Facing My Financial Fears: Buying A Car

This week, The Simple Dollar is doing a five part series on financial topics that scare me just a bit. Researching and then writing about them will (hopefully) alleviate some of that fear.

Purchasing a car is a significant financial move for many of us. It’s almost traditional to visit several dealerships, select one, and arrange for financing. Yet the process of selecting a car is one that often paralyzes me with fear, which is particularly ominous as a car purchase slowly creeps into the picture. Here’s why.

Auto purchases are an expensive gamble.
I have owned three automobiles in my life. All of them were purchased used. Two of them turned out to be good deals, but one of them was a rancid lemon to say the very least.

Many people argue that one should buy late model used for the most bang for the buck, but the lemon I purchased was a late model used. This has made me extremely timid when considering a late model used car.

It’s hard to determine my long-term needs.
Right now, my wife and I are planning on having another child sooner rather than later. We both agree that we need a minivan if we have another child, but right now we’re getting by just fine with our truck and mid-sized sedan.

Since the truck is the one likely to be replaced, our current question is whether to investigate a similar truck or switch to a minivan. I’m fine with driving either one, but one suits our needs better now and the other will likely suit our needs better in a couple years. This adds to the general apprehension of a vehicle purchase.

The amount of research is overwhelming.
I’ve been investigating both new and late-model options for both trucks and minivans and the avenues of research are almost overwhelming.  There are countless publications out there offering lists of what the best models are in each class, but these lists often contradict each other and some of them have a vague suspicion of being directly influenced by the car manufacturers.

Even if one is able to get the list quickly down to a small subset of models, how does one determine which model from among the candidates?  Does price purely win here, or do you look for other aesthetic options?  The complexity is impressive, particularly when looking at a piece of equipment you will have to interact with daily for years.

What options do we want?
Do we really need most of the fancy options available on newer models? Do we need an in-car DVD player? I think no; my wife thinks yes. On the other hand, I’d like to have a good audio system, particularly for longer trips.

Again, the number of choices is nearly overwhelming. For example, we are currently leaning towards purchasing a new Pontiac Vibe, but the potential options are just incredible.

What can I do?
I need to sit down and set up a clear identification of exactly what I want. A comparison of drawbacks and benefits of a minivan versus a truck as well as a new versus late model used needs to be assembled. Once we’ve figured out a model, we then make a list of the options that we require and a list of the options that we’d merely like to have, then we start going comparison shopping at local dealers, as we have access to a lot of dealers in a fifty mile radius.

The process is daunting, but by breaking it down into steps, I think I can begin to finally make real progress towards an automotive purchase.

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