The Ultimate Car Buying Guide

May 28, 2021 | Financial Education | 2 comments

One of the most common conversations we have with our coaching clients is about cars, and it’s no wonder. Buying a car is a skill that everyone can benefit from, but most are not comfortable with.

But regardless if you are confident in your car buying skills and looking to hone them in so you can get better deals, or you’re a first-time car buyer feeling anxious about such a big financial decision, or maybe you fall somewhere in between – this guide is going to help you!

“You will spend more money in your lifetime on cars than on your college education, or your first home…

According to the U.S. Bureau of Labor Statistics, in 2019 it costs an average of $9,576/year to own and operate a vehicle. This includes the cost of the car itself, plus gas, insurance, maintenance, license and registration fees…everything.

Take that into consideration with the fact that most Americans are spending over $500 per month on car payments, taking out 72-month loans and replacing their cars on average, every 6 years….oftentimes jumping right into the next car payment.

While there are a lot of variables, you can see why the estimated lifetime expense on vehicles for the average American comes out to well over $300,000!

That means you will spend more money in your lifetime on cars than on your college education, or your first home, and considering having a “dependable vehicle” is a necessity for almost every American, knowing how to be a smart car buyer is crucial.

In addition to the rising costs of owning a car, when it comes to car buying, a lot has changed in the past few years. As we researched the topic while buying our own car and for the writing of this guide, we realized that there is a lot of missing advice about new services and things to consider, especially when it comes to getting a good deal. But also a lot of advice that doesn’t apply and was since omitted here.

Through sifting through endless blogs and our own personal experience we’ve boiled it down to the “must-know advice” that is applicable to the current car-buying landscape and actually WORKS!

We’ve collected everything we learned through our experience and extensive research and we’ve added our unique advice and perspective as Finance Coaches that helped us get more car for our money!

Let’s do this!


In early 2020 our only car was hit by a truck while parked right outside of our home.

We didn’t know it at first, but it was totaled and we were about to be carless.

We got the official word a few days later, the body shop and insurance companies had determined the vehicle a total loss. This was a new term for us – apparently, it’s when it would be more expensive to fix the car than what it was actually worth.

So rather than put the money into repairing it and returning it to us, we would get a check for the cash value of the car and we’d be on our own to figure out a replacement. Of course, this was not our preference, we hated the idea that something that was repairable, wasn’t being repaired but likely junked instead. But apparently, it’s just the way these things go…

“We remained optimistic and focused on controlling what we could control…”

As you can imagine, this was a huge inconvenience. Especially considering we had recently quit our Full-Time jobs, started a new business, and were living off our savings.

With only 140,000 miles and running well, we were not planning on replacing this car any time soon. We were looking to get as much out of it as possible and planned to drive it until it just didn’t want to go anymore.

But life happens and although it was a major inconvenience, we remained optimistic and focused on controlling what we could control i.e. how we would go about replacing the vehicle.

Thankfully, we were centrally located in the city of Chattanooga at the time and had access to the local free shuttle, could ride our bikes to nearby grocery stores, or even borrow our friend’s car who was kind enough to offer their secondary vehicle if we needed to make a run outside of the central area. Together, this allowed us to take our time and be patient, while we found the right car for us.

Obviously, all of that was doable for a few reasons

#1 – awesome friends! (Thanks Cierra and Nick!) #2 We are an able-bodied couple who #3 Worked from home and #4 Had no kids to take all the places kids go.

But the point is when possible, try to explore all of your options. Find ways to help yourself not to feel rushed so you aren’t strictly reacting to your circumstances, making hasty decisions, and feeling buyer’s remorse.

“Society was telling her that “a grown woman shouldn’t have to borrow a car from her parents.” 

For another example – A client of ours was feeling very pressured to replace her car that suddenly died. At the time she didn’t have money saved for a down payment and knew that a big monthly payment wouldn’t be sustainable for her.  So we talked her through her options.

It turned out her parents had an extra car they barely drove. They had offered to let her borrow it while she saved money for her own car, but she was embarrassed. She was listening to society telling her that “a grown woman shouldn’t have to borrow a car from her parents.” But with some coaching she realized, it’s her life, and accepting the help was the smartest thing to do. It allowed her time to save the money she needed to buy the car that suited her needs and her lifestyle.

The stories of clients could go on forever – but when do you know that it’s time to replace your car?


The most important thing when you’re working toward financial freedom and independence is to master the ability to distinguish a need from a want.

