Author Topic: Buying First Car for Inexperienced Driver - Know Nothing about Cars  (Read 1988 times)

Claudius

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Hello,

I am thinking of buying a used car for my wife. Wife is currently in law school in a LCOL area, and I live and work in HCOL. I spend with her 10 days a month and she doesn’t know how to drive a car. We are thinking of buying a used car so she can drive to school.

Now, a few things come to mind. I don’t know anything about cars, and I am actually a bit afraid of driving so I could live car-free my entire life and I’d be fully happy in a city with good public transportation. However, the car is for my wife, the city where she lives is very very unfriendly to bikes and she uses Uber to go to school. She lives 2.5 miles from her school, and although walking could be an option, she has to carry heavy books on the way to school, and there are no sidewalks in some parts. Uber seems to be the only option, but it gets very expensive because going to school and back costs around $300 a month and we have to Uber to go to other places (which could cost from $5 to $15 one-way). Overall, every month she spends around $400 on Uber, and where I work I spend at most $100 on public transportation.

We didn’t consider buying a car before because we did not have enough money for a down payment and none of us were working full-time. To give a bit of detail about our finances, I worked as a software developer part-time while going to school and this offered me enough income so the two of us could survive in our respective cities. Now I’ll start a full-time job soon with $110k salary and my wife will earn next year around $20k, so that leaves us with $130k gross salary a year for the both of us. We expect to save at least 50-60% of our net income and possibly more when she graduates from law school.

We could buy a car with cash in a few months. No problem with that. And we would be driving at most 5k miles a year. If I were experienced with cars or knew someone with experience to go with me, I’d buy the car in Craigslist, spend 5-10k and keep it for 10 years or more. The problem with that is I don’t know anything about cars and I don’t want to risk it; I have a few months to learn about cars, but because I’ve never owned one before, I don’t want to risk buying one on Craigslist, especially because my wife would mostly drive it, and she doesn’t really know how to drive a car well; her family has never owned a car before, so she’s had very little exposure.

In my inexperience, I am considering buying a used car in a dealership in the $10k-15k range, with low mileage so it wouldn’t require a lot of maintenance for a while, and so my wife could drive it comfortably. I don’t really know if it’s a good idea, but according to my calculations, worst-case scenario: even if we financed the car + insurance + gas + 5k miles per year, it still wouldn’t be much higher than $400 a month. So at least we’re still spending $400 a month but we have a car that could last us 10 to 15 years or more. The other option is risking it, spend in the $5k-$10k range and save more money, but we’re already saving 50% of our net income. In addition, we are in our early 20s and we don’t really want to FIRE by 35 or 40, we just want to eventually become FI and enjoy life without too much spending.

Any advice would be greatly appreciated. I apologize for the long post!

Buffaloski Boris

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Couple things come to mind:

- maybe your wife could ride a bike instead? One with a back rack and panniers to carry heavy books.

- I’m a big fan of Fine Ancient Vehicles. The older and more used, the better. Get a car that has a really good platform like a Toyota Camry or Corolla or some Volvo’s and you’re probably not going to have a problem. Some folks swear by the Prius. Newer is not necessarily the most reliable.

SwordGuy

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One person's "not safe to bicycle" town is another's "I bike everywhere!" town.

So the first thing to do is to decide whether your calibration about what is safe or not is off base.    For a typical American, the answer is almost certainly "yes".   Make that "YES!"

Assuming your calibration is correct, the second thing to decide is whether there are buses that can be used or whether a different place to live with a safer biking route could be used.

Third is to see if there are any ride-sharing options, i.e., fellow students who have a car and are going the same way and only use Uber when she needs to.

Fourth, get the car.

A low mileage car is likely to be fine unless it's been flooded or the frame is bent from an accident.   The carfax will give you warning signs to walk away from

Sounds like your probably in a situation where you're unlikely to make a bad choice and that's a good problem to have.

RWD

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Some resources (copy/pasted from the link in my signature). I highly recommend a pre-purchase inspection at a third-party mechanic if you don't know anything about cars and don't have a mechanic friend to bring with you. A small Toyota or Honda hatchback on sedan should be fine for your needs.


