Written By: Pegah Mottaghizadeh
One of the essentials in Southern California is a car. Once you decide to get a car, you will need to prepare yourself for a little bit of challenging journey especially if you do not have a lot of experience in negotiating with car salesmen. First and foremost, don’t panic and be patient! Buying a car can be fun if you have done your research before you proceed to purchase a car. Assuming that you already have a driver’s license, the first step is to establish your budget and preferences. Ask yourself ‘How much money do I want to spend for a car?’, ‘Do I want a brand new car or is a used one OK?’, ‘What types of car do I prefer’?
Buy, finance, or lease?
Once you know your budget and criteria, you should start your online search. There are several ways to get a car: you can buy at once, finance it, or lease it. If you have enough cash to pay off a new or used car, you do not need to be worried about getting a loan and installments. If not, which is the case most of the time, you may be able to finance it. Financing a car basically means to get a loan to pay off the car in 2 to 5 years. To be qualified for financing a car, you need to have a good credit score, which might be somewhat hard for an international student due to short credit history in the US. In this situation, a person who has a high credit score and knows you well can guarantee your financial ability and be a cosigner for loan application. Note, the cosigner may become a partial owner. Depending on the amount of the loan, credit score, down payment, etc. it can take from 2-5 years to pay back the loan. Another method is to lease a car, which means you rent a car for the long-term. The lease price of a car depends on its manufacturer’s suggested retail price or MSRP. You can pay part of the lease price in cash at the beginning (starting from $1000) and pay the rest over the lease time. The lease option is only available for brand new cars and takes 1-3 years At the end of the lease, you can either pay some money and buy that car or just return the car to the car company (dealer). Note you are responsible for any excess mileage or wear and tear which can add up. Whether you want to buy a car or lease it, you need to negotiate the price. Some negotiation tips could be found in the following: https://www.nerdwallet.com/blog/loans/auto-loans/5-car-negotiating-secrets-for-people-who-hate-haggling/
A new car or a used car?
Buying a new car is an ideal scenario, but as a student, we like to opt for more cost-effective ones. A used car that is not more than 5 years old is a good compromise of the reliability and cost, especially if the car’s warranty is not over yet and it is transferable to you. This way, you are not paying for the car’s depreciation and your car will not require a lot of maintenance. However, buying a used car needs some research and work.
Where to buy a used car?
You can either buy a used car from a private seller or a car dealership. Buying a car from a private seller has some pros and cons. Usually, students can find a used car within their community through a Facebook page (UCI Auto Market) or friends and relatives. If you don’t know the seller, make sure to get the vehicle’s history and inquire about its title status. Some websites such as Carfax can provide you with the car’s history once you provide Vehicle Identification Number (VIN), which could be found on the driver’s side window.
You can find your car with your criteria from online inventories, which is more convenient and faster than in-person shopping. Some websites where you can shop for used cars are Shift, Carmax, Carvana, CarGurus, and Craigslist. Some of these companies send the car to your door for a few days for the test drive. A full list of these online buy/sell used cars is provided in the following link:
If you want to be on a budget and buy a rather new (2-3 years old) used car, it is a good idea to check the rental car sales. The used rental cars are more affordable compared to the similar model of private-owned ones because of their rather high mileage from past drivers. However, they are usually well-maintained, and the reason rental companies want to sell them is to update their inventory with newer models. Some of these rental car sales are:
https://thriftycarsales.com/home/
https://www.hertzcarsales.com/
Have an idea of the price beforehand!
Before going to the car dealership for negotiation either to buy or lease a car, always make sure that you know the market value of the car. Commonly, you don’t get the best price on the first visit. There are several websites like Kelley Blue Book (KBB), Edmunds, or TrueCar that help you estimate the vehicle value based on the year, model, and mileage, etc.. This is the first step to bring down the price of the car to its market value. You can ask the dealers to match the price with the values offered by KBB. Here is where patience plays an important role, as negotiation takes time and courage. Sometimes you need to leave the store (disappointed) because after a while the dealer will contact you with a better price offer. You can continue the haggling remotely via text or email too. Given the current situation with Covid19 and staying home orders, not many people are willing to spend money on cars. This means that you have the upper hand in buying/ leasing a car and you can get a good deal.
Test drive the car!
Whether you decide to lease a car or buy and finance it, you must test it to see if you feel comfortable and safe in it. This is a crucial step in buying a used car. In fact, for the used cars you should have the car inspected by a private mechanic that you trust. Diagnostic checks in a garage costs around $60. Some of the dealerships do the diagnostic check, and after inspecting and refurbishing the car, they will give a limited warranty to it. These cars are certified pre-owned (CPO) vehicles, which are higher in price while lower in risk. To learn more about them please check the following links:
https://cars.usnews.com/cars-trucks/what-does-certified-pre-owned-mean
Final step, paperwork!
Once you picked your car and finalized the price, you are all set for the paperwork. If you buy from a dealership, this step is straightforward as all the registration and owner transferring part will be done by the dealer. This can take up to 2 hours and be done! If you buy it directly from a private seller, all the paperwork regarding the registration is your responsibility.
Oh wait! It’s not over yet, you need car insurance too!
It is mandatory to have auto insurance when driving a car. Buying car insurance also needs some research, but it is way less challenging than buying the car itself. First, you should get quotes from different insurance companies to have an estimate of how much you will pay. This can be done online or over a phone. The price offer depends on several factors. The most important one is your age and your driving history. For international students, it will help to have a copy/scan of your driver’s license from your home country, as it can help with the driving history and getting some discounts. The quote also depends on the car, your state and residential zip code, and the type of coverage that you want. Usually, the lease or financing company requires you to have a full coverage car insurance, which is a combination liability, collision, and comprehensive insurance. Some of the well-known affordable car insurance companies are Geico, State Farm, Allstate, Progressive, Liberty Mutual.
References:
The following links give useful tips for buying used cars.
https://www.requestyourcar.com/blog/
https://www.autotrader.com/car-recall/buying-a-used-car-from-a-private-seller-legalities-206951
https://www.daveramsey.com/blog/how-to-buy-a-used-car
https://www.autolist.com/guides/buying-car-california
https://www.allstate.com/tr/car-insurance/new-used-or-leased.aspx