Making the Offer

While home for Christmas I decided to resume my car search after a 2 month hiatus (my previous post published a few days ago was long overdue as those test drives occurred in early October). Now just because I wasn’t searching for a car that doesn’t mean I wasn’t thinking about it, I was. As my friend Chris put it so eloquently “dude, you’re the King of waffling” and you know what, he was right. I have gone back and forth on this car decision more times than I care to count. I’d wake up one day ready to rock n’ roll determined to buy a car, the next I would be telling myself “the Saturn is fine, no need to buy something you don’t need.” However, after more deliberation I decided that if I was going to make a purchase, the last week of the year was the time to make it happen.

First I started off by looking for loan pre-approvals; I checked three sources, Bank of America, BBT, and Chase. Bank of America’s process was simple enough, I filled out the online application and heard back almost instantly, they literally called 10 minutes after I hit the submit button. I was approved for a 72[1] month $16,000 loan at 4.07% not too bad, but I thought I could get better. So next was BBT, one of banks used by my parents. For this route they suggested I call and see what the rates were since I wasn’t an account holder. Ten minutes later the guy on the phone is telling me the best rate I would be approved for was 7.25%, I was shocked, but the reason was because I didn’t have a minimum five lines of credit history. That requirement surprised me as well, five lines seems to be an awful lot of credit. Regardless I only have two, my Chase Freedom Visa and Bank of America Visa. Oh well, on to Chase. I filled out the online application which was similar to Bank of America, but this time I had to wait a day for an email response. I was rejected…why? I have not a clue. I been a customer for 3+ years, paid my credit card off every month (balance is often over $1,000), and have part of my paycheck direct deposited to them. I will be investigating this further and will post what I discover. So in the end, Bank of America it was.

Now that I had financing in order I just had to find the car. I decided during my 2 month break that I wanted a BMW 328i Coupe 2007 or newer. I had been eyeing this one since before thanksgiving it’s list price was certainly over my budget of $23,000 or $21,000 with trade-in but I figured since it had been sitting for a while, there was a good chance they would come down in price (at the time of my offer the list price was $26,976). Before driving out to Tampa to take a look I decided to do some searching near my neck of the woods so I spent an afternoon driving around the Clearwater St. Pete area looking for coupes, and ended up finding nothing I was interested in. The next morning it was off to Tampa to check it out in person. The car was just as nice as online, it was exactly what I was looking for, dark blue exterior, tan interior with wood trim, and spoke wheels. Time to take it for a test drive, upon the initial start the engine made a weird ticking sound, according the sales guy that was normal for a BMW that had been sitting for a while and would go away once driven (and it did). Music to my ears, the car had been on the lot for a few weeks now and because of this clicking I knew no one had driven it for quite some time. We took the car out and everything checked off, as I pulled back into the dealership I was ready to make an offer.

Turned out the sales guy Nick who had been helping me out up until now couldn’t talk about the offer and had to get a “numbers guy” to take over if I wanted to make one. Which looking back was unfortunate, because Nick was a great guy and had made the experience up until that point a pleasurable one. No “number guys” were available at that time so he hooked me up with the owner. At that point I was feeling really good, I found the exact car I wanted, it had been sitting for weeks, and I was about to talk to the owner who has the most wiggle room, which meant I wouldn’t have to deal with the “aww I got to check with my manager” crap, sweet! But this is where the story turns, the owner brought me into his office and proceeded to take me on a 20 minute sales pitch about how great the dealership is, how they don’t offer the antiquated financing technique of add-on loans (which I am pretty sure is not used anywhere, and is possibly illegal), he busted out the paint meter and told me they are the only dealership who uses one, told me how many vehicles they sell each month, and showed me pictures of the dealer auction of where they buy their cars. The real kicker was when took out a binder of email print outs from Gmail to show me “proof” of why a car-fax is unreliable and how every car from Miami is junk…I have no idea who would buy email print outs as proof…for all I know he could have typed them up and sent the “proof” to himself. Once we got past all this, I made my offer, which I knew was lowballing him, but I figured start low and work our way up. I offered $19,000 plus my trade in; he looked at me then got up and left the office mumbling something about being too far apart and not playing the numbers game. I sat there for a second to register what happened, then I got up and walked out. A bit flabbergasted by the utter rudeness of the owner I got in my car and left.

As I drove home I was a bit bummed that a counter offer wasn’t made. I decided I was going to give it two days and if I still wanted the car, I would call back and make a second offer. Well two days passed and I still wanted it, I called up the dealer to make my 2nd offer $23,000 no trade. The conversation was short and to the point, the “numbers guy” insisted the best they could do was $28,000 out the door. Since that was the case no deal was made. So, here I am few weeks later still driving the Saturn, but still looking for the right deal. My first car buying negotiation didn’t quite go as I expected, but hey, I learned a few things this time around and will be better prepared when I make the next offer.

Update: As of 1/15/12 I noticed the car had dropped in price to $23,976, a $3k reduction, so much for “the best we can do is $28k out the door.” I am considering putting in a third and final offer, $24,000 out the door, no trade in, what do you guys think?

[1] The reason I chose 72 months was to give myself the most flexibility in terms of the monthly payment. I don’t intend to take the full six years to pay off the loan, but if there is a month where I can only pay the bare minimum I wanted that payment to be the lowest amount possible.

Buying a Car – Test Drives (2)

See part one here

Lexus IS250 – 2008

What I liked: Overall it is a very good looking car, (if you haven’t noticed by now, a cars looks are very important to me). That it has four doors, having driven a door two for 8 years I know there are times when four would really come in handy. It had a very functional interior; many cup holders, little storage spaces, and logical layout for controls.

