19yr old and a service member, looking to buy a car. Being so young i dont have any clue how buying anything really works, are there any tips, advice, and lingo i should know before buying? I was looking at Lexus’ gs350 an older one and looking to buy from a dealership as i’ve heard i can get good deals being in the service, but i also know theyll try to squeeze every penny they can off me. What should i ask, be on the lookout for, and avoid when buying from a dealership?
Posted by The-king-burger
4 Comments
Focus on the terms of the loan, not the monthly minimum payments. The former can always be manipulated to fit the latter.
At 19 and the cost of car insurance for being under 25 – I suggest you look for a used Toyota that is 5+ years old or older. Pre 2022 models hold their value. Consider Tacoma, Forerunner, Rav4 or Camry.
Luxury cars (Lexus) even older ones come with luxury insurance costs.
Take a safety class to help reduce insurance costs (can be done online).
If you’re an E-1 or E-2 making ~$29-31k a year, a +10 year old Toyota would be your best bet. (I’d say get a motorcycle but it’s too tempting to over enjoy a crotch rocket at 19!) Focus on a low interest rate through Pentagon/your service arm credit union or other credit union + the total cost. Get preapproved but don’t tell a dealership that- they’re incentivized to sell you a loan in addition to the vehicle.
Car salesmen love taking advantage of young enlisted guys, so do your homework before approaching the owner/dealership. Don’t be fooled by a low payment. Use this tool: https://www.calculator.net/auto-loan-calculator.html
Spend as little as you can on wheels right now, be sure to pay off and remain debt free where possible, contribute as much as you can to your TSP, start a Roth IRA and you’ll be further ahead than most of your leadership!
Get the book: Car buyer And leasers Negotiating Bible. Best money you will ever spend. If you are looking at used cars, start online. Ask google what the most reliable model years are for the car you are considering and the most reliable cars similar to the model you are considering. Then visit cars.com and see what’s available in your area that falls into the model years reported as most reliable. Print out the pages for 5 or 6 cars you would be happy buying. Go to the first dealership one of these cars is at and ask to test drive the car. At 19 they may not be insured for you to drive one off the lot so ask the salesman to take you out in it. Be sure you hear it roll onto the freeway to make sure there are no rattles. The salesman will try to get you to say a monthly payment you can handle. Don’t give a number out. That’s where they get you. If they could, they would tie you up for a twenty year loan at that payment. When you get back it’s time to negotiate a price. They won’t tell you what they paid for the car so you have to haggle on a price. Keep in mind they make money financing a car as well as selling a car. Read the book on how all that works.
The important thing is to show the dealer your pages of print outs and tell them: I am gonna buy one of these cars this week. I dont care which one. Make me a good deal and you get a sale, otherwise I’m off to the next dealership. In general I don’t finance a card for longer than 4 years but you decide why you want. If they think you are gonna leave they get serious quickly.
Really. Get the book.