How to buy a car from start to finish (our car-buying stories) / 91
Buying a car can bring up a surprising amount of financial stress. It’s a big purchase, there are approximately a million numbers to consider, and the dealership experience doesn’t exactly make things simpler.
Within the past couple of years, we both went through the car-buying process. Cassidy bought a brand-new Kia Niro, while Emily chose a certified pre-owned Subaru Crosstrek. We had different budgets, financing situations, and priorities, but we walked away with many of the same lessons.
So rather than telling you there’s one “right” way to buy a car, we’re breaking down what helped us make decisions we felt good about — and what we’d want to know before doing it again.
Episode highlights
[00:00] Why buying a car can bring so much financial stress and overthinking
[05:30] What we each wanted in a new car — and how we set our budgets
[12:00] How we researched cars and narrowed down our options
[18:00] Choosing between new and certified pre-owned vehicles
[24:30] Getting into the numbers: financing, interest rates, and negotiation
[32:30] Negotiating thousands off the purchase price — and the tactics that helped
[43:00] Buying certified pre-owned, paying cash at the dealership, and navigating a trade-in
[52:00] The extra costs of car ownership, from insurance to winter tires
[58:30] Car-buying rules of thumb, loan terms, and our practical tips before heading to the dealership
Know what matters to you before you start shopping
Before comparing cars, it helped us get specific about what we actually needed.
For both of us, safety and reliability ranked high. Cassidy wanted features like blind spot monitoring and lane keeping assist, while Emily wanted those features plus all-wheel drive for Michigan winters. Neither of us drives a ton or considers ourselves a “car person,” so spending significantly more for a particular brand or luxury feature wasn’t the priority.
We also had numbers in mind before walking into a dealership. Cassidy knew she wanted to keep her payment around $550 or less. Emily had about $12,000 saved and initially wanted to spend no more than roughly $25,000.
Having those boundaries made it easier to rule things out.
That doesn’t mean your budget or wish list can never change. But before shopping, it can help to separate your priorities into must-haves, nice-to-haves, and things you genuinely don’t care about.
You may discover that the car you thought you wanted doesn’t fit the budget. Or that paying a little more for a feature that makes you feel safer is worth it to you.
Do your research — but don't let research become the goal
Big purchases can make it feel like you need to investigate every possible option before you’re “allowed” to make a decision.
We both experienced some version of that.
Cassidy initially made a list of several cars she thought she should test drive before choosing the Kia Niro she already liked. Emily narrowed her search considerably based on the brands, safety ratings, size, and age of vehicle she wanted.
In the end, neither of us exhaustively compared every car on the market. We did enough research to understand pricing, reliability, safety features, and our alternatives — and then allowed personal preference to matter, too.
Emily chose certified pre-owned because she wanted a newer, reliable vehicle with a warranty without paying the price of a brand-new car. Cassidy went new in part because the promotional financing available on her Kia made the numbers more attractive.
Neither choice is automatically better. The important thing is to compare the actual vehicles and financing options available to you rather than assuming new or used will always be the cheaper choice.
Negotiate the total cost, not the monthly payment
This was probably our biggest lesson from the dealership.
Car salespeople may ask what monthly payment you want, but a comfortable payment doesn’t necessarily mean you’re getting a good deal. A dealership can lower your payment by extending the loan term, while you potentially pay more interest over time.
Instead, Cassidy focused her negotiation on the out-the-door price: the total amount she would pay after the negotiated vehicle price, taxes, and fees.
The Kia she wanted had an MSRP of $31,510 but was listed at the dealership for around $38,000 after a market adjustment and a $1,500 add-on.
After several rounds of negotiating, Cassidy got the purchase price down to $29,069. Her final out-the-door price was $32,350 after taxes and fees.
One of the most important parts of that process was paying attention to all the numbers.
At one point, Cassidy was shown two financing offers. One had a vehicle price about $1,000 lower, which made it look like the better deal. But its interest rate was around 5.75%, compared with approximately 2.65% on the other offer.
A lower purchase price doesn’t necessarily mean a lower total cost.
When comparing offers, look at the vehicle price, out-the-door price, APR, loan term, monthly payment, and total interest. And don’t assume every dealership add-on is something you need.
It also helps to be genuinely willing to walk away. Cassidy hadn’t gone to the dealership planning to buy that day, so if the numbers didn’t work, she was comfortable leaving.
Don't let the monthly payment make the decision for you
It’s easy to focus on whether a car payment fits into your monthly budget, but that number doesn’t tell you the whole story. Taxes and fees add to the upfront cost, while insurance, gas, maintenance, registration, and potentially things like winter tires add to what the car costs to own.
The loan itself matters, too. A longer term can make an expensive car look more affordable simply by spreading the payments over more years — while potentially increasing how much interest you pay overall.
Emily used the 20/4/10 rule as a gut check while shopping. This rule suggests you put 20% down, finance for no more than four years, and keep total transportation costs below 10% of your gross monthly income. It’s a rule of thumb, not a requirement, but it can be a useful starting point when you’re trying to figure out what “affordable” actually means for you.
Cassidy, for example, chose a five-year loan at 2.65% because she was comfortable with the payment and the amount of interest she’d pay over the life of the loan. A longer loan term isn’t necessarily a red flag, but be cautious if you find yourself stretching your loan term just to get the monthly payment down to a number you can afford.
Before you shop, play around with an auto loan calculator using a few different down payments, interest rates, and loan terms. You’ll have a much better sense of what the car will actually cost — and which numbers matter when you start comparing offers.
TL;DR
Know your budget and must-have features before you start seriously shopping.
Research enough to understand your options, but don't assume there is one perfect financial choice.
Negotiate and compare the total cost of the car, not just the monthly payment.
Shop financing ahead of time and pay attention to both the APR and loan term.
Budget for the whole cost of ownership, including insurance, taxes, fees, maintenance, and other ongoing expenses.
Resources
The Finance Girlies content is for educational purposes only and is not personalized financial, tax, or legal advice.
