Buy a Car Like a Boss!

Buy a Car Like a Boss! - Pathfinder Front

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!

Buy a Car Like a Boss! - Nissan 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!

Buy a Car Like a Boss! - Pathfinder Rear Photo

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

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55 Comments on "Buy a Car Like a Boss!"

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Apathy Ends
Guest

Our last car purchase was brand new about 2 years ago, not sure I would make the same decision now (and thankfully I won’t have to for awhile) but I will still look at new cars – when dealerships get desperate, you can walk into pretty sweet deals (we got .9% financing through Honda)

Michael | The Student Loan Sherpa
Guest

I hate the idea of borrowing money for a depreciating asset, but it is really hard to argue when the interest rate is under 1%.

Vicki@Make Smarter Decisions
Guest
I think one of the most important things you did was some planning ahead. A vehicle can die at any point and it takes a lot of time to do the research you did to make a smart decision. We currently have 3 cars (looks like a used parking lot at times in our driveway!) – but with teenagers that happens! One is a 2004 Impala we bought new, another is a 2008 Dodge Caravan bought new and a 2005 Subaru Outback bought last year. We have been lucky with all of them – but I think now that we are FI and not commuting to “jobs” each day, used is the only way we would go. You make some good arguments though for your… Read more »
Mr. SSC
Guest
Good job on that deal! We did a similar thing when we went that route, but got a Mazda CX9 instead, MRs. SSC thought the pathfinders were too big then (2012). Same type of thing though, getting new for close to the same price as used and zero % financing, so we took the $$ we had set aside for it and just invested it. It was just last month Mrs. SSC paid off the last $3500 or so left on the loan. More recently I traded in my car for an actual commuter car and found a great deal from VW (almost $6k in incentives) where the new Jetta was almost the same price as a 15-25k mile 1-2 yr old Jetta. You can… Read more »
Amanda @centsiblyrich
Guest

Sounds like you did a great job researching and planning your vehicle purchase! We used to have a bad car buying habit, have been through several car transactions and have purchased both new and used. We’ve gotten good deals on both, but overall have gotten the best deals on the newer used cars, those that are around 2 years old with lower mileage. That said, we bought our last family car brand new, for $1500 after trade in – not bad! Thanks for sharing your experience!

Ty @ Get Rich Quickish
Guest

Sounds like you did the research, figured out what a great deal looked like and make the decision that was right for you – perfect!

I also bought a new 2016 about 2 weeks ago for many of the same reasons you just mentioned.

Enjoy your new ride!

Mr. PIE
Guest

Our recent experiences in buying cars has been much more favorable compared to 10 years ago. Being able to search the car, the price you want to pay and essentially do much of the negotiation on line beats the horrendous sale tactics of old.

We also got a remarkable deal when we traded in Mrs PIE old Subaru. We swear the bottom was about to fall out of the thing – making a horrendous rattling sound. It must have disappeared when they did a test drive as we got nearly $1500 more for the car than we ever imagined. A rare win in car dealing for sure and not one we expect to get next time!!

Visionary Money
Guest
Just yesterday I was driving a couple of my employees to an off-site location at work and they noticed my car was at 213,000 miles (something I’m rather proud about) and said, “why are you driving this piece of s… I thought you were rich.” To which I replied, “how do you think I became rich?” I’ve never had a car payment in my life. I’ve had one repair for $650 in 12 years. I watched my parents buy pieces of junk to save money and spent thousands in repairs and we broke down all over the place. It is worth a little extra money to have something dependable, that will last and gets great gas mileage. We spend too much time and money on… Read more »
Arrgo
Guest
Arrgo
I bought my first new car about 2 years ago at age 44. Previously Id always found deals on cheap used cars and drove up the miles and in a few cases replaced the motors and gotten another 100k+ miles out of them. My last car was a 1996 that I drove for over 13 years. I had the money so I thought I would take a look at something new and possible treat myself to less hassle of repairs for a few years. I ended up going with a silver Mitsubishi Outlander sport which was less than many others in its category, had a good warranty and looks sporty. Im pretty good at putting in the effort to find a good deal. I bought… Read more »
Jon
Guest

I agree with your approach. Shop around for a great deal on a new car and you get the best of both worlds. A car that has never been in a wreck or in a flood along with a rock solid warranty. You also get a good solid deal if you can be patient. This is the approach that we have always taken and been very happy. Once you’ve got the car, ride it out as long as possible – enjoy!

Ray Ray
Guest

Wow! Well done J.W!

I think the key is to plan ahead and do your research before buying a car.

It sounds like you got a great deal. I bet Mrs Swan was happy too 😉

PatientWealthBuilder
Guest

I still drive my 2007 Altima!!! Its very funny that we had the same car or is it just a sign that Nissan makes great cars? I see Altimas all the time actually. I think they are a very good car and would buy another one but I don’t need to. It has over 200K miles on it. I get the same kind of comments from my co-workers that your other commenter gets. Many of the people who work on my team drive nicer cars than me. I’m ok with that though because I’m comfortable with my lifestyle and excited about building wealth slowly over time. I’m hoping that my kids will thank me one day.

