Essential Guide to Buying Your First Car: Tips and Insights

what's up everybody I'm janeli espinal welcome to financially inclined for Marketplace we're sharing money lessons

for living life your own way [Music] I've got a confession to make I'm over

30 years old and I still don't have my driver's license I know I know but look I grew up in New

York City and I just took the subway everywhere but now I'm working on getting one and while I do that I'm also

trying to figure out how to even buy my first car there are so many options out there it's actually kind of overwhelming

now I was curious about what kind of car some of you would get if you could get any car you wanted I want a green Kia

Soul because they're super cute and very fast and efficient it would be a Prius because it's eco-friendly and it has

good gas mileage Porsche Cayenne King Ranch F250 2018. the Rolls Royce 2021 Tesla Model 3. BMW

Series 3. 2011 GMC Sierra truck Tesla Model 3. it's a Honda CRV BMW Series 3

Tesla Model S my dream car is a Passover an orange McLaren the Lamborghini Veneno Lamborghini yours uh a green one

specifically okay when it comes to getting your first car maybe a Lamborghini is a little bit out of the

budget but that doesn't mean that you shouldn't buy something that you really love so in this episode we're getting

into the Nitty Gritty of car buying with Matt hardigree Matt is a journalist and a car expert and I'm pretty sure he

loves cars more than anyone I've ever met so let's get into it [Music]

is there a list of things that you must consider no matter what when you're buying your first car and what would be

on that list absolutely when you love cars people will ask you all the time what they

should buy and the questions I always ask are do you have enough money to buy new or used which will definitely tell

you what kind of car you should buy and do you have a very specific need like I'm going to deliver pizzas or do you

just have a specific want like I've always wanted a blue car and that's going to really help you decide how you

should think about researching and picking a car so let's talk about the hardest one of these which is you you

need a car you don't have that much money for a car yes that's a reality problem a lot of young people today who

want a car find out what are the kind of cars that I like but how how do they perform how reliable are they this

information is easy to find on the internet right now you can always go to Consumer Reports you can go to kbb.com

honestly the thing I like to do when I'm looking at cars is just look and see what's for sale and are there high

mileage versions of those you know are for some reason just so no one seem to be selling a car with that that kind of

car how come I can't find any of these cars over a hundred thousand miles what does that mean well maybe it's because

they don't last over a hundred thousand miles up to if you're buying something that isn't crazy at least put 15 away

for repairs if you're buying a used car there's you know the second you buy that car unless it's a certified pre-owned

car basically you are on the hook for anything that happens if you drive five feet away out of the driveway from the

person you bought it from and it all falls apart that person doesn't in most places owe you anybody yeah in that

situation you want to have a little bit of money set aside for repairs somebody who's never purchased a car

what like what does that mean if you're buying a car but it doesn't have a title for the car like why is that a red flag

the only way in Most states that you can prove that you own a car is having the title it says I have this car so if you

want to get insurance for this car if you want to sell this car to someone else you have to have proof that you own

it and that's a title there are some exceptions to this in certain states with cars over 20 years it's a little

complex but basically understand where this car came from understand that this person has the documents and know that

you are actually buying the car that the person is signing a document that says this car is officially yours in exchange

for money and do not give a person money until you see that title unless it's a dealer a dealer it's a little bit

different but if it's from an individual definitely do that um I would also say haggle in life

bigger the bigger the purchase the more you're going to want to argue and you're going to want to get someone to give you

a better deal assume that anyone who's trying to sell you a car it has put a 10 premium on the price

always haggle the worst they can say is no and it's important to have a poker face in these situations if I love the

car I tell them I like it if I like the car I tell them maybe I want something else I always have to argue always have

to haggle now let's say you have a little bit of money you know whether it's saved up if you've got money from

your bar mitzvah you know whatever it is you worked really hard and you think you can afford maybe with some help from

your parents a new car but you really need a new car in that situation I would say get the most car that you can afford

because in that situation you're not really going to have to worry about a lot of Maintenance items I would also

say you know there's sort of a quasi in between for people there's certified pre-owned cars so it's a car that still

has a warranty maybe it's got 20 or 30 000 miles on it but it's been looked over by a technician and they said this

