Buying First Car on Tight Budget

mysticalmalady

Brand new poster here. I will preface with the context:
I am 19, female, looking to purchase my first car (not a huge rush but my parents will be glad when I don't need to borrow their vehicles anymore), I am inexperienced, just got my license this year but so far I have not been in any accidents. I label myself a very cautious, borderline timid driver. Oh, and I live about half an hour outside Columbus OH, where people drive like they're already dead.

Okay, so I'm not a moron, but I admit I know very little about cars. My input from family is limited because my father for the first 55 years of his life refused to drive anything but a Honda. He now drives a 2015 Camry which he seems to like. My mother, now.. has been through the ringer with cars. Saturn, Buick, Ford.. she is on a 2007 Ford 500 now which, while I must say I like driving, is a monster to maneuver. It is a huge and wide vehicle IMO.

Now for the specifics of what I am looking for..
Transmission needs to be Automatic. I tried manual which was ok but while I'm this inexperienced I want to focus on one learning thing at a time. I do need reliability. I'd rather pay now for a car I will have for a while than go through one every two years. I take care of my things, so I am planning to do all the upkeep on time.

Budget is my killer. I am at about 6K top dollar right now- looking at in and out with that number- if I wait a few months I could maybe bump to 7K. I am biased towards buying over leasing because I want to avoid a payment, but provided the payment wasn't bad or my options to buy were that limited, I am not wholly opposed. . I would like something with a lower insurance premium.. if possible.

Cosmetics don't matter much to me, but I will say I like the look of the luxury sedans. especially Lexus.

Makes I would like to avoid, just because I have read/heard bad things: Pontiac, Chrysler, Dodge, Mitsubishi
Makes I don't mind but have heard are expensive out the rear to maintain/repair: Audi, BMW, MB
Makes I am looking at for reliability, decent fuel economy, overall good impressions from my research: Acura, Honda, Lexus, Mazda, Subaru, Toyota

feel free to offer additional insight or correct my thinking on any of those. I have been scouring the internet looking for different things, KBB has been my right hand man in this journey so far.

I am wary of many dealerships which is why I am here. Went to look at a car couple weeks ago and they snatched it into service then refused to bring it out.. so weird but very off putting. Any advice on handling that would be appreciated too.

Thanks in advance!

Michaell

mysticalmalady said:

Brand new poster here. I will preface with the context:
I am 19, female, looking to purchase my first car (not a huge rush but my parents will be glad when I don't need to borrow their vehicles anymore), I am inexperienced, just got my license this year but so far I have not been in any accidents. I label myself a very cautious, borderline timid driver. Oh, and I live about half an hour outside Columbus OH, where people drive like they're already dead.

Okay, so I'm not a moron, but I admit I know very little about cars. My input from family is limited because my father for the first 55 years of his life refused to drive anything but a Honda. He now drives a 2015 Camry which he seems to like. My mother, now.. has been through the ringer with cars. Saturn, Buick, Ford.. she is on a 2007 Ford 500 now which, while I must say I like driving, is a monster to maneuver. It is a huge and wide vehicle IMO.

Now for the specifics of what I am looking for..
Transmission needs to be Automatic. I tried manual which was ok but while I'm this inexperienced I want to focus on one learning thing at a time. I do need reliability. I'd rather pay now for a car I will have for a while than go through one every two years. I take care of my things, so I am planning to do all the upkeep on time.

Budget is my killer. I am at about 6K top dollar right now- looking at in and out with that number- if I wait a few months I could maybe bump to 7K. I am biased towards buying over leasing because I want to avoid a payment, but provided the payment wasn't bad or my options to buy were that limited, I am not wholly opposed. . I would like something with a lower insurance premium.. if possible.

Cosmetics don't matter much to me, but I will say I like the look of the luxury sedans. especially Lexus.

