OC Dealer

How to pick a car

Car buying is confusing by design. Manufacturers, marketing companies, dealers, even your friends and family – everybody has an agenda, and it is not their job to ensure that you make the best choice. They do want you to be happy with the product they sell you, but no one is going to stop you from making a mistake – if this mistake serves them. But there is hope. If you understand what they want, and most importantly what you want – your chances of making a good choice and enjoying your new car are pretty good.

Car buying process should not start by showing up at a dealership to look at cars, and it should not start by shopping for deals. Getting a deal will cost you dearly if it is the wrong car. Assessing your situation (needs, wants, future plans and budget) and narrowing your choices should be done before you talk to anyone or go anywhere.

Before we even think about what is a good fit for us – there are forces already working hard to make up our mind. Teams are researching demographics, looking for trends, pouring over data to figure out how to get bigger share of the market, and how to get us to buy newer cars sooner. Then marketing agencies employ psychologists to design commercials and campaigns to influence us. We have to realize that it doesn’t matter how smart we are – on average we don’t stand a chance against an army of professionals working around the clock to sell us something. Each TV and radio commercial in the background leaves a print in our mind, each ad on a billboard, magazine, webpage brings return on investment. Each car in a blockbuster move is there for a reason.

All these things are working to create an image of a brand and each model. We develop feelings towards a product before we ever see one in person. Some of these feelings have a life of their own: if your parents drove a VW when you were a baby – you will have feelings towards the brand. Your feelings will have nothing in common with reality because there is absolutely nothing in the new VW Beetle left from the Beetle from the seventies, but in your mind there is, for better or worse. Stories we hear from our friends, news reports, reliability surveys – everything leaves a trace.

Then you suddenly start noticing cars you never noticed before. You start thinking about models, imagining, fantasizing – all while driving your old car. You are on the hook. Inside you already want it, now all you have to do is to justify it logically. So you look for reviews, specials, any kind of validation to your wants, while ignoring or discarding anything that doesn’t support your goal – the new car. You switch sides, and you start selling others on what you want – creating a narrative about how this new thing would make sense: better warranty, mileage, room, drives to the snow, towing of boats – the new life.

This is the time to stop, reflect, and be honest with yourself. Some purchases can’t and don’t have to be justified, as long as you know what you are doing, and why you are doing it. You do have to know how much you are willing to spend on what you want, which means setting a budget, and to do that – you have to know what your starting point is:

How much I am spending now?

If you have a car – are you making payments? How much are you paying insurance? What is your average maintenance cost in the last year or two? How much do you spend on gas? If you don’t have a car – how much do your spend on public transportation, cabs rentals? Average it out to monthly cost, and you know where you stand.

Stretch your budget to the max from the beginning. Many people make the mistake of setting an unrealistic goal of fitting a new car within a very tight budget, and when they realize that it is not going to happen – they don’t know when to stop going over it. So, set your budget high from the start, if you manage to stay under it – it’s all gravy.

Account for possible savings – warranty will save you in repairs, better mileage will cost you less on gas, some cars will cost less to insure.

What is your tolerance for risk? Can you afford to cover an uninspected repair? Can you manage without a car for a week, if it has to stay in the shop?

Needs:

When you think about what you want in a car, start with basic needs: Do you need a car for daily commute to work, to shuttle kids around town, or is it only for shopping and fun? How long is your commute? How many people are going to be in the car daily, once a week, once a month? As a rule – you should not buy a car for one occasion or a possibility in the future: you don’t need a minivan because your in-laws will visit once a month, and you don’t need a truck because you might need to tow a boat. You might be better off renting a minivan once a month, and any recreational activity you might partake in – try it out first, see if you are going to stick with it, then think if you need a car to fit your new lifestyle.

Gas mileage:

Yes, it might hurt to pay $100 per week to fill your SUV or a truck, and yes, it might not be environmentally conscious, but emotions aside – figure out how much it will really cost you to change your car just to save on gas.

Wants:

Life is not all about logic. If you are not happy with the car because it is not what you want – you will find ways to rationalize getting something close to what you want, so it might make sense getting what you want in the first place. Just be honest with yourself.

It is fine to get what you want, just remember that we make decisions emotionally, but we try to rationalize them logically. We pick advice that fits our emotional decisions and discard advice that contradicts what we want. As long as you are aware of why you are making a specific choice – you are more likely to stick to it, since there is not going to be an internal conflict, and when you are at peace with your choice – you are not going to jump from car to car losing thousands of dollars.

We will jump ahead here, but if you are making a radical choice (sports car, convertible, truck) – leasing might be a way to go, because it leaves you an easy way out.

Open mind:

We tend to make it easy to decide by sticking to certain rules. Once we get burnt on a certain decision, or we hear an anecdote about a disastrous choice – we make a mental note never to do that again, but bad things happen to all people, and unless it is scientifically and statistically proven to be a worse choice – we should not eliminate options. With this in mind, here are criteria some shoppers get stuck on:

  • New/used
  • Lease/buy

Brands and countries of origin Our rules come from a lot of different places, starting from our own experience, but there are many other sources:

  • Confirmation bias: once a person makes a decision – he is more likely to recommend others to do the same.
  • Projection: similar, but this makes people ignore differences between individual situations. What might work perfectly for your friend is not guaranteed to work for you.
  • Anecdotal evidence: disasters happen, but one car catching fire out of a million doesn’t mean you should stay away from the whole brand.
  • Reviews/ratings: this is more scientific than anecdotal evidence, but this is still not real science. Reliability ratings are affected by expectations – people expect more from a Mercedes than a Kia, and they are affected by understanding how to use things – new models tend to get lower ratings not because they are not reliable, but because people don’t know how to use new controls and features.

A few points as a conclusion:

There is an ass for every seat, literally.
Accept the fact that there is risk in life, and there is no choice you can make that will be 100% risk free. If you go against the grain and look for something that is not the most popular, recommended or desired – you might save a lot of money.

As of today, while there is still massive support for new car leasing – most people are better off leasing new, and if you really want to buy – buy a 3 year old car. This is when the price is driven down the most by an overflow of lease return, and you still get a relatively new car under warranty.

If you are on the budget, and you need reliable transportation – stay away from luxury. There is a reason old luxury cars are cheap. They can be a lot of fun, but if you need something to get to work every day – get something that was cheap from the start.

Credit for this article goes to Micosilver.