In this scenario, the way to come out on top financially is by viewing your car through the utility lens.

What I mean by that is first and foremost, cars serve the purpose of getting us from A to B safely. Aside from that, it’s about convenience and creature comforts which are nice, but not the priority.

Oftentimes, especially if we’re not very knowledgeable about cars, we can catastrophize the situation. It’s important to seek the input of a professional or two to help you determine if it’s time to plan for a replacement car or just a few parts and additional maintenance.

If this is you and you’re questioning the safety and reliability of your car, research trusted auto mechanics and get a few opinions about how to keep your car safely on the road as well as quotes for the work.

Have a AAA membership? You can save on repairs! Learn more here. 


Buying a used car is key if you want a good deal and more bang for your buck.

Don’t believe us? Check out these quick facts:

In 2019, the average cost of a new car came in at $34,000 touting an average monthly payment of $523! Plus a new car loses about 10% of its value as soon as it rolls off of the lot. (Imagine just throwing $3,400 out the window. 😭)

Compare this to a Used car that averages $20,000 a $400 monthly payment and no immediate loss in value.

That’s a difference of $14,000 total or $123/month! Not to mention the cost of all the additional interest. Think of all the other things you could do with that kind of money!

That said, it’s obvious why a used car wins most personal finance gurus’ votes and is gaining in popularity – it’s more affordable and gives you more flexibility within your budget to put your money toward other things.

Be wary of Lemons 🍋

One of the most popular concerns we hear about buying used cars is the fear of buying a lemon.

This is totally valid and it is important to be wary of dishonest deals, but there are many services that can help you feel more comfortable buying a used car.

Take Lemon Laws for instance! These vary by state but usually protect a buyer from a seller that sold you a lemon.

Services like Lemon Squad allow you to schedule a pre-purchase used car inspection by a licensed mechanic. If buying a car private sale, having a mechanic look it over is an absolute must and Lemon Squad makes it easy to connect with a mechanic who will do exactly what you need.

Although we didn’t end up needing this service, we think that when taking into consideration the peace of mind and inconvenience it can save you, the quote was very reasonable and would have been well worth the money.

Do your Research

Ratings & Reviews for dealers have revolutionized the car buying world for consumers. The transparency and sharing of customer experiences make it easy for future customers to know whether a used car lot is worthy of your trust or to be avoided entirely. If a dealer has a habit of selling lemons – you will know!

Buying a car private sale?

Make sure you do your homework on how much the car is actually worth by using services like Kelly Blue Book or Edmunds. Cross-reference both to compare the price the seller is asking for, versus what the car is actually worth to ensure a fair deal. Doing this after you hear from Lemon Squad and do a thorough inspection of the car yourself will help you get the most accurate pricing information.

Pros and Cons of Online Car Buying

You can literally buy a car from a VENDING MACHINE!

Car retailers like Carvana and Carmax have changed the used car buying game and make it easy to get a great deal, without the worry. Just know that although buying from these big retailers will land you a better deal than buying new, you will also pay for the convenience and will not be able to negotiate for a lower price like you can at smaller dealers. (More on negotiating later)

Consider the cars Mileage

With proper maintenance and upkeep, a car lasts for approximately 200,000 miles and the average American puts about 12,000 – 15,000 miles on a car each year.

Some quick math based on how many miles are on the vehicle at the time of purchase, how well it was taken care of and how much you drive – can give you an idea of how much road time a car has left.

Personally, with this in mind, we decided that a car with 100,000 miles or less was worth considering. This was fewer miles than the car we were replacing, and it would likely last us for many years if it had been properly serviced, was well taken care of and the price was reasonable.

🚗 Fun fact: the average age of a car on the road is 11 years.

Check the CarFax 🦊

Take your time and review the CarFax. Look for routine maintenance, large repairs, reported accidents – especially if the damage was serious, recalls, and associated repairs. If you’re unsure of what you are looking for on the CarFax or have questions, have a friend or your Lemon Squad professional take a look over it with you!

Putting it all Together

Many people buy a new car every 3 to 5 years meaning it is easier than ever to buy a relatively new car with low mileage that will last you a long time – for a fraction of the price.

Remember, not only is having reliable, comfortable transportation a high priority, it is equally important to keep within your budget so you can continue making progress toward your other financial goals.


At this point in the process, you understand how purchasing a used vehicle is a great financial decision. Now it’s time to figure out what the best make and model is for you and your lifestyle.

But sometimes deciding the make and model of your next car can be the hardest part!