car seems to be fine we've addressed the major issues do your research so when you budget make sure you budget

appropriately if you have enough money to buy a new car and you don't really need a car you

just want a car I don't really have a lot of advice for you because you are in a situation most teenagers are not going

to be in and you're probably you're probably pretty set so you know get what you want all I would say is I would

never buy a kid a new car that is worth more than thirty or thirty five thousand dollars first new cars you're going to

mess them up you're going to Scuff the wheels you're gonna get into a small fender bender and you're going to feel a

lot better if it's not a brand new Mercedes oh that's for sure now here's here's the my favorite quadrant though

if you don't really need a car and you just want a car put away a lot of extra money 25 I would put 25 you'd spend ten

thousand dollars you have ten thousand dollars for a car and you're gonna buy something silly don't spend more than 7

500 on it um absolutely it can be a little overwhelming because you already

mentioned like research you mentioned like evaluating the car you mentioned like haggling like there's a lot so give

us like the list of the steps in order like here's a nice clean list like first this and that and put it in like order

of what you would recommend and suggest I was trying to buy a car and I do this myself my first question is what am I

going to use this car for well I know I'm going to take me and I want to take my three friends I'm going to pick them

up on the way and we're gonna go to swim practice in the morning then I'm gonna go off to college and I'm going to want

to take my car with me okay cool I'm gonna take all my stuff with me so what I want is probably a crossover or a

small sedan understand where you live if you are in northern Minnesota and you get a lot of snow I'm not saying you

can't have a Dodge Challenger rear-wheel drive car with a manual transmission it might be a lot of fun but if you don't

if you're not used to Winter driving you don't have a lot of experience doing it you're not going to want to swap tires

off and on cars all the time in Winter then maybe that's not a great choice because you do not live an environment

where you can drive that car 365 days a year that eliminates 80 of the cars right there but there's still a lot of

cars what's next okay well what can I afford all right I've got fifteen thousand dollars okay good I've got

fifty thousand dollars to spend let me go on cars.com Craigslist Facebook Marketplace let me find out

what is in that price range let me narrow it down and let's see okay I see there's a lot of cars there's I could

get you know a Nissan Rogue a Ford Escape I could get a Subaru Forester cool great those are all great choices

which one do I want okay well let me go to Consumer Reports KBB let me talk to somebody I know who has that car odds

are you probably know somebody's mom or somebody's dad that has that car and I can tell you oh this is great I love

this car it's been great for me or oh you know what actually it eats gas it's not very efficient it's very expensive

to run understand that the price of a car is also going to include tax title licensing you know you're gonna have to

get plates for it you're gonna have to do all those things so that's that's going to add on if it's a 25 000 car

depending on the state and the region you're in and the city you're in it could be another four or five thousand

dollars on top of that so when you budget make sure you budget appropriately kind of final important

step is finding that specific car then okay I've narrowed it down to maybe I want a Subaru Forester so I'm going to

look and find our dealers on online I'm going to find the Subaru Forester of my dreams and I'm going to

compare and see kind of a sense of what the price should be and I'm going to look and see what I can afford and I'm

gonna go test drive it like the first good step especially with the cars test driving a car doesn't mean you have to

buy it so if you want to see if you like a car find one especially a used car go to a

dealer lot who has one just show you say you're interested go for a test drive if you don't even if you're gonna buy it

from somebody else right go for a test drive find out like okay I like this and then you've got a baseline to work from

and a good thing about going to a dealer as well if you have that option to test drive is it's always going to be the

highest price for that car almost always dealerships tend to charge a little bit higher for used cars because one they've

cleaned them up two they've decided is this is there something wrong with this car so it has

to usually meet a minimum standard and they'll also handle all the paperwork for you which is also really nice and

you have financing options if you want to finance the car you don't want to pay all at once you also have that option

right um so you can kind of set a high price and say okay this is the high end of the market I like this car this is

great and I know it's going to probably be there and I can come back and buy it later and then you can go to Craigslist

you can go to Facebook and you can see okay you know here's one that's four thousand dollars less is it just as good

of a car is it fine or do I get in it in it making funny noises in it there's a reason why it's four thousand dollars

