Merging Into Life Podcast: Buying Your First Car

Join me as I figure out how to do all the things we have to do, but don’t come with instructions like buying insurance or what you really need to know when making what is probably the biggest purchase of your life, buying a house or maybe moving back in with your parents or booking your dream vacation.

Today on this show we’re going to get into buying a car. Whether it’s leasing a car, buying new or used, we’ve got you covered. The two main factors that come up when buying wheels are, what are you going to buy and how are you going to pay for it? So, I found two people who know cars and the art of buying and selling inside and out.

[00:01:17]
Nicole Wakelin: This is a crazy burly kind of truck and it can go off-road and you can take it up rocks, and they took us out to their new driving school and we jumped it, took it up in the air, whee and came down on the other side.

[00:01:30]
Amanda Greene: That’s Nicole Wakelin. She’s the editor-at-large for CarBuzz and a juror for both the North American Car and Trucking Utility of the Year and World Car of the Year. And yes, she got to jump a truck at a specially built facility under the safest of circumstances. It’s all part of her job, which involves test-driving about a 100 vehicles a year.

[00:01:52]
Nicole Wakelin: They appear in my driveway each week for me to drive and then I fly all over the world to drive even more of them.

[00:01:59]
Amanda Greene: What got you into cars initially? What do you love so much about cars that you are someone who drives over a 100 a year?

[00:02:05]
Nicole Wakelin: Well, you know what? When I was a teenager, I lived in a small town and a car was all about freedom. As soon as you got your driver’s license, you suddenly were no longer tethered to your house all the time. And the minute I got my license, it was like two seconds after the law said I could get it, I had it and it was just, I never turned back. I love driving, I love the freedom of it, I love the experience of being in different vehicles because they all are looking to hit the mark for a different person and I find them all just wonderful and intriguing and I love to drive so, that’s it.

[00:02:37]
Amanda Greene: A fun fact, when I was a child, I made a pretend steering wheel and put a little bendy straw as a blinker because I so desperately wanted to drive. Because of that freedom you’re describing it really, it’s a feeling that never went away. So, the idea of purchasing a new car can be really overwhelming because there are so many factors that go into making the choice for someone who’s just starting to think about buying a car. What are the main things that you would suggest considering or what to look for when buying a car?

[00:03:05]
Nicole Wakelin: Well, I think the first thing you need to do before you even go online and start looking at the mass of information about cars, is to figure out what you want and what works for you, not what your neighbor wants, not what your sister wants, not what your dad wants, what works for you because you’re going to be in that car a lot and it’s generally speaking, the second most expensive thing most people buy aside from their house.

So make sure that you know exactly what you want. Think about how you’re going to use your car, how you’re going to drive. Are you having lots of kids in the car or not? Do you have lots of cargo or not? Do you need to tow a boat or not? And then just narrow down the kind of car that you want before you even start looking at exactly which one.

[00:03:48]
Amanda Greene: What sort of things are important when buying a car? Can you give some examples?

[00:03:51]
Nicole Wakelin: Well, I think you need to consider, how comfortable you want to be. Comfort stuff is always important. You live in the Northeast, the heated seats and heated steering wheel might be more of a priority, you live in Florida, not so much. Things like all-wheel drive, those features, if you’re someplace where there’s lots of snow or even where the roads are just wet a lot, all-wheel drive might be a big deal if you’re in sunny California, again, maybe not. But look at the features that you want and the features that you must have and think carefully about what’s truly necessary.

Do you need a three-row SUV? If you only have one child, well, sure you could bring along all their friends, but that’s a lot more expensive. Do you really need that? Maybe a two-row SUV is enough. So look and think about how you’re going to use your car and then make a list of the things that are your priority. I hate cold mornings, I must have heated seats.

Performance is up there for me, well then I’m probably not going to be looking at an economy car that gets good gas milage. So, make a little list of the things that you just absolutely really, really want in your car versus the things that will be cool to have these things. But if my budget doesn’t allow it, then I can’t find the right mix, then I can survive without them.

[00:04:57]
Amanda Greene: Okay Nicole, you’re driving over a 100 vehicles a year, and so I imagine that can be a crazy task because you have to go into each one fresh to evaluate. Do you have a mental checklist that you go through when you get into the driver’s seat of a new car each time?