To help you avoid buyer’s remorse and ensure you are happy with your purchase for years to come, here is our advice for how to choose the car that is right for you!

Do Your Research to find the best Make/Model/Year for you

If you are like us, then you know buyer’s remorse is 100% real and the more expensive an item is, the higher the stakes.

We find comfort in making a purchase confidently, especially if we are talking years of staring at my decisions in the driveway. That is why we’re such big fans of doing our research.

Most of us know the name Consumer Reports but did you know it is an excellent source for researching your next vehicle? It is unbiased and will give you information from owner satisfaction to overall reliability right down to the year of each make and model.

We got this tip from our old mechanic and are very thankful he shared his knowledge! Although a membership is necessary, it is a small investment that can keep you from making an even bigger financial mistake.

Make a list of Needs vs. Wants

What features of a car are non-negotiable and what could you live without?

More often than not, features are more important than a specific make or model. For instance – we wanted our car to be AWD. I needed it to be automatic because I cannot be bothered to learn to drive stickshift.

These choices are personal. Only you know what is important for your lifestyle. Make a list of what you really need before going to the car lot to help you focus on the essentials and not get emotionally carried away with “extras” or even more useless “status”.

Be realistic and practical

Stay grounded in your decision to buy one car or another by thinking about the overall need and purpose of owning it.

 For instance, is it for everyday driving or for hauling large loads on a worksite? Or are you more of a weekend warrior who needs bars for a good roof box and a hitch for the bike rack?

While we thought we had made our decision on the right car for us, when we test drove a few we learned an important detail – the seats didn’t easily come out or fold down flat. For us, that was a deal-breaker so we went back to researching.

Know these details for yourself – it makes it easier to go through the next step.

Be OK with compromise

Don’t get hung up on color, model, or small details. Really think about the features that add value to your life and if they are worth the extra money, or if it is something you are willing to forgo for the sake of the other things that matter more to the big picture.

Rent the car you want to buy

This is the absolute best advice we found!

Rent a car of the make/model you are thinking of buying for a day or two before heading to a car lot for a test drive. This gives you time to make sure it is what you want without the pressure or hype of a salesperson. Take a day trip somewhere, drive around town, run a few errands, and get on a windy highway.

Renting does cost money but you get the opportunity to know if the vehicle really fits your lifestyle.

We rented a Rav4 and although we loved it at first, we realized after taking it out for a few days that we really didn’t want to own one.


So you’ve decided on the car that is right for you and you are so close to making the purchase, you can taste it!

But not too quick – your patience will soon pay off, but not before a couple more tips to getting the most bang for your buck.

Focus on the “Out the Door” Price 👀

While the monthly payment is important, equally important is that you focus on the “out the door” price.

Most people in sales will help you find the monthly price you’re comfortable paying. But low monthly payments does not mean it’s affordable. A lower monthly payment simply means the length of the loan was stretched out, which actually makes the total purchase of the car more expensive. Because. interest.

So you need to know your “all in” budget and if you’re not to the point of paying for your car’s in cash yet, at least have a plan to pay off the loan as quickly as possible.

Know what you can afford 💵

In addition to the “out the door price” that you negotiate with the seller, think about upkeep. All vehicles need general maintenance, but that maintenance is more expensive for some makes than others.

A great tool for understanding the associated cost of your vehicle is Edmonds. The online tool breaks down the total price of owning the car, from yearly upkeep to average gas consumption, meaning you can make an educated decision!

Setting your Budget

Setting your Out the Door Budget will depend on a few things –

  • How much you have for a down payment

  • If you have a trade-in (see trade-in advice below)

  • How quickly you can pay off the car loan and

  • What your other financial goals are

The most important thing is not to get a car that eats up your monthly cash flow making it difficult or even impossible to consistently save money, invest or reach your financial goals.

Ask for more 🤑

In most cases, buying a car involves a negotiation.

Although negotiating a price these days isn’t what it used to be, online price shopping tools like CarGurus help you see just how good or bad a deal you’re getting. You can use this information to negotiate the price and should always try to score some extras.

Simply remember that “You won’t know unless you ask”.

Try to get the price lowered, even if just a couple hundred dollars.

Ask for free maintenance like an oil change here and there

See whatever freebies they can throw in to sweeten the deal. What’s the worst thing that will happen?

Get comfortable with the word “No” 🙅‍♀️

Similar to the advice above (“You won’t know if you don’t ask”) you need to get OK  with both hearing and saying “no”.

