I have a question about buying a vehicle...

[SheilaT]

55. Here's another way to think about the actual cost

of the car you're thinking of buying, and it works best when looking at a used car, in my humble opinion.

Look at the actual cost of the purchase. If you're financing, look at the total cost including interest. Then estimate how many miles you're likely to drive that car, and divide the price by the miles. This gives you a per-mile cost of the car up front. It does ignore the cost of gas and maintenance, but it's a good place to start.

My brother-in-law Kerry suggested this the first time I was getting a car for my younger son. We were looking at an older Honda that already had nearly 125,000 miles on it, and Kerry expressed concern about the mileage. He thought that it would be good for no more than another 25 or so thousand miles. I double-checked many miles that car should be expected to go, and the consensus figure was 200,000 miles. So it would be good for at least another 75,000 miles. I believe we paid about $4,000 for it. Just over five cents a mile. The number you'd like to arrive at may vary, but Kerry felt ten cents a mile was a good target. We bought it. Paid cash.

The very best deal I ever got was the first car I helped older son buy. It happened to be the very first one we looked at. We test drove it (actually, I did all the test driving as son, while 21, only had a permit at this point) and liked it. Liked it better than any other car we looked at in the days and weeks to follow. When they told me what they were asking, around $7,000 as I recall, I just nodded sagely, thanked the salesman for his time, and left. They kept on calling me up and offering a lower price. I kept on thanking them politely. Finally, at $4950, they said, This is absolutely the lowest we can go. This was still the best (for son's needs) car we'd looked at so we bought it.

There's more than one way to negotiate.