[00:05:13]
Nicole Wakelin: My priority every time is to make sure that it’s pleasant to look at and that it’s comfortable because most of the time you’re staring at the dashboard. Most of the time you’re sitting there and sometimes for hours and hours if you’re doing a road trip and the last thing you want are seats that are stiff or bolsters like the side that hold you in too tight so you feel squished and you just want to get out of them.

So I think finding comfort and having an appealing look to it is a priority and that you can actually see the road, which doesn’t sound like something that should be difficult, but if you have a big vehicle, sometimes the way the seat adjustments work, you find you’re trying to, especially a big SUV, where is the end of the hood, you should be able to get an adjustment where you can truly see without having stretched to do it.

So all these things are that first checklist of is this easy? Is this makes sense? Could anybody sit down in this and feel comfortable? You’re looking for things in a car to be something that you can get used to fairly quickly if they aren’t immediately intuitive?

[00:06:17]
Amanda Greene: How about electric vehicles? Who are they meant for? Who are they suited for?

[00:06:21]
Nicole Wakelin: I want to say they’re suited for everyone. Anyone can get an EV, but there are things that make them better or worse depending on your circumstances. You have to be able to charge them. If you’re someplace where you are, say in an apartment or a big city where you can’t install a charger in your garage or outside, at your driveway, then they might not be the best choice because it’s hard to rely solely on public chargers to be able to charge your vehicle. If you drive extremely long distances, again, that can be a little challenging because again, you’re relying on that public infrastructure and depending on where you are, it’s a little so-so.

They can be poorly located, they might not work, you might not get the charge you expect. So if you do lots of road trips, if you travel a lot for work, an EV might not be ideal unless you’re comfortable with getting comfortable with charging. If you’re not traveling super long distance, you’re okay because the average EV, you’re getting over 250 miles of range with one charge. Most of us don’t drive that much in a typical day. So truly most of us are going to be fine with an EV.

[00:07:26]
Amanda Greene: And I didn’t really realize how much car safety features have changed over time. My husband’s vehicle does not have a backup camera in it, and it’s only one year older than my car. And so I didn’t realize that that was something that came standard just a few years ago. But when you’re thinking about buying a used car, do any car safety features come to mind that you would consider a must have?

[00:07:46]
Nicole Wakelin: Absolutely. And depending on how old the car that you’re looking at is, every car now comes with a camera. So you have a backup camera once upon a time they didn’t. And depending on how far back you go, it may have just been the very top trim that they offered it in or very expensive cars that it was offered in.

So, I would look for what we consider the basics now. Look to see if those basics were available on some of those older cars because those were the ones that were the first things to roll out, like the camera, like lane keeping assist, that’s another good one.

Things like automatic emergency braking. That’s one of my favorite car safety features, if you can find a car that has that automatic emergency braking feature, it’s the one when you blink for two seconds and suddenly you’re about to rear end somebody that will save you so many times.

So don’t get too worried about the long list of features, they’re all great. They all provide help and keep you safe and keep you out of accidents. But we drove for a long time without all those and it wasn’t absolute chaos. You’ll be okay if you can’t find the latest and greatest feature on something that’s in a used car. So investigate it, but don’t get too carried away. Don’t be benchmarking against today’s Mercedes Benz because you’re never going to find that on a used car from four years ago.

[00:09:01]
Amanda Greene: It’s a good reminder to think about how fun a car, truck or whatever you’re in the market for can be. So, I’ve got to figure out which features are most important to me and don’t worry, we’re going to hear more from Nicole Wakelin later in the episode.

I do spend a lot of time in the car, so something that really works for me. I love a seat warmer. Okay, this is a nice one. It’s got three rows. Just like I wanted. Nicole said, think about what you want and need because like she said, there are going to be big differences between buying a used car from four years ago and a new Mercedes Benz. A major one of course is price. I need to talk to somebody about the budget.

To walk us through all things finance and how to approach what’s usually the most hated thing about purchasing a car, negotiation. I’m talking to Ted Lyons, he’s Vice President of Financial Services with AAA Northeast Bank. Let’s start at the beginning. When is the best time to buy a car?

