Tips for Buying a New Car

As you may remember, one of the potential items on our baby to-do list was to buy a new car. My car, a 2003 VW Passat, was getting up there in miles and the cost-benefit of future repairs didn't seem worth it. At the time, we were considering buying a used car.

After we John did extensive research, we decided on the Honda CR-V due to its safety ratings, trunk space, low maintenance costs, decent gas mileage, and the fact that it looks good. To the horror of some personal finance "experts," we came to the conclusion that buying new would be better for us. Hondas hold their value extremely well, so we'd have to buy a CR-V with a lot of miles on it to see any savings. And at that point, why not pay a little more and put the miles on ourselves?

After a bit more research, we put together our strategy:

• Negotiate the car price.
• Negotiate the trade-in.
• Discuss financing.

It's important to negotiate and come to an agreement on each item separately because the dealer is always looking for ways to make a profit. And since we were buying as a couple, we were sure to be in agreement on everything before even starting the buying process.

How do you know what car price to negotiate?
While John did the research on which car to buy, I researched pricing and (of course) put together a spreadsheet. While the dealer may quote you the MSRP (manaufacturer's suggested retail price, i.e. list price), you never want to pay MSRP. Instead, you should know the car's factory invoice price and shoot for a price close to that. You can find out the invoice price by looking at Edmund's or TrueCar. Edmund's and TrueCar will also give the current market price, which is a good starting point for your negotiations.

TrueCar also has the option of locking in a guaranteed price at one of their certified dealers. While we didn't buy from a certified TrueCar dealer, we still printed out a Guaranteed Savings Certificate for our exact make and model and asked our dealer to match the price. We called the dealer and told them exactly what we wanted to buy, down to the exterior and interior color, and told them what price we wanted. They accepted!

Deciding on add-ons
At this point, the dealer might try to sell you all sorts of upgrades and add-ons. The only things we knew we wanted were leather and heated seats. At a previous trip to the dealership, we learned we could have leather and heated seats added to the CR-V's base level model (the LX) for much less than buying the primo level (the EX-L) with unnecessary bells and whistles. Fortunately, we had the price estimate for leather and heated seats in writing because when it came time to buy, our salesman tried to tell us that price was for the leather only.

Other options they tried extremely hard to sell us on were the extended warranty and The Protector, both with a healthy mark-up. The Protector offers rustproofing, fabric protection, and paint protection with a 10 year warranty...all at half of the usual price! (Please note the sarcasm.) There's no need to buy these additional services if you take good care of the interior and exterior of your car. And as John so politely pointed out to the salesman, "Are you suggesting that the paint job and rust-proofing on our new CR-V is subpar and that we need these additional services?" Not to mention our dealership will give us free car washes over the life of our CR-V. If you really want some additional paint or fabric protection, you can do it yourself or go elsewhere for a better price.

They also showed us a list of additional "stuff" we could buy, like a roof rack. We declined these items when signing the paperwork, but realized we wanted to get one thing when we picked up the CR-V. When we asked about buying the accessory, the salesman said he would call us with the price and availability. Guess, what? We never got the call. Shows where he's making his money...

What is your trade-in worth?
Next up is your trade-in. The trade-in price for your used car is one of the many places dealers will try to recoup concessions made for the new car price, especially if you declined their add-on's. We negotiated a darn good price on the CR-V, so the dealer tried to make up some ground with the Passat. Fortunately, we had done our homework and checked the car's value at Kelley's Blue Book, Edmund's, and NADA. I hadn't heard of NADA until I read about it on Words of Williams. While there was a bit of a range in estimates, we knew to walk away from the first (and ridiculously low) quote offered by the dealer.

Since you're not obligated to sell your used car to the dealership where you're buying the new car, we got additional trade-in estimates from Carmax and the local VW dealership. We then took the best trade-in price to the Honda dealership and asked them to match that. Yes, selling the car on our own could have yielded a higher price, but we didn't want to deal with the hassle and possibility of still having an extra car on our hands when the baby came. Plus, selling the car to the Honda dealership helped reduce the price of the CR-V further and lowered our sales taxes.

Negotiating financing
If you plan on buying your car with cash, this step is fairly straight forward. Decline financing, sign some papers, and write a check! Though the dealer may still try to talk you into a car loan to get a little bonus in their pockets.