Research
Fuel economy: https://fueleconomy.gov/
Safety: http://www.iihs.org/iihs/ratings
Reliability: http://www.dashboard-light.com/

Shopping
Craigslist
AutoTempest
Autotrader

Due diligence
NMVTIS report ($2 per car)
Pre-purchase inspection
Read and understand all paperwork (dealer purchase)
General, misc.

Purchase
Read up on your state's policies for transferring a car title and registration
Inspect the title (no brands, in the name of the person selling the car, etc.)
Get pre-approved for financing ahead of time, if applicable (credit unions tend to be the best). You can get some really low rates, even on used cars (I got 1.69% recently).

cchrissyy

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Is she in a state with sales tax? where I am, it's an extra 8% of the purchase price even on used car sales from a private seller. 

Also, you might be forgetting the cost of parking on campus. What will that be?

I think driving is a good skill to have but I also think she won't be too comfortable driving and won't use the car as much as you think.  And are you forgetting the cost of driving lessons and a license? and insurance?  Honestly this sounds like a short-term problem and it's already solved with uber. it will be more expensive, not less, to solve it with car ownership. your best bet to actually lower the cost is carpooling or biking.

BicycleB

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You can pay about $120 for a professional car inspector to do a very detailed inspection of a used vehicle that you buy from a private party (a private person). Well worth it.

You can find the private party through Craigslist. Bargain the price down to account for needed repairs that are discovered by the inspector - you'll get maybe half what you ask for, I suspect.

$3000 to $5000 for purchase and $500 to $1500 for repairs should get you a fairly reliable vehicle, one with a good chance of running for years. I wouldn't waste the money on a car costing over $10,000 in your situation. You can use Yelp to find mechanics these days.

lentil

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Are there no buses/trains/transport where your wife lives? No options to move closer to campus (even for a slight increase in rent)? Buying a car sounds like the most expensive, higher-stress option, especially given that your wife doesn't know how to drive. Is parking free where she lives? Have you added up the costs of obtaining/maintaining a driver's license, driving lessons, insurance, and car registration?

APowers

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Is she in a state with sales tax? where I am, it's an extra 8% of the purchase price even on used car sales from a private seller. 

Also, you might be forgetting the cost of parking on campus. What will that be?

I think driving is a good skill to have but I also think she won't be too comfortable driving and won't use the car as much as you think.  And are you forgetting the cost of driving lessons and a license? and insurance?  Honestly this sounds like a short-term problem and it's already solved with uber. it will be more expensive, not less, to solve it with car ownership. your best bet to actually lower the cost is carpooling or biking.

This. Unless SHE wants a car, AND is going to learn how to buy old+cheap+reliable, AND is going to do all her own service/maintenance, buying a car will almost certainly not work out to be cheaper than her current solution of Uber ($400/month).

You can check out this thread about how much a car costs in practice and notice that even the folks who have $5k cars with very low maintenance spend $200-300/month. A $10k car will easily push you over the $400/month break-even threshold.

I love having a car, and I think it's a great tool. But in your case, I think you're really stretching it to justify switching from the current no-car strategy that seems to be working pretty fine right now. Especially since you hate cars/driving, and she is incredibly inexperienced with them.
« Last Edit: May 18, 2019, 07:53:49 AM by APowers »

BicycleB

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@APowers, excellent reply!

For walking in areas without sidewalks - I've done that commute on foot myself before. With heavy books, she'd be getting her exercise, which makes it time partially well spent. She could wear reflective gear (hat, vest, shoes, headlamp) to increase her safety. So maybe on some days, Uber not needed. All options except the car reinforce each other.

In any case, each option has different profiles of time and effort. Uber is probably the easiest. Learning to drive a car is a time and brain occupier because of the newness, walking takes time but has inherent benefits. Biking might be safer than you think; I'm not sure. You could argue that learning to drive while in school is better so that she has the skill prior to graduation, but in my opinion the decider should be her.

What does your wife want? Walking, Uber, bike, combination, or car?