left and you just have to keep narrowing and narrowing it until you find the thing that feels like it's something you

want it seems like compared to everything you've seen as a fair price and you're not worried it's going to

explode on you in as much as you can know that but funny sounds are usually a good indicator and like that's the thing

never be afraid to walk away the the ultimate advice in any situation is feels wrong just walk away you don't owe

anyone anything until you sign that title yeah so that's a good point because I especially if you've gone so

far you're having conversation you're asking questions you test drive it you now you feel like you have to buy it but

your point like you don't you don't allow anybody to pressure you to feel like you have to buy anything unless it

feels right in your gut I really like that advice I think that's a blanket advice that could apply to a lot of

other financial decisions that you're making what are the other options if you are the kind of uh person who's like

yeah I need a car but I don't have a lot of money and I can't find anything that makes me feel good about all the steps

you listed it at my budget so I might need to do something else um what are all the other options for

paying for the car if they can't use just the cash that they have you can consider going either to your bank or

credit union and taking out a loan which you'll probably have to get co-signed with the parent um so you'll be taking

out sort of a loan with a parent they'd also be responsible for It ultimately uh and you can pay a down payment and then

small amounts over time to pay off the car as a young person you will get a probably not great interest rate

especially now so a credit union if you can join a credit union or your family is part of a credit union is a really

good way to start banking anyways I highly recommend Credit Unions as banking options I will say if you're

thinking about going to college and you're doing loan applications and things like that adding another loan on

top is probably not a great idea um so you know my best advice in that situation is if you you don't really

have to have the car right now is get a job save wait a year it's a ride and then at least either Finance it when you

have a bigger down payment or wait until you can buy something you can afford and also hit up family like there's often

people have an aunt or an uncle who has that third old Buick Uncle Pizza Buick isn't cool but some wheels are better

than no wheels for now and you can always trade that car in for another car in the future that's a good point I

think there's also just a lot of confusion around the price of the car because like I've had teenagers ask me

like what's this like MSRP and then it's a different price when you pay like what why is the pricing of the car like so

complex it you you go to the store and buy anything else and you see the price and that's what you pay but when it

comes to cards it seems like that's not that's not the way it is with new cars yet there's MSRP which is manufactured

suggested retail price that is the price that the manufacturer says this car should cost

and almost no situation will you ever actually pay the suggested retail price which is super weird

and and because the dealer is going to either want to make more money on that vehicle because it's very hot

interesting exciting car so people will charge more for that car they will put in a market adjustment they will do

something to make it more expensive so you end up paying above MSRP or you're in a different situation it's a car

that's not very popular it's been sitting on the dealer lot for a while it's taking up space they want to use

for another car so they'll actually sell it to you below MSRP so that's for a new car for a used car there are really only

three numbers that I would ever really care about we're trying to figure out what is this card that I want gonna cost

First is the Kelly Blue Book value go to kbb.com you can type in what car it is how many miles it has on it it's

conditioned it's colored does it have a CD player or a car play or whatever and it'll give you what the general range is

for the price so that's the best way to understand with the used car what do we think it's worth and that's based on a

lot of data they get for car sales the second level of information that I would look at then is is compare it to like

market prices well look at just look on craigslist just go to Craigslist type in the car 2006 Subaru Forester type in

2007 2005 and you can kind of get sort of a range the only important price really in this whole conversation and

the whole experience of buying a car is what you can get someone to sell you the car for once you do all of your homework

this is the thing once you do all of your homework stress about it think about it before you buy the car but also

give yourself that honeymoon period give yourself that first drive in that first week of enjoying it and having fun and

ultimately once you have the keys you're going to feel great

okay you heard math no matter what your situation is there's a lot you can do to prepare for getting your first car

so here's my challenge to you use that needs versus wants Matrix that Matt laid out for us you could even set aside a

few minutes to talk it out with your friends do you need a car or do you just want

one are you set on a brand new car or can it be used from there start doing your research to

figure out what kind of car would suit your life you know my dream car is Alexis but after doing my research and

looking at my budget I've decided that I want a certified pre-owned Kia Sorento in teal with brown interior leather

seats now it's your turn tell me in the comments what your dream car is or share

the car that you've decided on after doing your research see you next time [Music]