Josh's Car Buying Process


Choose a car that holds its value and has low maintenance and insurance costs.

My family is in the market for a new SUV. Our 2008 R300 Mercedes Benz has done an admirable job for our family: It is AWD, has a third row, is super comfy and is an absolute beast on the highway. However, it has reached my standard goal for a car of 160k miles and 10 years old. Combined with the fact that expensive things are starting to need to be repaired… its time we move on.

Next to purchasing a home, buying a car is one of the biggest personal financial decisions you will make. Given that, I am incredibly calculated when it comes to car buying and want to share the process I go through:

Josh’s Financially Sound Car Buying Process

1. Trade In or Sell Your Existing Car

I will list it on Autotrader or Craigslist, and let it continue to live on with a new family. I can’t let myself be ripped off by a dealership. And it is too old to sell to Carmax.

2. Set A Budget

You need to have a firm budget with a clear understanding of how much you can comfortably afford. A car is not worth the financial strain of sleepless nights over high payments. Decide how much you can spend on a car and how you’re going to pay for it. We determined our budget for this car purchase is $40,000.

3. Define Your Car Requirements

Here are our requirements:

  • AWD for family safety

  • Either Japanese or American badge, for value, ease of repair, supply

  • Not a European badge, because TCO is generally higher, with a higher starting cost. ( We already have one European car in the family.)

  • A car that is 1-3 years old, so that I do not pay the new car premium

  • A car that has 20-30k miles, enough miles to have not been ridden too hard, but new car kinks have been worked out

  • A model not in its first year of design and function has been iterated and cost efficiencies have been achieved

  • A 3rd row for carpools. Our sanity hinges on carpools.

  • Looks good and has a positive image. While we are not totally trying to keep up with the Jones’, we do like nice things.

4. Car Prospects

Once we decided our requirements, I put together my initial list of cars: Ford Explorer, Lincoln Navigator, GMC Yukon/Chevy Tahoe, Toyota Land Cruiser/Lexus, Toyota Highlander, Honda Pilot, Acura MDX, Nissan Armada, Infinti QX60 and Subaru Ascent. Then, as Jenn and I drove around, I would point out cars, and gauge her reaction:

  • The full size SUVs were too big for Jenn. That killed the Navigator, Yukon/Tahoe, and Armada.

  • The Explorer got nixed for emotional reasons, that are too deep seated for me to understand (husbands, I advise sometimes, just don’t ask questions).

  • The Land Cruiser is a family favorite, but too expensive.

This left us with a more manageable set of prospects: Highlander, Pilot, MDX and Ascent. Each of these, has a different set of positives:


In a dealership, be ready for the finance manager to pitch you additional products and services.

  • Highlander: looks good, comfy, AWD, hybrid for good mileage, indie shop in the hood.

  • Pilot: good size, good quality … it’s a Honda!!

  • MDX: looks great, good quality, potentially expensive … it’s a high end Honda!!

  • Ascent: we have had Subaru’s in the past and love them for ruggedness, quality, value and local shop access — but it is in it’s first year.

5. Buy Or Lease

For our family, given that we buy and hold, we don’t have to debate the lease/buy equation. Leasing just doesn’t make sense.

6. Research

So with all of these variables, in play, here is the remaining process:

  1. We need to test drive the cars.

  2. Josh to explore used car prices via autotrader/ebay SOLD prices

  3. Talk to local indie shops to determine any “gotchas”

  4. Check short term loan options, because we will likely need to borrow $10-15k

We normally take our time on the car buying process, so this will likely play out over the course of the next few months. But taking into account all of the variables allows us to hone in on the best option for our family. And it keeps us from making an emotional purchase at the local dealership when they start throwing incentives at us.

7. Close The Deal

Get a pre-purchase-inspection (ppi) at your local/friendly indie car shop, on any car sold by an individual. If they have the service records, comb through them. If they don’t have the records, that is a red flag!! Check the carfax to make sure it hasnt been wrecked or in a flood. Before taking ownership of the car, you should add it to your insurance policy. Then, you only need to pay for the car, if buying a used car, usually with cash or a cashier’s check. Make sure you get a title and have the seller sign it correctly. When in doubt, check the state’s registry website for more information. Most states allow about 10 days to register the car in your name.

Do you need help determining your car budget, the right type of car for your family, options for buying or selling a car, lease or buy equations, total cost of ownership? Let’s sit down and chat about it.