GizmoTX

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OP, I agree that buying a car for a non-driver in this scenario sounds like an exercise in stress & will not save the money you think it will.

In addition to parking fees & availability, be sure to price out auto insurance for a new driver. You will also need an emergency fund just for car maintenance.

rothwem

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Re: Buying First Car for Inexperienced Driver - Know Nothing about Cars
« Reply #10 on: May 19, 2019, 07:32:31 AM »
One person's "not safe to bicycle" town is another's "I bike everywhere!" town.

This. Most places aren’t that bad to ride in. Some are definitely worse than others, but in most established towns, there are neighborhoods you can cut through rather than taking the giant roads you’d normally drive on.  When I moved to Raleigh for school (not really known for being super bike friendly in 2004), I didn’t have a car and I learned my way around the town “the bicycle way”. It drives my wife nuts since now when I drive there I take “the bicycle way” where my max speed is ~35 everywhere instead of the freeways where I can go 70.

While I think it’s a good skill for an adult to be able to drive, I think a bicycle is the correct tool for this job.

If you’ve got to get a car, maybe an electric car is the way to go? Does she have charging capabilities at her apartment? Used Nissan Leafs are ~6-10k at the low end.

Raymond Reddington

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Re: Buying First Car for Inexperienced Driver - Know Nothing about Cars
« Reply #11 on: May 19, 2019, 07:40:15 PM »
Buy certified pre-owned, and get a vehicle that is at least 3 years old. That will have the biggest depreciation chunk taken out of it. Get something that meets your needs. If it's just for your wife, make sure it's mainly her decision, but stick to a budget and agree on it. Try to get something with the lowest fuel costs (highest MPG) in the class you both decide is best.

Depending on where you live, bikes absolutely can be dangerous, so I'm not going to say "bike anyway"...that's your wife and her safety is everything to you as the safety of my wife is to me. Uber is a ripoff since you're basically paying for someone else to own and operate their vehicle, plus profit for two middlemen (Uber and the driver). The costs of some vehicles are very high because many people hang onto cars longer than they should and end up spending a fortune in repairs. There is a happy middle where you don't.

Things you should know before you go to the dealer though:
-Stay away from "used car lots" - go to a dealer affiliated with a brand that sells new and used vehicles.
-Shop inventory online before you go. Only go to dealers that have vehicles in inventory that pique your interest.
-Be crystal clear in what you are looking for, and don't be afraid to walk out if you don't like the numbers, the vehicles or both
-Don't worry about the car payment, worry about the total cost of the vehicle.
-Get quotes on financing from your bank before you go to the dealership. Dealers are allowed to mark up the interest rate by the bank and resell it to you at the higher rate and keep the spread, as long as the spread is less than 2%.
-Do internet research on the KBB value. Expect to pay slightly over that for certified pre-owned, but not significantly over that. IE, if KBB says 7K, expect to pay maybe 8K-8500 or so, not 10K+. Don't be afraid to negotiate, but be reasonable.
-The dealer should be offering you a free warranty on a certified pre-owned vehicle. 3y/36K is pretty standard. That said, don't buy extended warranties or service plans.
-You should not visit a dealership less than twice to buy - once to gather information, and once to close once you've prearranged your insurance quote and financing. Tell the salesman up front you are there to get information on your first visit, and you will not buy. And stick to it.
-Dealer add ons - do your research and don't overpay. Most you'll want to skip. Nitrogen in tires does absolutely nothing for the average driver. Don't pay for it.
-Test drive before you buy.
-When actually getting insurance, take an online defensive driving course. It takes a few hours but will significantly reduce your premiums.

Regarding cars:
-Check for recalls and technical service bulletins on whatever car you are looking at
-Do not buy any vehicle with a CVT transmission, these have been problematic over the years especially if you are looking to be mustachian and drive it for 100K miles or more.
-Do not buy any vehicle that was used as part of a fleet - these take much more abuse, especially if they were used as rentals

Happy hunting!
« Last Edit: May 19, 2019, 07:50:16 PM by Raymond Reddington »