Rudy SMT
Guest
I brought a brand new car last year. I got the usual 3 years service, loan at 2.5% and first-year insurance. It’s my first brand new car after have own three used vehicles. The reason I bought it is because my wife only wanted a new car, no way to reason or change her mind. Personally, this has been my worst deal ever, buying a brand new car is just awful from a financial point of view. The reasons are: ~ The car the first year lose the most of the value in any years (approximately 20%). From the second year the lost drop to around 10% and decrease over the years. So, if you buy a six-month-old car with 5,000 Km, expect a significant… Read more »
Joe
Guest

So you paid around $28k? I like new cars too. We got a new Mazda 5 in 2010 for about $18k. It has 3 rows and 6 seats. That works for us. Buying at the year end or model change is a great way to save.
I haven’t looked at a new car lately, but the price seems much higher now. Not sure if we will buy new next time. Hopefully, the car will be trouble free for another 6 years.
Nice looking car, btw.

Future Proof, MD
Guest
Hi JW, found your site from Physician on Fire. Great post. I bought my first new car in 2009. I utilized Truecar, Costco and Sam’s Club’s auto purchase programs for price comparison. Once I decided on the car model and trim level (Honda Fit Sport 2009), I contacted all of the Honda dealerships and asked for the lowest price they can offer. I let them know I will be buying a car within the next 48hrs and all it mattered to me was the lowest price. I went through 2 rounds of bidding and was able to get a price that was within the “Exceptional Price” range on Truecar’s price graph. The one thing I wish I had done differently though was to finance the… Read more »
The Russian Guy
Guest

I will never ever, ever-ever buy a new vehicle. I’ve done mistake two times (a car and a motorcycle) and will not do the same. Losing 30% of a car value doesn’t meet my strategy of becoming a millionaire.

We bought our car 2.5 years ago for $30K (nothing down, 2% APR), we paid it off year after, today I checked KBB and my car worth only $19K – that was really stupid from my side. Lesson learned

Stefan @Mllnnlbudget
Guest

One of the few pf bloggers I see that bought a new car. You have definitely put a lot of time into the research and in my opinion got a steal of a deal. I know many people say used cars are a waste of money as they depreciate blah blah blah.

But, I know many people who bought used cars that were only 3-4 years used and had to dump a lot of money into fixing them. If you can find a deal like you did I would go new over used. Also, from a safety perspective new cars are technically safer which is higher on my list than price.

Dividendsdownunder
Guest

We bought a 2007 Mazda 3 a couple of years ago for around $11K all cash up front. No problems at all, we take good care of it 🙂

Nice to see you were very meticulous in your approach.

Tristan

Josh
Guest

I like to buy used and bought my dream car (Mustang GT) in 2012. The previous owner had it for 6 months before trading it in. So I got it for $8k under sticker price. I think the dealer was just looking to flip it because I could have bought it & sold it the next day and would have broken (or come really close) even after including the title fees & taxes.

Plus I still was able to get new car financing as well because it was still new enough.

So I agree that buying new isn’t always a cardinal sin.

Holly Johnson
Guest

We drive ugly, old cars and that works for us. I am very against having a car payment at this point in my life!

Alyssa Fischer
Guest

I honestly think you bought new for all of the right reasons. If there is ever a blog post that could change my mind, it’s this one. Next time I’m in the market for a vehicle I’m going to have to bring you with me haha.

Julie @ Millennial Boss
Guest

I actually just sold my 2015 Subaru Forester that I purchased new in late 2014. I got a similar interest rate but I couldn’t justify being a two-SUV couple now that we moved to California. We moved within walking distance to work for me, will rarely see snow, and don’t have kids yet. I also calculated that my $387 monthly payment ballooned to $750 when you calculated maintenance, insurance, gas, etc. I cut my losses and sold it with significant depreciation.

Finance Solver
Guest

I recently went through a car buying process, it was tough! I’ve never known about TrueCar, however, and will be using it the next time that I purchase! I bought a 2015 Nissan Versa Note Hatchback with the lowest price for the mileage in the city. The researching process was fun especially because it was my first time!

I would like to know your points of negotiation leverage that you used to get the free servicing / price discount 🙂 I’ve been getting interested in negotiations a lot lately!

MS
Guest
MS

Back in January of 2011 – I woke up and saw an advertisement for a brand new 2010 Saab 93 for $12K off the sticker price – well the rest is history – I still have the car today…(even though Saab went out of business it’s a solid ride). Thanks for the great post.

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Jacq
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Jacq
*Internet high five* to Lucy for the Pontiac. I had 2 grand prix. The first my dad got at an Enterprise rental car sale for me to learn to drive in. Years later my sister was driving the family mini van, and I borrowed it for a weekend. She decided to go to the mall in an ice storm in my car. Those signs that tell you the road curves? She wiped out into them, she was fine the axel was not(totaled). She did not get to the mall. I got my 2nd grand prix 2 years off lease. The dealer had done a huge promotion to get people into newer cars. I got it for less than blue book, and financed through my dad’s… Read more »
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[…] do currently have a car loan. There is a $24,000 balance right now and the value of the car, per Kelly Blue Book estimates, is […]

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