5 Tips How to Buy a Car + We Paid Cash for a New-to-Us Car

How to Buy a Car

Before we were expecting our third child, my husband and I had talked a lot about purchasing a new vehicle. We knew that fitting three kids in car seats in the back of our small car was going to be tight. But we also discussed that having a car payment and adding another $200-$300 to our monthly bills would be financially stressful, and we didn’t want to pay the interest that comes with a car payment.

We’ve been saving money the past few years because we knew we would eventually purchase another vehicle. In addition, for the past year, my husband has been researching vehicles online and staying up-to-date on prices so we would know when a vehicle was a good deal for what we were looking for. Besides wanting a larger vehicle for a good deal, we didn’t want the vehicle to have more than 60,000 miles on it because we didn’t want to worry about it breaking down on us any time soon. Our plan is to keep this next vehicle for 15-20 years or more.

We finally found a vehicle at the right price and at the right time with the money we had saved.

I was thinking we would need to wait until our tax return came back in order to have enough money, but a few months ago, my husband was looking at vehicles from Royal Auto in Salt Lake City. He had purchased a vehicle from them before we were married and knew that they were good to work with, honest and fair. They happen to have a 2011 Honda Pilot with about 50,000 miles for sale within our price range, which was one of the vehicles on our “want” list. At first, I was cautious because the car had been in a wreck and had been repaired. They did a great job fixing it up, and it really looked good. After asking a lot of questions and looking at photos, we learned that the frame of the vehicle hadn’t been damaged, which I had been most concerned about. And after more discussion and prayer, my husband and I felt good about purchasing this new-to-us vehicle.

Normally a used Honda Pilot with about 50,000 miles is more than $20,000, but we were able to pay cash and purchase our new-to-us Honda Pilot for $13,900. After taxes and registration, the total was $15,300. This was within the price range we knew we could afford. We also sold our old car ourselves for $3,800, which helped out with the cost of purchasing our new car. We received more money by selling our old car ourselves rather than trading it in.

We could have purchased a vehicle for less than $10,000, but like I mentioned, we wanted something that we knew would be reliable for years to come. We spent years building our savings so we could purchase a car with cash and so that we wouldn’t have a car payment. This wasn’t an easy thing to do to save this money. And trying to get all three children buckled in car seats for the past seven months in a small car has been challenging. It would have been easy to just go purchase a new car with a monthly payment plan, but financially it would have been more stress on us because we would have needed to come up with $200+ dollars each month just to pay for the car.

Buying a car is expensive, and usually the second most expensive purchase after a home that consumers make. Here are five tips on how to buy a car, as well as what we did to be able to pay cash for our new-to-us car:

1. Set a Budget
The hardest part in purchasing a car isn’t researching, test driving or negotiating a deal with the seller. The hardest part is determining how much you really can afford and then buying within your means.

Before you start car shopping, you need to set a budget. Keep track of all of your monthly expenses and compare them to your monthly income. You can read more about How to Set a Budget here. After looking at your budget, then determine how much you can afford for a car. The key is to not spend too much and to know what you can actually afford. This part of the process isn’t fun. It’s definitely much more fun to go test drive cars. But this step is necessary to prevent you from spending beyond your means.

Like I mentioned, we had been saving for years. Depending on each month, we would take $50 or $100 or more each month and put it aside in our savings. Tax return time is when we were able to set aside larger portions of money in our savings. We had a goal of what we wanted to save prior to us going out to test drive cars, and when we were ready to purchase a new-to-us car, we knew what we could afford. You might also like to read these 6 Ways to Save Money & Increase Your Savings This Year.


2. Research Cars You Can Afford
If you start by deciding what car you want and then adjusting your budget to be able to get that car, you will end up with a car loan that will become a financial burden. Be sure to research cars you can afford and don’t stray from the list.

Start by making two lists: one of needs and one of wants. The needs list should include car features like how many passengers it needs to accommodate and gas mileage. The wants list would include features you would like to have but can live without, such as a GPS navigation system, rear-seat DVD player, or seat heaters.