Remember how I said to agree on the car price before financing? If you tell the salesman/financing department how much you can afford each month, they'll increase the term of the car loan (and possibly interest rate) to lower your monthly payment, but also increase their profits. You're better off knowing what you can afford and sticking to that.

If you do finance a new car, a good rule of thumb is to put down at least 20%, finance the car for no more than 4 years, and spend no more than 10% of your gross income on transportation costs. Another way so see how much you can afford it to get preapproved car financing from a local bank or credit union. Yes, you may ultimately go with a super-lower promotional interest rate at the dealer but it's good to have options and a little leverage in negotiations.

The car-buying process seems like it can be intimidating, but if you stick to your strategy, it isn't that bad. Just be prepared to walk away if the dealer is unwilling to negotiate or is taking advantage of you for their profits.
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Tips to Save Money when Buying a Car

Hi, friends! How was your weekend? I had a few vacation days to use up from 2012, so it was a four-day weekend for me. I didn't do anything crazy, mostly errands and catching up on sleep. The highlight of the weekend was building our crib! Which puts us one mini-step closer to being ready!

Another potential item on our to-do list is buying a new (to us) car. My car is getting up there in miles and we're starting to get to our breaking point with repair costs. We haven't had any major work done recently (knock on wood), but would rather not continue to throw money at the car. If anyone else is in the market for a new car, I have a great guest post from Melanie Lewis on ways to save money when buying a car:

When it comes to making major purchases, buying a new or used car ranks right up at the top of the list. In fact, it can seem like too daunting of a task to some people because of the high cost. Luckily, there are several ways to reduce the cost of buying a car.

Buying a vehicle should be a thrilling experience, but it can be difficult to be excited about it considering how much money will be expended. Saving money can take some of the sting out and make it fun again.

Pay cash
The best way to save money will take some advanced planning and time. By saving enough money to buy a vehicle with cash, consumers can save a great deal of money by not paying the interest that comes along with financing through a car loan. In addition, some dealerships may offer special incentives for those that are willing to pay cash. It can also strengthen a customer’s bargaining position since it will show they are serious about the purchase.

Research
Before heading out to any dealerships, take the time to complete a little research. Know what type of vehicle will best suit your needs. If gas mileage is important, look at which ones have the best rates. Those with a good safety record might also be important to note. Making a list of the most desirable vehicles will make it less likely to be swayed by a salesman’s pitch at the dealer.

Shop around
Once the list has been made, it’s time to start shopping around. Go to more than one dealer and compare prices as well as options. This can also include shopping online at websites that collect various offers. Dealers are highly competitive, so don’t be afraid to point out what deals another seller might be offering.

Buy used
While most people dream of buying a new car, purchasing a used vehicle can mean getting a quality car at the fraction of the cost of a new one. A dealership will often still offer a warranty on used vehicles it sells, which takes away some of the risk. Even less expensive would be to search the classified ads of the local newspaper. It should be noted, however, that before buying any car from a private seller that the car should be inspected by an independent mechanic first to make sure it’s not a lemon.

Insurance
When people think about saving money on a car purchase, many think only about the purchase price, but long-term costs associate with the vehicle should also be considered. This includes insurance and fuel costs. Sportier cars will have higher insurance premiums. Look for cars with high gas mileage, which will save on fuel costs.

Saving money can put the joy back into the process of buying a car. There are several ways to accomplish this, and most just require a little patience and planning on the part of the consumer.

Thanks, Melanie! We'll definitely keep these tips in mind as we continue our search for a new car. So far, we've looked at reviews on websites like Kelley Blue Book and Edmunds.com. We also visited a dealer to gather more information and see a few car models in person. We're still deciding whether to get a car or something bigger. Either way, we're mostly likely going to buy something used and pay cash (i.e. the Bohemian credit plan).

This is a guest post from Melanie Lewis. Melanie writes for a site that has information on used car auto loans and offers advice on things to consider before borrowing money to purchase a vehicle.
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Lessons in Chic-onomics: Car Maintenance

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Well, I have my car back from the shop. Good news: the car works and I haven't seen any warning lights since Friday. Bad news: it cost a little more than expected. As in $2185....eek! Good enough news: the repairs cost less than a new car engine.