[00:10:13]
Ted Lyons: I think the easiest and most universal answer is before you have to. If you are put in a position where you have to buy a car tomorrow to go to work, to go to school, to pick up your kids, it’s going to put you at a decidedly poor advantage to negotiate. You haven’t done your research, you haven’t done your due diligence, you may not even know how much you can afford. The earlier you can get started on the process, the better and definitely before you have to buy it.

[00:10:42]
Amanda Greene: And speaking of what you can afford, the B word, nobody likes budgets. How do you even know if you’re in a position to be purchasing a car? How do you determine if you’re ready financially? How do I know how much I should spend on a car?

[00:10:52]
Ted Lyons: I think there’s a couple of things. One, the easiest and most obvious is take a peek at your bank account. What do you have in savings? Where are you positioned financially on a cash on hand basis? And then next is going the loan route. So you go and you find out how much can you afford. You can go to your local bank, your credit union, your auto club, wherever you want to go and go get pre-approved.

[00:11:15]
Amanda Greene: Okay, so that’s something people do. Before going to the dealership and actually talking about a car, they’re going to the bank or somewhere else to figure out how to get the money.

[00:11:24]
Ted Lyons: They should. Not everybody does, but they should.

[00:11:26]
Amanda Greene: I kind of thought you’d just show up at the dealership and they tell you.

[00:11:29]
Ted Lyons: Most people do, and that’s where your bargaining starts to go downhill. If you don’t have the ability to know how much you’re approved for, what rate you qualify for, what your credit score is, they’re going to throw a number at you and it may sound good and it may be way too high, maybe way too high. If you know how much you’re approved for, if you know what your rate is, if you know what your payment is relative to those two terms. So, how long did you take out the loan for. The dealership, they’re really good at selling cars and they sell more in a month than you’re going to buy in a lifetime.

[00:12:01]
Amanda Greene: Okay, you are talking about a different level of preparation than I ever thought was necessary before purchasing a car. So that is really good information. So, there’s various payment options. I thought you could either choose buy a used car, buy a new car or a lease, but it’s a little bit more than that.

[00:12:18]
Ted Lyons: It is, and those are effectively the three choices you have. So you’re going to buy a new car, you’re going to lease a new car, you’re going to buy a used car. You can break up that used car transaction a little further. So are you going to buy a used car from a dealer? Are you going to buy it from somebody off Craigslist? Are you going to buy it from somebody off of one of the auto buying sites or Facebook Marketplace or there’s a number of different ways you’re driving down the street and it’s on somebody’s front lawn.

There’s a number of different things so, we just a second ago talked about the financing. So it’s good to know how much can you afford, where are you going to get that money from and so forth. You also have to consider the car, so don’t show up to a car lot, don’t show up to somebody’s house or a dealership or what have you without knowing what that car’s worth. New cars are kind of easy for the most part. You’re paying around MSRP nowadays, the days of paying way under are kind of gone with the last three or four years of car buying mayhem, if you want to call it with inventory shortages and trip shortages.

[00:13:16]
Amanda Greene: You’re saying there’s a little less room for negotiation?

[00:13:18]
Ted Lyons: There has been. It’s starting to wane a little bit as the inventories are bouncing back. We’re starting to see there’s a little more room for that, but it’s nowhere near what it used to be.

[00:13:28]
Amanda Greene: Is there a best site to buy used cars or a resource that you suggest to visit to figure that out ahead of time?

[00:13:34]
Ted Lyons: So, I wouldn’t look at any one site. I’d look at a bunch. And the internet is a wonderful thing and it’s also a rabbit hole and my wife and I were talking about this morning where you get on something and then two hours later you come up for air. But there’s a few sites. So JD Power’s a good one for looking up values, Kelley Blue Book, there’s Edmunds, there’s any of the sales sites too, but it’s also good to see what they’re going for. So go look and see what they’re being advertised for because there’s also a difference between buying it off a dealer’s lot and buying it from your neighbor, right?

[00:14:05]
Amanda Greene: Right.

[00:14:05]
Ted Lyons: There’s a differential in the price there. So you’ve got to kind of know the range and then I hate to even layer this in, but if you’re trading in a car, you’re going to have a whole another factor of negotiation in there as well because they’re not going to offer you retail value for your vehicle.