Makes I would like to avoid, just because I have read/heard bad things: Pontiac, Chrysler, Dodge, Mitsubishi
Makes I don't mind but have heard are expensive out the rear to maintain/repair: Audi, BMW, MB
Makes I am looking at for reliability, decent fuel economy, overall good impressions from my research: Acura, Honda, Lexus, Mazda, Subaru, Toyota

feel free to offer additional insight or correct my thinking on any of those. I have been scouring the internet looking for different things, KBB has been my right hand man in this journey so far.

I am wary of many dealerships which is why I am here. Went to look at a car couple weeks ago and they snatched it into service then refused to bring it out.. so weird but very off putting. Any advice on handling that would be appreciated too.

Thanks in advance!

You've certainly come to the right place.

You've provided a lot of background on your situation, but one thing that would help us is this:

How much do you drive? Are you going back and forth to school? Just in town errand running? Clandestine trips to Cincinnati? Just you in the car? What about stuff - would a hatchback or wagon suit your lifestyle, or can you get by with a sedan or coupe?

If we can get some perspective on how you plan to use the car, we can help. I'll call in some reinforcements, who will likely pepper you with even more questions. Stick close to this thread - the more we know, the more we can assist.

mysticalmalady

Thank you for an expedient response.

I am glad to hear it! Reviews and articles get you so far, but real people are the best level IMO.

Haha, no clandestine trips for me. I'm looking at to and from work, about 10 miles round trip, occasional errands.. Very limited extensive travel for the foreseeable future.

I'm definitely more of a sedan kind of gal, or perhaps SUV. Nothing "Escalade" sized, but I'm not keen on coupes (I like the standard 4 door). Trunk space would be good, but not a necessity.

It would mostly be just me in the car, occasionally maybe one other person.

Michaell

mysticalmalady said:

Thank you for an expedient response.

I am glad to hear it! Reviews and articles get you so far, but real people are the best level IMO.

Haha, no clandestine trips for me. I'm looking at to and from work, about 10 miles round trip, occasional errands.. Very limited extensive travel for the foreseeable future.

I'm definitely more of a sedan kind of gal, or perhaps SUV. Nothing "Escalade" sized, but I'm not keen on coupes (I like the standard 4 door). Trunk space would be good, but not a necessity.

It would mostly be just me in the car, occasionally maybe one other person.

Good deal. I've sent up a flare to our in-house regulars who love to share their opinions, and help spend other people's money.

With the budget you've shared, you've got a few options:
1. Finding something pretty well used (but maybe under 100,000 miles) and pay cash for it
2. Use the saved money as a down payment on something in the $12-15K range, and make payments on the rest
3. Lease a decent compact sedan (Corolla, Civic, Elantra).

With option 1, you run the risk of getting something that will constantly need work - do you have the time, the patience or the money to keep something like that on the road?

With option 2, you can likely get a pretty new car (2016 or newer) and have something reliable, but not outrageously expensive to maintain beyond normal maintenance.

Option 3 - New gets you ... new. Warranty, dealer service, new car smell. Do you have a payment budget in mind, if you decide to go that route?

andres3

I say that your father was a genius, and probably smarter than you know or realize. Honda makes very reliable cars. Tried, true, and trusted is valuable in this world and life.

However, they are not the only reliable make. If you are just looking for a lot of low cost miles you almost can't go wrong with a Civic/Accord, or Camry/Corolla. Avoid salvage titles, previously wrecked vehicles, flooded vehicles, and you should do A.O.K.

mysticalmalady

1. I have been scouring for a decent vehicle in this area, with very little success. Honestly, the only car I have found under 6K that is under 100K mileage is a 2008 Mazda CX-7 Grand Touring AWD which has clean records but, I'm not sure on age how much that affects longevity. It is already at 90K miles anyway.
2. I could do this, it definitely frees me up more to choose something better and possibly under warranty still. My main concern here is.. I would be able to make payments assuming I used the entire 6K on the down payment, my job remained steady, and I had no accidents, repairs, or maintenance costs steeper than a couple hundred dollars. Not to mention title/tax/fees. So a possibility, but I would have to be meticulous in budgeting.
3. This is a new idea for me. I hadn't considered leasing. I would be most comfortable with a monthly payment between 100-200 dollars, with 300 being the absolute topline to preserve what goes into bills and savings as well as having some extra cash at the end of the day. (is it ever really extra?) I am close to Columbus, so for me, I have a lot of options especially in the Easton area (lots and lots of dealers... Lexus, Mercedes, Honda, Acura, Toyota, Mazda, there's even a Land Rover dealer, which I never even knew was a thing.

