Buying Your First Used Car? Tips to Save Money and Get the Most Value

Used car shopping: Easy ways to save money

Getting a car can be exciting, especially if you’re a teenager. It’s also a big commitment and something you should give a lot of thought to before you make your final decision. Words like ‘commitment’ and ‘thought’ often fall on deaf ears when it comes to teenagers, but sometimes a bit of pre-planning can save you a lot of money.

When I was 15 I bought a copy of the Ontario Driver’s Handbook because I was so excited to get behind the wheel of a car and start driving. My birthday is late in the year, so most of my friends got their beginner’s licence a few months before I did. I’d read the book every day, memorizing the rules of the road and envisioning myself driving a car for the very first time. It was of little surprise to anyone that I scored 100% on my G1 licence test, which I made my dad drive me to on my 16th birthday.

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If I could go back in time, I would definitely have done things a bit differently when buying my first car. I’m going to share my experiences so that you might not make the same mistakes yourself.

Here’s a short list of what I learned about buying a car. This advice is good for anyone looking to buy a used car, but especially for someone buying their first vehicle.

Shop Around

Shop around and understand the value of cars in your price range. You won’t know what really is a good deal, until you have a lot of comparison knowledge. I would look at dealerships and on websites that list private sales to see what the market has to offer. You might have some wiggle room if you’re a good negotiator, but in most cases, you can expect to pay what you see. It can also be important to get a vehicle history report to see if the vehicle has had any major accidents or repair work done in the past. The car may look fine now, but those little surprises can lead to major extra costs in the future. It’s usually best to shy away from cars that have had major repair work done.

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Certified and E-Tested

Making sure a car is certified and e-tested can be very important. A car can appear to be a really good price, but it could cost a lot of money to bring a car up to standards so that it’s legal to drive. Sometimes you can find a great deal and if you’re able to get the work done cheaply, you can save a lot of money by certifying a car yourself.

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Having a mechanic look over the car that you’re thinking of buying is a good idea no matter what you’re shopping for. Ask them to give you an estimate of the work that needs to be done and how much it’s likely to cost. Also keep in mind that this is only an estimate. Even my dad who is a mechanic would always find a surprise or two when he actually got down to work. Sometimes buying a car that’s already certified and e-tested is just easier, but that’s not always the case.

Insurance

Get insurance quotes before you buy your car. I got my first car when I was 18. It was a 1998 Chrysler Cirrus. Nothing really fancy about it. I thought a family sedan would save me money on insurance. It may have, but as an 18 year old male driver (with a clean record), I paid $460 per month in insurance. For reference, my car loan payment was only about $250 per month.Take into consideration how much it will cost you to drive your vehicle and factor in all expenses. Make sure that you can afford all aspects of your car including gas, maintenance and insurance. A good deal can turn into something much more expensive if you’re not prepared for it.

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Talk to your insurance broker about limited coverage if it’s a car that you could afford to replace if you get into a collision. If not, make sure that you’re covered for a rental vehicle and to replace your own vehicle if that should happen.

Fuel Efficiency

Fuel efficiency is also something you want to compare. One of my favourite vehicles I’ve owned in the past was a 2001 Jeep Grand Cherokee. I loved it. I felt like the king of the road when I drove my Jeep. It was comfortable, easy to handle and incredible to drive in the snow.



One thing I didn’t factor in (which my dad tried to warn me about) was fuel efficiency. The power and comfort came from a big V6 engine. For someone with a regular job, it wouldn’t have been bad. As a student who had to drive between two part time jobs, it cost me a lot of money to drive ‘the dream machine’ (as I called it) on mostly city roads.

What Can You Really Afford?

Make sure that the payments you are agreeing to are what you can actually afford. Don’t listen to your ego that wants the new car or to the salesperson who says you’re approved for a loan, do some financial testing before. Put aside as much money as you’d pay for the car, insurance, gas etc. and see if you are comfortable living without it (or if you even have it in the first place). A lot of times we are more optimistic than realistic, especially when we’re sitting in a new car.

Financing Terms

Pay attention to your loan terms. Namely the interest rate and how quickly you will pay it off if you make the payments they suggest. Maybe in a year or two, you’ll decide that you want to sell your vehicle. Remember that cars also depreciate. It’s not a fun surprise to find out the car you owe $9,000 on is only worth $6,000.See if you can adjust your payments so that your loan value matches with the approximate depreciation of the vehicle as you go along. If you’re going to drive the car for years and years until it dies, this is less of an issue. If you want to resell the vehicle, this is definitely something to think about.

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Alternatively, you might consider leasing a new vehicle instead. Rather than paying for a car you know you want to sell in a couple of years, talk to your dealership about leasing a vehicle and how a trade in every 2 or 3 years would work. You get the benefit of a new car without worrying about how much will be left on the loan when you want to sell.



As with any big decision, it’s important to understand what’s important to you. Define your criteria before you go car shopping and know which areas you are willing to give a bit in order to get what you want.

Maybe you commute a lot and want something that will make your commuting time more enjoyable. Maybe you see a car as something to get you from point A to point B and as long as it works, you don’t care what it looks like.

By now, I’m on my fifth vehicle since I bought my first one 10 years ago. I’ve learned so much about owning a vehicle and what’s important to me, but only through trial and error. As with any advice, be sure to consider your own situation and adapt to what’s important to you based on that.

What was your first car? Do you shop differently for a vehicle now than you did in the past? What’s changed and what’s important to you? Share your thoughts and ideas in the comments below.

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