HOW TO BUY A NEW(ER) CAR

I drive approximately 45 miles each direction to work. In the vehicle I most recently traded in, that came out to about $40 fill-ups, twice a week. $40 x 2 per week x 4 per month = $320 each month. That was way too much money. I decided it was time to trade in my SUV for a compact car.

My SUV was averaging 19.7 miles per gallon, which I thought was great compared to the 13.0 miles per gallon I was getting with the truck I owned before the SUV. However, I felt I could have done better, and I still could. I decided to start researching fuel efficiency in cars, especially used cars valued between $10,000 through $15,000.

Some of the cars I looked into were Honda Civic (gasoline and hybrid models), Hyundai Elantra, Kia Optima, Ford Focus and Fiesta, Chevrolet Sonic and Spark, and yes, even the Toyota Prius. Each got over 30 miles per gallon on the highway, which I decided was my minimum cut-off for MPG. Next, I had to determine how I could evaluate whether each car model was priced at the best value.

The hybrid cars I had looked at in the $10,000-15,000 price range were all over 5 years old. I have heard many times that hybrid cars need their batteries replaced around 10 years, and that can cost over $2000. I decided it would not be worth the added expense to buy a hybrid car this time.

The gasoline cars I had left on my list were all generally comparable. I'm not loyal to one brand or the other, so that allowed me to have a broad list of vehicles to shop for. Now that I had eliminated all hybrids vehicles and all vehicles that were not in my price range, I felt I had to narrow the margins some more. I decided I would keep this car I am shopping for as long as possible, so it would make sense to buy a car with the lowest miles possible. Also, since I plan on owning the car for a while, I wanted the newest car I could afford. The last item that was important to me was that the radio had an auxiliary input so I could listen to Pandora, Librovox, Stitcher, and any other audio streaming app my Android phone is capable of playing. Otherwise, I felt luxury features such as a moonroof, remote starter, fog lights, and anything else not standard on the "economy" model (other than A/C, remote windows and doors, and my AUX input) was an unnecessary expense in which I could not afford.

Now my sample list was as narrow as I needed it to be. Next, I needed a way to show me exactly how much value a vehicle has based on the dealership cost. For this, I went to Microsoft Excel. I set up my columns with these headers: Year, Make, Model, Mileage, Cost, Value. For the Value column, I created a formula that would deduct the current mileage of the vehicle from 100,000 miles, then divide that sum by the dealership cost. That gave me the cost per mile (until the car reached 100,000 miles). There may be better methods at finding the value of a vehicle, but this one made sense to me.

Next, I went to Cars.com and searched for the 4 car models I had left on my list (Chevrolet Sonic, Ford Fiesta, Hyundai Elantra, and Kia Optima) and added ten to fifteen of each model from local dealerships to my new spreadsheet. Once I had them all added to my spreadsheet, I was left with a range of $0.14 - $0.30 in my value section. These results let me immediately identify which cars were the best value. I filtered out all cars over $0.16 per mile. I was left with approximately 12 cars. With the remaining cars, I saw most were 2012-2013 model years, but others were older with a bit higher mileage. I then filtered out all cars older than 2012. That left me with 5 cars to choose from. I made a data sheet for each remaining car, which listed the vehicle info, dealer info, and Kelly Blue Book recommended price. I printed out a sheet per car, and began my shopping.

I ordered my list based on dealership price and the distance of the dealership from my house. I was able to buy the third car on my list. I called the first dealership and they had just sold the car I wanted to look at - which was a 2013 Kia Optima (fully loaded too!). This did not bother me because although the car was in my value range, the asking price was around $14,000. The second car I wanted to look at didn't work out - the dealership was closed for the day. No worries, because the third car on my list was essentially the same

as the second, only in a different color. Luckily, this dealership was open and the car was still available.

It was a 2012 Chevrolet Sonic with 24,000 miles. They were asking for $11,500, which was the exact Kelly Blue Book price. The dealership also gave me the Kelly Blue Book price for my trade-in, which I felt was fair. I purchased this car and have been very happy since.

It felt great to plan ahead for such an expensive purchase. In the past, I have made spur-of-the-moment car purchases only to regret it later on. I also timed my car buying to make my purchase in January. January is the best month to buy a car - sales are low and there are next model year vehicles on the lot, so dealerships want to get rid of the prior year's. I had to take out a small loan for the car, but the interest rate was about 2% lower than the average because of the dealer incentives.

I hope this helps you make any car purchases in the future, and let me know how you make out!