What I disliked: The drive was very mundane for a car that is marketed as “sporty.” Lack of power and lose steering did less than impress.

Other notes: Basically reminded me of driving a really nice Camry…

Mercedes C300 – 2008

What I liked: Not much, the Mercedes badge on the front?

What I disliked: Wow was I underwhelmed with this car, I had never driven a Mercedes, maybe rode in one once, but I expected much more. I think I have been in Fords nicer than car I test drove. Overall the car was just a let down, maybe because this is their entry level model? I could write a list of everything I disliked or just save us both the time and say see below…with that said, see below.

Other notes: Drove like…an overpriced four door sedan.

Infiniti G37 coupe – 2008

What I liked: Intuitive controls for the radio, A/C, etc, luxurious interior and kick ass factory Bose sound system. The 330hp engine and the mean growl it made when I punched it. I believe it shares its engine with the 350z, which is one of my favorite sounding cars.

What I disliked: no sunroof, breaks seemed a little weak for a car with that much power, driver seat head rest is in the way of checking for blind spots, and really small back seats. Overall the car certainly felt used, more so than the other 2008’s I drove even with only 37k miles on it. That makes me wonder if it was just the particular car I drove or if all Infinities hold up questionably over time.

Other notes: Out of all the cars I have driven so far this had the best combination of luxury, performance, and price




Buying a Car – Test Drives (1)

So instead of just blogging about the financial aspect of buying a car (see New vs. Used) I figured why not have a little fun and write about the test drives as well. If nothing else it will help me keep a record of what I liked or disliked about each car and ultimately help me chose what to buy.

Dodge Challenger RT – 2009

Now, I drove this car over a year ago (I wasn’t lying when I said I had been thinking about buying a car for a looooong time) so my memory may be a little rusty but I’ll do my best.

What I liked: The power, this guy had a kick! With a V8 hemi it would certainly be fun to drive. The exterior styling, this is one mean looking car, I especially like the front.

What I disliked: The interior styling, it’s just very bland, all one color, and nothing really to get excited about. No additional features beyond the standard power windows, locks, and a CD player. It might have had an AUX (iPod) input but I can’t remember, I’m sure it’s at least an option. The price, you are paying for great power and exterior styling in an otherwise ordinary car.

Other notes: The test drive was lackluster and I pretty much was only able to drive in a straight line, I would need to drive again to judge handling and overall drivability

BMW 328i Coupe – 2010

I was looking for a 2008 or 2009 model but, unfortunately the dealer did not have any in stock. However, he told me the 2008 – 2011 models of the 328i were all pretty much the same except for some options and small exterior styling cues.

What I liked: This is one sexy machine, I am a huge fan of the exterior styling of both the coupe and convertible 3 series models, the sedan is OK until you see its backside (wtf happened…). The interior was very nice, leather seats, nice trim, dual zone climate control, sunroof, power everything, etc. It just felt good to be sitting in the drivers’ seat, and actually got me excited about the car. The car itself just felt solid, I don’t know how else to explain it, perhaps it’s the build quality, but when you shut the door there is a solid thud, opposed to an echoy slam like some other cars. Immediate power when the gas was pressed, no waiting for the engine to rev up for the power to kick in.

What I disliked: For some reason I couldn’t figure out the damn radio, I kept turning it to AM and couldn’t switch back, I’m sure the sales guy was laughing at me in his head. Actually the whole control panel for the A/C – radio was a little confusing…maybe I’m too used to my simple controls. I thought the car would be a little peppier than it was, I didn’t feel the umpfh of being pushed back in my seat when I punched it. It was hard to tell how fast I was going.

Other notes: At first I wasn’t too impressed with the test drive but the more I think about it the more I like the car, I would certainly need to give it another test drive before I could say I would buy one.

Buying a Car – New vs. Used Part Un

I have been playing around with the idea of buying a car for probably over a year and a half now. I still own my very 1st car – a 1998 Saturn SC2 with approx 105,000 miles on it. I just hit the glorious 100k mile mark a few months back. I took pictures and all! I purchased the car in 2003 and will have owned it for eight years come October. My delay in purchasing a car hasn’t been affordability, it’s that I can’t justify spending tens of thousands of dollars when I have a car that still runs. The name of my blog is 100% true; I really am bad at spending money.

However, over the past six months I have come to terms with the fact that I will eventually have to buy a car, as much as I don’t want to spend the money. I have also decided that it is better to be prepared and know what I want to buy and actually buy it before my current car dies. So, I have begun the long process of researching potential replacement cars, thus commencing the whole car buying process. In the midst of all of my research, I have come across many articles on new vs. used cars. The general consensus from a financial stand point is that a used car is always a better choice than a new car – this is something that I also agree with. Mainly because a new car, once driven off the lot, immediately begins losing value; where a used car already took that deprecation hit allowing you to buy it at a discount. Well, at least that used to be the general consensus. Over the past few weeks, I’ve seen a few articles from “financial pros” (looking at you Clark Howard) stating that now it is actually better to buy new. This doesn’t quite make sense to me, but the logic behind this idea states that due to the crappy economy, buying new is actually cheaper than buying used. They claim that the demand for used cars is at an all time high (because of low supply), thus driving up the prices.

I don’t buy it. So I decided I am going to do my own pricing research and post the results here. To keep myself accountable, I will be posting this before completing any price specific research so my opinion is loud and clear. I shall conduct my research over the next few weeks or so; then, I will either claim victory over the “pros” or walk home humbled.

So what do you think, will the finance pros be right, are new cars currently a better bargain than used?