[00:14:24]
Amanda Greene: Can we talk about leasing a car? Because I’ve never done a lease and I don’t really know a lot about them other than you’re locked into a certain amount of mileage. I know there’s a lease buyout and an extended lease, but how does leasing a car work?

[00:14:36]
Ted Lyons: So, leases are great for people that want to always drive a new car and are kind of married to the fact that they’re just going to always have a car payment. You mentioned mileage, mileage is a big piece of it where if you drive a lot, a lease is something you may not want to consider because they give you X amount of miles every year and at the end of the lease, if you turn that lease in, you may be paying 25 cents a mile over what you’re allotted.

So a lot of people in that case will tend to buy their cars out and lease buyouts have been a very big thing over the past few years because, as we talked about earlier with the inventory shortages and the add-on and the inflation on the vehicle values, you set your vehicle buyout price a couple of years ago.

Two, maybe three years ago when the values of those cars were much lower. Now it’s a very good financial decision in most cases to buy out that lease and a lot of people are doing it. So that can be another purchase option where you’re in a car, you like the car, maybe you don’t like what’s out there on the market right now, or you don’t want to pay what a new car is worth, a lease buyout’s a good option. You mentioned extended leases, some people can push out their lease another couple of years if they wanted to do that as well.

[00:15:49]
Amanda Greene: So let’s talk about terms. What should buyers know about terms to avoid being taken advantage of once they’re there and ready to buy a car?

[00:15:57]
Ted Lyons: I think again, with doing your homework and doing your research upfront, when you get into the purchase end of things, there’s other pieces of the puzzle. The dealer’s also going to be offering you products. So from extended service contracts to gap insurance to fabric protection, undercoating, you name it, they have it and they’re going to offer it to you. In a lot of cases, all of those are negotiable. So they may come to you with a very high rate on something and you say, ‘I’m not paying that.’ And a lot of that stuff is available on the outside market as well. You don’t have to buy it from a dealer.

Picture yourself sitting at home watching TV and an extended warranty commercial comes up from a particular company, they’re available elsewhere out in the market. So you can do your homework and know what those cost as well. Knowing what these things are worth and being prepared to be offered them when you’re sitting down, and sometimes they’ll do it in a menu fashion, they’ll present you with…

[00:16:51]
Amanda Greene: A pamphlet.

[00:16:51]
Ted Lyons: Yeah, and they start with the highest and they bring you down to the lowest and the lowest isn’t zero. The lowest is just the fewest number of the products they want to offer you. So you don’t have to take any of it necessarily. Some of it’s good and some of it’s worthwhile taking depending on your financial situation. Gap coverage, for instance. God forbid you have a total loss on the vehicle and you owe more on the loan than the vehicle pays out for through insurance, gap coverage kicks in there. So did you check your insurance company for it? Did you check other carriers? You don’t necessarily have to get it through the dealer.

[00:17:22]
Amanda Greene: Yeah, there’s some homework to do.

[00:17:23]
Ted Lyons: Absolutely,

[00:17:24]
Amanda Greene: Yes.

[00:17:24]
Ted Lyons: Everybody falls in love with the car and they get a little punch drunk when they go to the dealership because you probably drove in with something that maybe isn’t running so great. There’s a reason you showed up to the lot, so you just drove something that’s really nice and now you fell in love with it and you have to have it, and that’s where those rash decisions come.

So the more tips and information you have up front, the better. But are you driving the same type of car you did? Do you know what your insurance is going to cost? Is this car going to double your insurance and make it unaffordable? Have you looked at what repairs are going to cost on this car? Fixing a Toyota Corolla is different than fixing a BMW and I’m not picking one over the other. It’s just a fact of life. Registration’s another one.

[00:17:59]
Amanda Greene: Right.

[00:18:00]
Ted Lyons: So you have to register this new car or transfer the registration from your old car. You’re going to have to pay sales tax on that new car. Are those things going to put that car out of reach for you or cause you some grief down the road? And these are all the things you got to look at that generally people overlook because they see the shiny car and they say, I have to have it.