So what the heck cost $2185? As a refresher, I have a 2003 VW Passat with a 1.8T engine and approximately 108,000 miles. I knew I needed a new timing belt and fluid flush, which were going to cost about $1,000. They also needed to clean the oil pick-up and replace the front flex pipe since there was an exhaust leak. There were some other issues with the timing and misfiring of some of the cylinders in the engine, but that was covered by a recall.

On the bright side, a remembered a few tips from my car repair post. Walking into the shop, I anticipated quite a few repairs. I knew it was going to be expensive. Before I even left to pick up a rental car that would be paid for by the dealership, I asked if I could get a discount. They offered me 10% off right there. Nice!

Once the dealership called with their estimate, I had a minor heart attack. They said the repairs would cost about $2,600 plus tax! And things would take longer than one day. I knew there would be the 10% discount, so that brought me down to $2,340 plus tax. The dealership usually only pays for a rental car for one day because repairs are generally completed the same day. Since we knew the repairs wouldn't be completed until Saturday, they agreed to cover an additional day of the car rental.

At this point, $2,340 still seemed a bit high. I called John and he suggested that I call a second car repair shop to ask if the estimate was reasonable and if they could perform the repairs for less. The second shop said the prices were about the going rate, but they could probably do it for $100 or $200 less. So I called the VW dealership back and basically asked them to match the price. They agreed to knock the repairs down to $2,100 plus tax. Woo hoo!

Lessons learned:

• Stay up to date on scheduled maintenance.
• Remember to negotiate the price or get a second estimate.
• I saved about 20% by making an extra phone call and asking twice for a lower price.
• Sign up for discounts from the dealership or repair shop.
• Keep current with part recall notices. These repairs will be free of charge.
• Follow service requirements for your car.
• My car requires synthetic oil, but I may have skimped and used regular oil a few times. This probably led to the clogged oil pick-up.
• Have an emergency fund!
• We've spent quite a bit on our cars this year between repairs and insurance deductibles. Both of our cars have been hit while parked on and off the street. You never know what other people will do while driving.

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Going forward, I'm going to be sure to follow these car maintenance guidelines. Especially before making long drives. I'm looking at you, St. Louis:

• Follow the regular maintenance schedule, this includes oil changes at the required times (generally three months or 3,000 miles check your owner's manual).
• Edit: Stephanie left a great comment. "Just a little tip, 3,000 miles is pretty old school for an oil change. When I worked at Chrysler I learned quite a bit of ins and outs of cars and most cars are built to go 10,000 miles in between oil changes now- the dealerships and auto repair places just don't tell you that because they want your $$. :) *Disclaimer- She is not an auto mechanic. :)"
• Upon review of my owner's manual, my car can go 5,000 miles between oil changes.
• Check tires for wear or damage and correct tire pressure.
• Check the level of windshield washer fluid and add as necessary. This is especially important in the winter.
• Check the car's interior and exterior lighting system for correct functioning.
• You might be able to replace the light yourself. Refer to your owner's manual or search for videos on YouTube.
• Check the engine oil level. The oil level should be between the two hash marks on the dip stick. I just learned how to do this in May 2011....ooops.
• Wash and vaccuum the car regularly. Especially in the winter when the road salt can eat at your paint finish.
• Change the air filter every twelve months or 10,000 to 12,000 miles. If you live in a dusty area, change it sooner.

Side note: Since the car is 8 years old we also considered whether it was even worth it to repair the car. If we wanted to sell the car, the repairs would have to be made in order to make the car drivable. Kelley Blue Book valued the car between $3,200 and $4,800. Then we would buy a "new" used car. Since we wouldn't be losing money by repairing and selling down the line, we decided to repair and drive the car a little longer. We'll reevaluate this decision if the car needs another major repair.

Do you have any other car maintenance tips?
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Painting the Town Red

Loft ruffle top, Zara red pants, Kate Spade earrings, Kate Spade pumps,
J. Crew leopard belt, Jess LC clutch

I'm not really going to be painting any towns since this is the first weekend in a while that I'm not travelling. Which means I don't have any one specific outfit to plan. Therefore, I'm keeping with the Friday's Fancies theme for the week of RED and created an outfit just for fun. And how much fun are those red pants? They're $60 at Zara and I could totally see myself working them into my summer and fall weekend rotation. Or even just getting a leopard belt to add a little dose of "RARR" to my wardrobe.