I would have to discuss leasing with my parents, who already panic at my spending habits. I am exceptionally frugal, but let's be honest, inflation is a big thing. Two years ago I paid 30$ a month for a smartphone. Now, for the bare minimum to keep up with ever changing software, it is 100$ a month. What is attractive to me is the warranty coverage on a lease, so I'm not liable for maintenance aside from basic things.

mysticalmalady

andres3 said:

I say that your father was a genius, and probably smarter than you know or realize. Honda makes very reliable cars. Tried, true, and trusted is valuable in this world and life.

However, they are not the only reliable make. If you are just looking for a lot of low cost miles you almost can't go wrong with a Civic/Accord, or Camry/Corolla. Avoid salvage titles, previously wrecked vehicles, flooded vehicles, and you should do A.O.K.

I am desperately trying to stick with clean titles and no accidents/recalls. My dad is definitely a Honda fan, the car I was initially going to drive was a 1999 Honda Accord, he bought it brand new the year I was born and when we sold it, the promotional brochure for that year's models was still in the car. I hated to let go of it but being so new.. manual didn't sound fun.

nyccarguy

I think you are an excellent candidate for leasing. Take that $6K you have to put “down” in a checking account. Use that to make your monthly payments.

stickguy

Agreed. Your situation does support leasing. You can save your nest egg, and get a low payment. In 3 years, you can either buy out your lease, or have hopefully saved some extra money and at that point can buy something else slightly used. Just think of leasing as making the payments first, and making the down payment at the end!

I would stick with a sedan. Cheaper to buy or lease and usually get better MPG.

The best thing about leasing, because of the benefits of a new car (reliable, under warranty, no maintenance cost other than occasional oil change) is the cost certainty. You know exactly what it will cost every month. The down side is if you beat it up, might have issues at turn in (but you can add a protection plan to cover that). Of course, if 3 years from now you love the car and it only has 20,000 miles on it, can just buy it for the residual, still have warranty, and know the car.

a used car in the 5-6K range that is super clean and won't have regular $ needs is going to be tough. Plus, you blow your savings on it, and if something goes wrong, you still need to come up with the money.

Right now, some really strong deals on the Kia Forte and especially Hyundai Elanta. Or for a little more, a Sonata. Can also do well on a VW Jetta. And good thing on these, if you buy it at the end, still have full warranty coverage for 2-3 years. All get good mileage, and plenty of features.

2nd best option is a 2-3 YO car for ~ 12K, put down 1/2 you money and finance the rest to get into a comparable payment, and eventually own something outright (though 6-7 years old by then), Elentra is also a good option for this.

texases

You might go buy the Consumer Reports car buyers guide, lots of info on used cars, which are reliable, which they recommend at various prices.

andres3

In my sample of 1, the Kia Optima I leased has a risidual value north of $13,500 but a reliable pricing source @qbrozen pegged it at 11,500 tops/best at 32,000 miles, whereas the residual is at 36,000 miles. So in some cases, buying out your lease won't make any financial sense whatsoever.

stickguy

Buying out is always case by case. Essentially just another used car, but you know the history.

Michaell

stickguy said:

Buying out is always case by case. Essentially just another used car, but you know the history.

Yeah, but is that worth a $2000 premium over market value?

stickguy

That’s the case by case. Sometimes the residual is market correct.

I also suspect that Andres number from Q is trade in. Residual needs to be compared to retail pricing when deciding whether or not to buy it.

JMillertime

If I were in your spot, I'd seek out a slightly used Honda or Toyota. With your budget, you should be able to get something that's not too old and they're not too bad on maintenance costs. Plus good gas mileage.