Leasing Your First Car Doesn’t Have to Be Hard
When I first off-handedly mentioned it would be nice to have a car, little did I know that I was launching a family-wide initiative, involving three generations and countless hours of planning. But since I did sign some car lease papers this weekend, my family and I must have done something right, so hopefully my journey holds lessons for other first-time car buyers.
I started longing for a car after 4 months of riding the T to work. My commute was at best an hour, at worst an hour and a half – a car would make it about 30 minutes. The shorter commute would give me more time to go home, make pasta, and binge watch House of Cards, as any newly graduated 24-year-old who no longer has homework must do.
Because I wanted someone to validate my own desire for convenience, I turned to my parents. At first, they questioned my longing to have a car in a city with public transportation. But after a little convincing (aka groaning about my commute), they both seemed to come around to the conclusion that a car could be useful. But the question that was waiting to be asked quickly came to fruition.
“Can You Afford a Car?’’
I am very new at handling a budget and didn’t know what I could realistically afford. (My American Studies undergrad degree and Journalism graduate degree didn’t teach me much about personal finances.)
Here is where my rational-thinking boyfriend getting his PhD in economics and my grandfather with decades of experience as the resident family budget-maker came into play.
My boyfriend used math in his head to figure out very quickly that I could in fact afford to get a car, which was comforting but not very helpful if my goal was to learn how to budget for myself.
Fortunately, my grandpa showed me how to come to the same conclusion using an Excel spreadsheet.
Making a budget seems simple (and I could have done it completely on my own), but really there are a lot of expenses to factor in. We started with the amount of money I make per month and subtracted mandatory expenses: rent, utilities, cable, groceries, and student loan payments.
I also wanted to make sure I had enough left over to put money in savings, plus a little something for eating out, seeing movies, weekend trips, etc. What I didn’t want to have is a car I can drive, but no money to go anywhere. The spreadsheet declared this was all possible.
But, What Car Expenses Do I Need to Look At?
We decided that a three-year lease plan would be best for me, as that is the typical lease length. It is long enough that the cost per month is still fairly low, but not too long of a commitment.
Though getting a new car may seem crazy for a recent grad, we had all come to the conclusion that a new, cheap, safe car was better than risking the problems and maintenance fees that come with a used car. I also didn’t need to pay all of the money upfront. I could put $0 down at the dealership and still have a reasonable monthly payment on a Volkswagen Jetta (the same car I had driven during my high school years).
But I also needed to take into consideration car insurance, gas, unexpected maintenance, and the overly expensive parking spots in my neighborhood.
Plus, my parents were concerned about what the consequences were if I needed to end the lease. At this point, I was nervous and started feeling guilty. Maybe I didn’t really need a car.
Dad came to the rescue. “You are an adult now, Megan,’’ he so wisely said. “This is just a pretty normal part of life.’’
With my mini-crisis over, I was able to figure out that even breaking a lease is not the end of the world. Many car manufacturers have programs where they will buy the car back from you and you can use that money to pay off the rest of your lease. Or there are websites where you can hand over your lease to someone else.
So, I (along with almost every other person I know) had finally decided I could really do this.
To The Dealership!
Though it would have been cool to say I did this part all on my own, I didn’t. My boyfriend kindly skipped watching football to come along with me for some moral support (and as my potential negotiation helper).
We got an Uber to the Volkswagen dealership, since apparently you can’t go to buy a car without a car. We walked around, picked out the one I wanted – aka the cheapest one possible – and went inside.
I feared a salesman or woman would hound me to pay more money up front, try to convince me I needed a rearview camera, or otherwise assume I could be easily pushed over, but none of that happened.
We sat in a fairly comfortable chair while the salesman figured out my monthly lease payment, which ended up being well under what I had budgeted for. No negotiating was needed.
Given my recent graduation, my credit score was nearly non-existent, but Volkswagen has a recent college graduate program, which is meant to help people in exactly my position. All I had to do to qualify was provide a transcript and prove I had a job and an address. Boom. Approved.
I signed a few papers and all of a sudden, I had leased a car — mostly on my own.
Here are some things I learned:
– It’s okay to ask for help from family and friends even if you are trying to be independent.
– Make sure you are not going to be breaking even financially once you get a car. You want to still have money to live.
– Remember it is not just the cost of the car – it’s gas, a parking spot and insurance too.
– Don’t just settle for anything when you go to buy or lease it. If you feel that the price is unfair, go somewhere else or figure out a different car. Be patient.
– Keeping up your budget even after you get the car is still really important to make sure you can continue to afford your new purchase.
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