediately. With that said, after I decided that a new vehicle was my course of action, the first thing I did was go to the Internet to see what other dads had been saying about the new cars available on the market now. What I found there was a bunch of brand-based opinions and promoted blog posts, but no one that I found took on the true point of my search which was HOW do I find the right vehicle for my family. Everyone wanted to address which was best for this reason or that, so I am adding my two cents to help fill the vacuum hopefully. With that said, here is my take on HOW to find the right vehicle.
The way I see it, there are a few main points to replacing your car. I am purposefully going to refrain from mentioning any brand names here; this is not about what car/vehicle is best, it is about finding the right one for you. We will leave the fanboys to battle over which brand is king and we will stick to making informed decisions with thought and patience. In other words, we are going to make a process for car selection using the same principals we use for parenting. Also, for the sake of ease and sanity, I am referring to whatever transportation you are seeking as “your new car” This is not a bias, I am not saying it has to be new. Used cars are almost always the best fiscal choice; I am simply using this term so that we can stay on track. With that in mind: Here are some questions you need to ask first.
1: Why am I replacing it? It may seem like a no-brainer to you, but identifying and articulating your purpose and need may help greatly when you stand in front of the dealership, and the hard-sell commences. Have your transportation requirements changed thus requiring a new vehicle? Maybe you had a five passenger and just found out that the new baby bump is actually twins? Did your work change and now you need something to handle a much longer commute with better mileage? You get the point. Identifying the needs in plain language on paper so that you can refer to them will keep you on task and help you from being sidetracked by all the shiny new things.
2: What are my use requirements? Does it have to be brand new? How many original miles am I willing to buy? Does it need extra cargo space? Are you looking for a few extra seats? Maybe you are just looking for something with a smoother ride? Making a list of what you need to use it for helps to give you a cross reference once your wants kick in. Like any piece of equipment, it doesn’t matter how much you spend or save, how pretty it is, or what label it has on it. If it doesn’t fulfill the basic needs of its use case, it is a waste and will never be efficient.
3: What do you want? It may sound superficial, but really, you are going to have to use this vehicle for a LONG DAMN time. You might as well try to get as many of the wants on your list filled as possible. Practical is good, but if we can get all the needs filled and some of the wants, we will be happier in the long run. Now feel free to go a little crazy here. I am surprised at how many of the super high-end luxury options of just a few years ago are now basic standard features if you ask. Keep in mind that it is just as easy to be mind locked into the boring practicality of adult life and end up choosing a car that suits your needs but is no fun only because you think you have to or don’t look far enough because you don’t believe there is anything there. It never hurts to ask for a feature.
4: Lastly, before you start your search, sharpen your pencil, put it to paper, and set yourself a budget for this new purchase. Too many times, young parents are so busy with life events that they let the budget go. This is financial suicide. While your whole life desperately needs a budget to remain stable, we will discuss that in a future article. For now, lets just focus on this new vehicle budget. How much do you feel comfortable spending? Will you have to finance it? Should you lease or buy? Will you trade something in? Do you have a current payoff on my trade-in? If so, what will that do to your purchasing power on the new car? What should your payments be? Will your credit score support this purchase and what will this purchase do to your credit score? These are all things to keep in mind when you are making your car budget.
So now you have a list, it has categories. It has your wants and your needs, some technical specs you are looking for and some general guidelines for what the new vehicle should be. This shouldn’t have taken very long. This can all be done in one afternoon or less. I mention this because, if in question one, your answer is “because my vehicle just broke” then you will always need the ability to move swiftly. Don’t hurry, but “move with purpose.” (One of my household mantras)
The next thing you want to do is make a list of vehicle sources that are available to you. Places that you would be comfortable doing business with. These sources can be online, or physical dealerships. This list will be handy as it gives you a place to make notes and put contact info for the people you are about to meet along the way. If you already have a dealer that you work with often or know personally, start there. Also, don’t be afraid to use the internet as a tool for selection and discovery, but then purchase from a local brick and mortar dealer. Car dealers, like lawyers, have gotten a bad reputation, most of which is totally unfounded. If you think about it, your local auto dealer is just a person, a tax paying member of your community that is providing a service and trying to make a living. They have families and lives and dreams just like you. If you treat them as neighbors, more times than not, you will have a good experience. Will they try to make a profit from your sale? Of course! Is that bad? Of course not. You benefit from a for-profit business transaction all the time, heck most of us would starve if we didn’t have some form of income. Why should a car dealer be any different? Lastly, when choosing a source, keep in mind that for many vehicles, a warranty is involved and because of that, you are entering into a bit of a partnership with your dealer or source. Is this a place you are comfortable going back too? Is it somewhere you can bring your family? Will your children be safe in waiting here while repairs or maintenance are performed? This may not be something you can control, but it certainly should be something you consider.
Now that you have your lists, your budget, your sources and a plan, you are ready to start your search. As you do, don’t hesitate to go back to any part of this plan and revise it as you get new information. Remember, plans and budgets are just gauges, they are not laws. To make the best choice and do the most for your family, you need to be thoughtful and fluid, able to act, and respond as the need arises.
Lastly, I will leave you with a few observations I have made that may be helpful, a few quick tips if you will. First, be careful when you apply for an auto loan. Every time you request credit, it puts a negative mark on your credit score. Many sources warn you to do all your loan shopping in a two week period as that makes it obvious to the credit bureaus that you are rate shopping, not trying to max out your credit. Secondly, There are lots of sources online and in person that will offer you a pre-approval or pre-qualification. Ask lots of questions before you agree to this because there are two ways a lender can do this, there is what is called a soft-pull and a hard-pull on your credit score. A soft-pull is when a lender looks at your credit but doesn’t request credit validation on your behalf. A soft-pull will almost never hurt your credit, but also will almost never lead to a loan approval. It can get you pre-qualified, which sort of means nothing. It can give you an initial overview of how much you will be allowed to borrow, but it isn’t a firm offer of credit. As long as you are mindful of that, you can move forward without hurting your credit. A hard-pull, on the other hand, is a credit application, and that generate a negative mark on your score. Again, as I stated above, try to keep all your hard-pulls to a two week period. If nothing else, it will make it easier for you to dispute all those with a credit agency.
In the next few articles, I will deep dive into my process and see if I can dissect each of the steps above as I experienced it.