Know the bottom-line price of the cars you are researching by finding out the listed average selling prices for the same models in similar condition and mileage in your area. Use these numbers as a guide when negotiating with a dealer or private party.

Like I mentioned, my husband helped out a lot by researching vehicles for us this past year. He watched for used cars at dealerships, as well as individuals who were selling their used cars. He would also research what the going price was for those vehicle models.

There were times when my husband would see a good deal and mention that we should hurry because it would probably sell fast, but sometimes the deals were more than what we could afford. We would then begin a discussion again that we could get that car, but then we would have a car payment. If we could just wait a little longer, we will be able to reach our goal and have enough money within the year to pay cash for a vehicle.

It’s exciting to think about the next new vehicle we could have right then, but it’s so much easier to start off and research cars that you can afford and that are within your budget.


3. Don’t Budge & Just Say No
The truth about buying a car is that dealers will sell you more car than you need and some lenders will let you borrow more than you can really afford.

You’ve already spent a lot of time and energy into budgeting for a car and doing research so you know what you can afford. If you are shopping at a dealership, don’t allow a salesperson to push you into buying a car that won’t fit in your budget or push you into purchasing extended warranties or insurance on a car. Insist the salesperson show you exactly the car you want.

While discussing prices with a salesperson, keep your monthly budget amount to yourself. You don’t need to reveal what you can afford to pay each month. The salesperson doesn’t need to know. Your goal is to find the right car and negotiate the purchase price. If you aren’t able to negotiate a price that fits your budget, you may need to go elsewhere or re-evaluate the cars you are looking at. Take your time and make sure you are happy with this big decision you are making.

If you are buying a used car from an individual, all you need do is check out the car and discuss the price you are willing to pay.


4. Sell Your Current Car Yourself
If you are determined, patient and willing to take initiative, you can get a better offer by selling your own car.

Start off by researching what your car is worth. Using a site like NadaGuides.com or KelleyBlueBook.com will give you a rough estimate. Also, compare your car to other vehicles of the same year and model with similar mileage by using sites such as AutoTrader.com or Craigslist.org. Since we live in Utah, we also looked at the Car Classifieds on KSL.

We researched how much our current car was worth and decided to sell the car ourselves rather than trading it in because we would get more money out of it. We then determined a sale price that would be reasonable for someone else to buy. Within one day, we had four people asking to look at our car, and by the next day our old car was sold!

That was a huge relief to sell it so quickly. I had been worried that it might take a while to sell our old car, so I was very thankful that it sold as quickly as it did. We then took that cash from the sale and placed it right into our savings account.


5. Be Patient
This is was probably the hardest part for us. Being patient before purchasing a car. Being patient to save enough money. Being patient in finding the right car at the right price. And being patient even though it was challenging to buckle our oldest daughter in the car. Seriously, I would reach down and try to push the buckle in for a minute sometimes before I actually got it in. It was that tight with three car seats in the back of our car.

Purchasing a newer and larger car was more of a want than a need because we could have kept our old car and made it work, even though buckling the kids was frustrating. We also couldn’t justify having a car payment and paying interest on it just because of our car seat challenge. So we had to be patient and make it work until we had enough saved to purchase a new-to-us car.

We planned ahead and were patient until we found the right car within our price range. I realize that this may not be an option for everyone, like if your car breaks down unexpectedly and you need to get a new car. But I’ve learned that if you can plan ahead and save the money needed to purchase something in full, it feels great because there’s not that stress or burden of debt.

I know there are others things you can do when purchasing a car, but these are just some things we did to help us save money. What car buying tips do you have on how to buy a car?


How to Buy a Car


5 tips how to buy a car and how we paid cash



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  1. Thank you for telling me that we need to set a budget first before shopping around for a new vehicle. We already have a car as our main family vehicle, but my parents want to buy another one that we can use for our other errands. It might be a good idea to consider buying some Japanese mini-trucks after seeing them online and see if my parens would like them.

    • I’m glad this was helpful! I think a lot of people go out and purchase vehicles without thinking first about what they can afford and what their budget will be. Good luck with your vehicle shopping!

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