The Green Swan eBook
Hello again! Thanks for checking out The Green Swan. Before I get to today’s post, Buy a Car Like a Boss, I have a big announcement to share. The Green Swan ebook is published and ready to go! The Green Swan eBook is over 30,000 words, 82 pages on normal 8.5 x 11 paper, and over a year in the making to help you get on the path toward financial independence! To find out more, visit The Green Swan eBook page.
Buy a Car Like a Boss!
Now, back to today’s post. The Green Swan is a way of life. It’s about working harder and working smarter to make money…and more and more money every year. It is also about living within your means; frugal living in a sense, but still enjoying a comfortable lifestyle. You need to enjoy certain creature comforts and make life worth living. And The Green Swan is also about getting things you want, but paying less for them. To that point, today I’m going to outline the decision making process my wife and I went through recently when buying a car, and how we ended up getting a steal of a deal.
This was our first car purchase we have made together. I had always told myself I’d never buy a brand new car. It is foolish and I would be just throwing money down the drain. The first few years of a car’s life are the most expense considering how fast they depreciate. So why not buy a car that is 3-5 years old with 30-40K miles and save $10K off sticker price, right?
That is what I always thought until we began researching cars more diligently. And gradually, very gradually, we began to change our mind and…spoiler alert…we ended up buying a brand new car! What a waste you may say. Why would you splurge like that! You fell into a consumerism trap! That’s not living frugal!!!!
Well, I actually think we won out on this deal. No, we had never splurged on cars before, we hardly ever spent money on our cars. My wife was still driving her college car, a 2002 salvaged title Pontiac Grand Am. And I was still driving a car I got shortly after college, a 2007 Nissan Altima which I bought used. The Pontiac was definitely reaching the end of its life and we knew it was time to trade it in soon (or send it to the junk yard, actually!). We started our family, had a one kid with plans for more and we needed something safer, more reliable, and also more room. It was time to head to the dealership!
We focused our search on an SUV, and more specifically, an SUV with a third row seat. We wanted at least seven seats to fit our growing family and guests. When we have grandparents, other family or friends over, we would want to fit everyone in one car if we go out to eat or journey around town.
That’s not asking too much is it? We wanted something we would be happy with for years and fit our evolving needs over the long term. We definitely wanted to avoid having to up-size our vehicle again and don’t care to car shop again for years. This is a definite characterization of a Green Swan decision process. Practical, nothing hasty, plan for the long term, measure twice and cut once.
As we were researching SUVs that met our needs, watching numerous YouTube video reviews, reading online reviews, checking out message boards for candid user reviews, etc etc. And ultimately what we kept coming back to over and over was the Nissan Pathfinder. Very practical, reasonable, good value for the money, and of course good safety ratings.
So boom, mind is made up. We are getting a Pathfinder. Now what model year? In 2013 the Pathfinder underwent a major remodel. Lots of changes, but overall more family friendly and a stylish new look. So we wanted at least a 2013 or newer. We didn’t need to buy a car right away, but we wanted to get it in the next six months or so. Wanting a 2013 model year or newer did limit us a bit in terms of the availability of used cars on the market, but there were still plenty available.
Why did we end up choosing a brand new car over used? Well, it was October 2015 and on the radio we heard an ad for great deals on all new Nissans at the local dealership (no, I did not get suckered by marketing which I vowed against). While it is no secret that you can get some of the best deals when buying new cars (e.g. thousands off MSRP and/or 0% financing), I needed to know more.
I looked up the dealership online and it looked like a great deal was just starting, $8K off MSRP on the Pathfinder. That actually put the price down right in the range of a lot of the used Pathfinders in the upper $20Ks. On top of that, I remembered that TrueCar, through its relationship with my employer, offered a deal on new cars and I could get another $1K off sticker price (only offered on new cars). This made the price very hard to beat.
But how would we pay for it? We knew this purchase was coming for a while so we saved up in order to pay cash. However, if a low rate loan was available we would definitely consider it. So I googled car loans in my area and found a very good advertised rate of 2% on auto loans from a local community bank. I didn’t bother calling to get a loan pre-approved, just knowing it was available was good enough for now. With all this info in my back pocket, I went to the dealership.
Now it was time to negotiate! Very stressful process, I must say, especially for someone who has never been through the car buying process before. Granted, I have taken numerous negotiating classes and read many books, so I felt prepared. But bottom line, I didn’t get them to knock the price down much more. But what should I have expected, it was already a great offer price. And according to TrueCar, I was getting a price in the top 15% percentile of all purchasers, or an “exceptional price”. Not a bad deal at all. But I did get them to throw in free servicing for the first year!
I was sold! I went against my previously held beliefs of only buying used cars. But I think it turned out to be the best deal. We got a brand new Pathfinder for the price of a 2-3 year old used Pathfinder. I ended up qualifying through Nissan Finance for a loan, 0% down, 63 months, and an interest rate of 1.85%. How could you beat that?! Even though I was ready to pay cash, I figured I could easily invest the money instead and beat the 1.85% rate in the stock market.
The lesson I learned? You can’t go wrong getting a gently used car. It’s a great value and the car should last a long time. But if you plan out your purchase in advance, know what you want, and keep a look out for good promotions, you may end up with the best of both worlds… a brand new car for the price of a gently used car. And with a low interest rate to boot, that’s how you buy a car like a boss!
What do you think? Is it completely unreasonable to buy a brand new car? What else have you considered before buying a car? Let me know in the comments below.
Thanks for taking a look!
The Green Swan
Work Harder, Work Smarter, Retire Earlier and Find Your Beach