[00:18:16]
Amanda Greene: Thanks so much for this Ted. Sounds like I have a lot of homework to do, but before I go, let’s bring Nicole Wakelin back for some lightning round questions. Just to be clear, all of these are Nicole’s opinions and recommendations and hers alone, so we’re getting real insider info here. Okay, Nicole, the best fuel efficient car to drive in the city.

[00:18:39]
Nicole Wakelin: Fuel efficient city driving. This is like a lot of pressure. I’m going to go with, it’s sort of a standby, the Prius, which I know isn’t exciting, but they redid it this year and the Prius is small enough to make it easy to drive in the city and great fuel economy with the best gas milage.

[00:18:52]
Amanda Greene: How about best midsize SUV?

[00:18:54]
Nicole Wakelin: Best midsize SUV. And at this moment, I’ve forgotten every midsize SUV on the planet. It’s a luxury car, so it’s luxury, but I really enjoyed driving because it was so tech forward. How about the Lincoln Nautilus?

[00:19:07]
Amanda Greene: Ooh, I love the look of that one. I think my in-laws drive that. How about the best adventure car for road trips or camping, something adventurous?

[00:19:17]
Nicole Wakelin: Okay, for adventure. I don’t know how adventurous you want to get, but I feel like the Jeep Wrangler is the best adventurous car out there. Take the doors off, take the roof off, get muddy and dirty and have some fun with an outdoor vehicle.

[00:19:28]
Amanda Greene: Okay, some broader questions. Winter tires, yes or no?

[00:19:32]
Nicole Wakelin: So, I am big on winter tires. I will go on for an entire podcast about why everybody who lives someplace where it’s cold because it is winter, it’s not snow tires. So the rule is if you’re in someplace where it’s consistently under 40 degrees, when that happens, you should be on winter tires. It makes a huge difference whether there’s snow or even cold. It’s not just about the snow. So yes, yes, yes to winter tires.

[00:19:58]
Amanda Greene: Oh, interesting. Okay. How about a protective undercoating?

[00:20:02]
Nicole Wakelin: I feel like that was something we did many, many years ago because things rusted, but if you look at the warranties that come on today’s vehicles and how they build them, the things they’ve done to protect them, you don’t really need that stuff. You’re wasting your money, I think.

[00:20:13]
Amanda Greene: All right, next one, touch screen or physical buttons.

[00:20:16]
Nicole Wakelin: It’s both. The answer’s both. No matter what anyone tells you, I’m right on this. You need a touch screen for some stuff, but don’t take away people’s volume knob. Don’t put that in the touch screen. Don’t take away the button that will let me turn the heat up and turn it down. Don’t make me dig around in a screen in the latest one that drives me nuts. They’re putting the air vents, so the controls for the vents are in your touch screen, so you can’t reach out and move the vent. You have to touch your screen and then touch the spot on the screen that looks like your vent and slide your finger around. No, that needs an actual physical control.

[00:20:48]
Amanda Green: I agree 100%. This has been wonderful talking to you. Thank you so much for coming on.

[00:20:53]
Nicole Wakelin: Oh, thank you so much for having me on the podcast. It was a pleasure.

[00:20:56]
Amanda Greene: That was Nicole Wakelin automotive journalist, car expert and truck jumper. And before that, we heard from Ted Lyons, Vice President of Financial Services with AAA Northeast Bank. They both had so much good info to share. So many things I hadn’t thought of. The draw of a shiny new car is a strong one, especially if what you’re used to is a little old or things don’t work.

Or, there’s a puddle of some mystery liquid pooling under your car. I guess the things to keep in mind are to pick out what you want beforehand, don’t rush into a purchase, know how much you want to pay and on what terms, and don’t forget to factor in all the extras, like repairs, insurance, registration.

It’s all about showing up already informed. You’ve been listening to Merging Into Life where we navigate life’s milestones, one episode at a time. Brought to you by AAA Northeast with production assistance from JAR Audio. I’m your host, Amanda Greene. If you had anywhere as much fun as I did, follow us wherever you get your podcasts and let us know what you think.

Send your thoughts to podcast@AAANortheast.com. In the meantime, I’m going to figure out how much I really want to spend on this new car.