Shortly after I graduated from college my dad explained to me the four major reasons people buy a car. It was timeless advice that was true fifteen years ago when he told me and will still be true fifteen years from now. If you read all four reasons you’ll learn my best car buying tip for you.
1. Basic Transportation
Typically a college student will think of this reason for buying a car and perhaps even exclusively this reason. Will this car get me from point A to point B? It sure beats the bus or bumming a ride off my roommate. It will get me to work and back home. It’s four wheels and a seat and that’s about it. I don’t care what it looks like, the features it has or how safe it is (within reason). It only needs to get me from here to there.
On a cold winter morning when I leave the car out overnight will it still start for me reliably? Will the car be reliable for me in three years? Five years? Seven years? Japanese cars are legendary in their reliability reports according to Consumer Reports and J.D. Power and Associates but the American car companies have been making some progress over recent years. When my sick kid needs to be taken to the pediatrician will the car start when I need it most? Reliability is paramount for some people or just assumed as a basic prerequisite for others.
For most people Volvo comes to mind when you think car safety. If I am in an accident how protected will my family be from injury? How effective are the side air bags in this car? Does it even have side air bags? Does it have a rollover risk like SUVs? Safety is probably most often a concern of young families. Will my baby/toddler/adolescent be safe in an accident?
4. Status Symbol
Since my website talks a great deal about personal finances I could type for hours on why people buy a car as a status symbol. How cool does this car look? How cool will I look in this car? What will my friends think of this car? Does this car make me look older? Younger? Affluent? Does it make me look educated? Strong? Notice all of phrases used to describe the car as a status symbol describe how either you or the car look? I did not say one iota about how it affects the car’s safety, gas mileage, speed, reliability or performance. Buying a car as a status symbol does one thing very well: makes you spend more than you intended. I promised you my best car buying tip near the end of this article. Here it is: don’t buy a car based on how it looks.
If you can get over that one highly-overrated reason of status when buying your car (new or used) you will save a lot of money. If you are looking at high-reliability rated cars from Consumer Reports and your choice is to buy the model year version because they improved the look or a three-year-old version of the same model buy the used one! Let’s be honest; in the basic transportation, reliability and safety categories both cars are the same! Both cars get you from point A to B, they’re both reliable and they’re both safe. Is it worth your hard-earned money to spend $3000 – $4000 more on the new car? Heck, no. What exactly do you get by buying a new car versus a two to three-year-old one? In five years both cars will depreciate like a rock so why does it matter? Over five years, I’d rather go from $15,000 to nearly nothing than $19,000 to nearly nothing. A car is exactly like a bad stock invesment. After plunking down your hard-earned money it’s worth nothing in a couple years.
For help on the finances when buying that car read How To Buy A Car
To get over your “need” for high-status artifacts (like cars) read how the millionaires do it in A Year’s Salary Under the Mattress