The kind of car that I’ll be looking to buy.

I say newer instead of new because I intend to buy something used.  I’ll let someone else take the big depreciation hit that occurs in the first few years after a car rolls off a dealers lot.  I’ll probably be looking for something like a Nissan Altima that is 2 to 3 years old with low miles and some nice features.  The Altima seems to get good ratings in quality and customer satisfaction plus there are tons of them around.  This means that it won’t be hard to find a good used one when I’m ready and I’ll probably be able to negotiate an attractive price.

Right now, I drive a 1997 Ford F-150 pick-up.  I’ll probably be switching from a truck to a car when I make this purchase.  With gas prices up above $4.00 per gallon with no relief in sight, it only makes sense to go with something that gets better gas mileage.  Nissan is now offering a hybrid version of the Altima so, by the time I’m ready to buy, I might be able to go green.  The Altima Hybrid gets around 35 miles to the gallon.  This would be a significant improvement over my F-150.

I’ll definitely pay cash for my car.

I’ve paid enough interest in my life.  I’ll be paying cash for this vehicle.  Based on the budget right now, I think we’ll be able to save the $12k-$15k necessary in 18 to 24 months.  I am creating a subaccount at ING Direct to segregate my emergency fund from my car fund.  This should help me easily keep track of our exact progress toward our savings goal.  If you haven’t tried ING Direct, you should consider giving them a try.  We just set up our account a few months ago and so far I’ve been very impressed.  I’m also earning more interest than I would in my normal savings account.

I’ve heard that dealerships aren’t that excited about customers paying cash.  I guess they make most of their money from financing and selling extended warranties.  Overall, car sales are down this year.  According to an article at Bloomberg, based on June figures car sales are down 20% from this time last year.  With this news, word on the street is that automakers are getting ready to offer all kinds of incentives.  You’ll probably see gimmicks like 0% financing and rebates out the wazoo.  My favorite right now is the so-called “Fuel Price Protection” offered by Dodge.  I will not be falling for Dodge’s crafty $2.99 gas guarantee or any other marketing ploy.  I’m going to stick to paying cash for a slightly used vehicle.

I’ll probably look at buying a car from an individual.

As an individual that sells things occasionally, I love it when people pay cash.  However, like I said above, I understand that dealers aren’t as excited.  I’m concerned that if a dealer sniffs out that I’m going to pay cash before the negotiations are done, then they might jack up the selling price to create some profit.  Therefore, I’ll probably look at buying my vehicle from an individual.  Of course, this isn’t without risk.

We got stung once when we bought a car from an individual.  Apparently, the vehicle had been in a wreck prior to our purchase.  This was definitely not disclosed to us and the repairs that had been done were subpar to put it nicely.  The shop told us that the wheel was about to fall off due to the damage that had been done to the front-end.  After several hundreds of dollars in repairs, we ended up trading it in to avoid future issues.  I’ll think long and hard about getting the car I plan to buy checked over by an independent mechanic prior to closing the deal to avoid a similar fiasco.

Buying a car is a big deal.

For me, buying a car is a big purchase.  I want to do it right.  Fortunately, I have plenty of time to research my options and prepare while I’m saving my money.  If you are thinking of buying a car in the near future, here are a few articles you might want to take a look at first:

My experience buying a used car with cash @beingfrugal.net
Buying a New Car? Skip the Negotiations @My Dollar Plan
Money Mistake Monday – The I Fell For Another Car Lease Syndrome @My Two Dollars
Shaking the New Car Itch- A Tale of Priorities @Get Rich Slowly

Do you have any tips on car buying that might help?  If so, please be sure to leave a comment below and let me know.  Thanks!

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Photos by johnny_nissan and Baltimike