Whenever I meet with a client for the first time to create their financial plan, the topic of buying a car always comes up. My clients usually want to know how much can they afford to spend on a car, and what is the best way to buy a car. They want to feel like they’re getting a great value for their money while purchasing something they really want.
Plus, since I work with physician families, many of them want to know if they can buy a new car, how much they should spend, and how they should go about getting the best deal with the limited amount of time that they have.
Many of my clients drove old or run down cars throughout their training and want to upgrade their vehicles now that they’re fully fledged physicians with real physician incomes.
So, because this is such a common question, I thought it would be best to break down my method for buying a car. After using this method to buy my own vehicle, I’m confident it’s the right way to buy a car to ensure you get the best value without sacrificing your precious time.
STEP 1: DETERMINE YOUR BUDGET
This step probably isn’t that surprising, but it’s important to know what you can afford to spend. I recommend my clients pay cash for their cars if at all possible unless for some particular reason there’s an extra incentive if you finance it at an extremely low rate.
STEP 2: KNOW YOUR PRIORITIES
Everyone has a different reason for buying a car. For example, when I bought my Tundra, I purchased it specifically because my wife was pregnant with our first child and I valued safety and size over MPG.
STEP 3: DECIDE ON USED OR NEW
I prefer to buy new cars. I know this is controversial advice in the personal finance space, but to me, it was an investment in my family’s safety and future, something I consider absolutely priceless.
STEP 4: DO YOUR RESEARCH
My clients are physicians and so they don’t want to spend an entire Saturday test driving cars, negotiating, and dealing with salesmen at the car dealership. That’s why I recommend a little something I call negotiating from the couch.
To learn my step by step method of negotiating from the couch, and how I used it to buy a brand new truck with less than one hour spent at the dealership, check out the full post on Physician Wealth Services.