When walking onto a car lot, you should be fully prepared to leave the way you came.  (i.e. without a new ride.)

  • Don’t like the way they do business?

  • Not willing to lower the price to fit your budget?

That’s OK.

Respectfully see yourself out the door and continue your search.

The BALLER move  💰💰

If all else fails and you still cannot find the car you want, for the price you can afford – ensure that what you are looking for is realistic.

If your ask isn’t unreasonable, send an email to your local car dealership letting them know what you are looking to purchase.

Include the make, model, and year, your target price, and any features you need. In your message, request that they help you find what you are looking to buy and to give you a call if they find something that fits the bill.

Feel free to copy and paste this template and fill in your personal details:

Hello [sales person or managers name],

I appreciated the time you spent with us to discuss your inventory the other day. We truly enjoyed chatting with you and learning about the features and differences between models. Having learned much, I am now in search of a vehicle that suits my particular needs and is within my ideal price range. I am quite patient and willing to wait for the right car. 

Ideal vehicle: [year/make/model]

Mileage: < 

Exterior: [desired features/color]

Interior: [desired features/color]

Other details: [AWD, cup holders, backup camera]

Price: [an “out the door” price range that suits your budget]

Please let us know if this is something you can help us with. We look forward to hearing from you. My number is xxx-xxx-xxxx.

Best regards,

 [your name]

Remember, “the squeaky wheel gets the grease” so check back regularly so they keep you in mind. Be patient. Even if you need to borrow or rent a car for a little while longer – this could save you thousands!

This is the exact method we used to purchase our newest vehicle. We let the dealers do all the work for us. About 1 month later we drove off the lot with a vehicle with less miles and lower price than we would have otherwise.


Now that you’ve successfully purchased your new (to you) car, what can you do with your previous ride?

Regardless of your approach, you’ll want to research the value of your car using KellyBlueBook and or Edmunds. This will help you ensure you’re asking a fair price if selling privately or getting a fair offer if trading in.

Private Sale

Selling your old car in a private sale is oftentimes the most financially lucrative option for what to do with your older car. But assuming you drove it into the ground, it might not be by much.

Here are some other things to consider if you are thinking of selling your car through a private sale

HOW? You’ll need to make sure you know how to do this the right way. Unfortunately, it’s not as simple as handing over the keys, but it’s not rocket science either. You’ll need a copy of your car’s title, or pink slip, and to talk to a state’s Department of Motor Vehicles to find out what else is required.

COMFORT LEVEL: Putting a sign in the windshield or a post on Craigslist and Facebook Marketplace isn’t for everyone. Know thyself.

TIMELINE: Finding a buyer and closing the sale takes time and effort. That’s not to say it isn’t worth it, but it is something that needs to be considered.


Again, knowing the value of your trade-in is helpful, but you will receive less than a private sale because the dealer needs to be able to make a profit when they sell the vehicle..

Choosing to trade your car in is hands down the easiest thing to do, plus it can help you put more down for your replacement vehicle.

Sell to mechanic or trade school

Got a real clunker that isn’t worth much and that you couldn’t sell even if you were the best salesperson in the world?

Talk to your local mechanics. Often they can afford to repair whatever is wrong with your car for a fraction of the price because they can do the work themselves and on their own time. Dylan sold a truck this way.

Can’t find a mechanic as a taker? Try a trade school! They are often looking for cars to be used to teach classes and have students practice their new skills.


When you donate your used car to charity, the car is often sold and the money raised is used to fund their mission.

It is worth noting that donating your car won’t have a monetary impact on you personally unless you itemize your taxes and deductions add up to more than your standard deduction. You will also need to have donated to a qualifying charity that will inform you of the sale price of the car etc.

If this option is of interest to you, do your research and talk to your tax professional about if this is a good option for you!

So there it is. All of our advice on buying a car that will land you in a car you LOVE and one that fits your needs and budget!

By taking these steps ourselves, we were able to land a car which was exactly what we wanted but was hard to find. We ended up buying a highly reviewed make/model/year, with high end features, low miles and in excellent condition!

Hopefully you have learned something new and feel empowered and more knowledgeable as a car buyer.

Enjoy this car buying guide? Share this with your friends – because as you know, even if they aren’t shopping for a car right now, we’re all going to spend a LOT of money on cars in our lifetime!


  1. Bryan

    This is great information‼️ What did you buy?

    • Dylan Pollock

      Glad you enjoyed it!

      We bought a 2014 Subaru Outback in excellent condition 🚙


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