I took the car to the dealership this morning, so we'll see what they have to say. I already know they're going to replace the timing belt since the car is over 100,000 miles. Hopefully they don't find any other surprises and my negligence doesn't bite me in the butt.

Other than that, I'm going fabric shopping with Jess and we have a graduation party for one of John's cousins.

Have a great weekend! Do you have any plans? Or is it just a chill weekend?

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Lessons in Chic-onomics: Car Repair

Hi, there! How was your weekend? Did any of you try my easy summer hair tutorial? If so, I'd love to hear or see how it turned out. This weekend was the winery bachelorette party. It was super fun and we enjoyed some excellent wine. I think my favorite was the raspberry sparkling wine from Chandler Hill Vineyards, which is appropriate since I baked raspberry champagne cupcakes for the occasion.

The guests went home with winery-themed favors which included cheese, a cheese spreader, almonds, chocolate, a wine opener, and a bottle stopper.

Unfortunately, the fun ended during my drive back to Chicago. What should take 4.5 or maybe 5 hours took 7! So is the love/hate relationship with my car.

I love my car for the excellent gas mileage and safety. It's fun to drive and it gets me where I need to go. On the other hand, it's a little expensive. It takes premium gas. And being 8 years old with about 108,000 miles, it's starting to require more expensive repairs.

It's latest tricks include the oil pressure light (while telling me to stop the car), a check engine light that will turn on and off at will, and a broken side mirror (I tried to have it replaced, but the shop couldn't locate a replacement). The most recent addition is a grinding noise when I accelerate and push the RPM's past a certain point.

I haven't been very diligent with car maintenance because I don't drive the car as much in Chicago as I did in St. Louis. Plus, with moving to and around Chicago, I haven't been able to find a good car repair shop. And herein lies my problem, I don't trust car repair shops.

When I walk into the shop, they see it as an open invitation to max out my credit card with seemingly unnecessary repairs. What should just be a wheel alignment turns into a new set of tires and tie rods. Ugh!

Since I haven't had the best experience with a dealership or any other shop, I've been doing the bare minimum with the national chains. It may have come back to bite me now.

I've done a little research on finding a good auto repair shop and wanted to share some tips:

• Ask for recommendations from family, friends, or neighbors. Especially ones with similar cars, lifestyles, and income levels. A normal tune up for one person might not be appropriate for your car.
• Also ask whether the estimates were accurate, the repair was done right the first time, the job was done on time, and if the shop is clean and presentable. You will also want to know if the staff and technicians are friendly, polite, and helpful.
• You can look at Yelp, but the reviews tend to be extreme. Some people rave while others rant. Can you tell what's the baseline service experience?
• Find a mechanic with certifications, licenses, or memberships in associations with qualifications. Some include ASE [National Institute for Automotive Service Excellence] or AAA [American Automobile Association]. Others include NAPA Autocare, Parts Plus, TechNet, ATEA (Automotive Technology and Energy Association), ASP (Automotive Service Professionals), and ICAR (Inter-Industry Conference on Auto Collision Repair). Is the shop certified by your car manufacturer?
• Check your local Better Business Bureau for recent complaints and whether the shop is accredited.
• Does the shop have the latest equipment to diagnose and fix the problem?

Once you decide on a shop, the fun really begins:

• Use the owner's manual to learn about your car and any warning lights before taking your car into the shop. The owner's manual will also list different service requirements based on the mileage on the car. [I'm guilty of ignoring this....sorry Dad.] It's better to say you need the 50,000 mile service (including the specific services) instead of a general tune up.
• Get a detailed parts and labor estimate before proceeding with service. You want to know what they plan on doing before starting to work on your car.
• Once you get the estimate, ask plenty of questions. If the price estimate is much higher than expected, ask if all of the services and repairs are totally necessary. Ask to see the parts and explain the problem and procedures. 
• If the job still seems too expensive and the car is drivable, get a second opinion.

I plan on taking my car to the local VW dealership this week. I'm hoping for a good experience, but will definitely keep these items in mind with my guard up.

Do you have any good car repair experiences? Any horror stories out there? How did you find a reputable car repair shop? Has anybody had experience with a VW dealership in Chicago?
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