← Frugal Friends Podcast
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- [00:01]
Narrator
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- [00:57]
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- [01:25]
Jen
TikTok is normalizing being Car Poor.
- [01:33]
Jill
Welcome to the Frugal Friends podcast, where you'll learn to save money, embrace simplicity, and live a richer life. Here are your hosts, Jen and Jill.
- [01:49]
Jen
Welcome, Frugal Friends. My name is Jen. My name is Jill and we've all seen those social media videos where car dealership employees are saying they're crazy car payments and the crazy car payments they've seen go out the door. How much is your car payment and.
- [02:08]
Grace
What do you drive?
- [02:09]
Bill
My car payment's $1,500 and I drive.
- [02:12]
Grace
1,800 and I drive an 84X AEV 74X $1,582 from the Toyota prison.
- [02:22]
Jen
Car payment is 700 and I drive a cla.
- [02:25]
Grace
I drive a Mercedes Benz SL and I paid 1200amonth. Grace, what's the highest payment you've ever seen? 17842100 it was $1,958. 142435 arch 3200.
- [02:45]
Bill
Highest payment I've seen. Probably like 18, 1900, 2,500 and you can be next.
- [02:53]
Jen
It is kind of extreme and crazy, but it can make you think that that price is normal or that maybe just a little bit under it is normal. It's kind of like when you push the extreme the middle gets pushed as well. And that's the ultimate goal.
- [03:12]
Hayden
Yeah, I mean, and I've also seen so many commercials where they are saying like you get to decide how much you pay. It's like, no, you're gonna pay a lot. It's gonna be a lot of money. But yeah, like you, you get to choose. Am I going to pay 450 or 550, $650 or $750?
- [03:30]
Jen
The audacity for them to say you get to choose what you pay.
- [03:35]
Hayden
Well, and so often it's you, you're choosing your monthly payment. They are always pushing the monthly payment, not the actual price of the car. And that can get you really stuck into paying an astronomical amount of money for something that you didn't have to.
- [03:52]
Jen
Yeah. So how did it get this way? How did we get here? And is there a way to reverse it or at least not trap yourself in a mortgage sized car payment? And that's what we'll be talking about today. But first, this episode is brought to you by tiny trash cans. They are the Amazon must haves for your new car. They hold one tissue and have no trash bag. You know, they're the ones that they don't go in the cup holder. They go in the side of the car door. There's a lot of Amazon must haves for your new car. Everybody seems to have the same clear bag to go in the center console. I don't know how everybody coordinated and got the same bag from Amazon. It just seems so bizarre. And they got the same tiny trash cans that feel themselves as they that they will end up in larger trash cans that can actually hold multiple pieces of trash. But you know what is not trash? Our spending planner. Spreadsheet. Tell em we have a spreadsheet that is mobile optimized and it helps you plan your spending every month. If you're not an app girly and you're a spreadsheet girly, this is for you. It is mobile optimized. Meaning when you pull it up on your phone, it's you're going to be able to see the whole first column in the width of your phone. You're going to be able. And that for your monthly, for your monthly budget is where you put your transactions. Because that's what we're keeping track of in real time throughout the month. You don't have to go searching and scrolling for that area of your budget. It's just the first thing to pop up. But there's also an annual dashboard, a Bill calendar, savings goal tracker, debt snowball tracker. And our favorite, we talk about it every time. The opportunity cost calculator where you can plug in something that you might be impulse buying or thinking about impulse buying and see how much you could potentially make in the stock market if you didn't buy it. So it's@frugalfriendspodcast.com budget or the link is in the description below to get a code for 30% off.
- [06:09]
Hayden
Mm. Love it. Yeah, love that, Love that planner. But also love to talk about this topic because we think we talk about the big three a lot. That these are the things that take up the most of our spending. Food, housing and transportation. And transportation decisions are kind of that, that middle of the road where these are decisions that we are making potentially every two to seven years. Hopefully you're not making a transportation decision every two years, but you might be. And so this is, this episode is definitely you. And, and it is becoming so normalized to have such a high car payment. And that's what we really want to push against. But we do want to talk about what is typical. What are people paying for vehicles? And here you go.
- [06:55]
Jen
Yeah.
- [06:56]
Hayden
Average transaction price for a new car is over $48,000. The average used car price, however, is around $27,000. Obviously that's going to be a huge range. I mean, I'm sure we're talking used in the in of like two to five years there.
- [07:14]
Jen
I did look up median and they said. And by they, I mean Chad.
- [07:18]
Hayden
Chad, GPT Chad, we love Chad.
- [07:20]
Jen
Said that average and median were very close.
- [07:22]
Hayden
Yeah. So then that would put the average new car payment just under $750 a month.
- [07:31]
Jen
So these crazy prices that you're seeing, these car payments are actually not that crazy. Yeah, unfortunately.
- [07:40]
Hayden
Unfortunately. And an average used car payment is going to be about just over $500. And then that doesn't even include insurance. Remember that thing that we got to also be taxes? Yeah. Average annual insurance cost for a new car is $2,600. Average annual insurance cost for a used car is $1,800. And that always shocks me because I always think new car has all the safety features. Insurance isn't going to be as much for it. Never.
- [08:10]
Jen
True. Because they have more money to cover.
- [08:14]
Hayden
Yeah.
- [08:14]
Jen
The high. The more expensive the item, the more expensive the insurance. Because if they drop and they never want to cover anything, it's very much like a warranty. They're going to try their hardest to not cover you. But so, and, and then you have Some people will make the argument, like, you can get, you know, 3% interest on a new car, where a used car would be like 7 to 11% interest, which in my. On my used car, granted, I did buy it in 2023. 2022. One of those years.
- [08:51]
Hayden
There's 2022.
- [08:52]
Jen
Okay, 2022, I was able to get four and a half. So still, the average was still 7% for what you could get. Yeah, but. And we'll talk about tips for negotiating those things down later. But even still, if you're looking at a higher, like a lower rate for a new car, but the car is more expensive and a lower rate for a higher rate for a used car, but the car is less expensive, even if you fell somewhere in the middle with a new car, you've still got 40 to 50% depreciation over the first three years. And that depreciation comes into play on the next car you want to buy. And even so, if you plan to drive it forever, you still have that increased insurance cost while you owe on it. So we're going to try to come at this as unbiased as possible, but we obviously, like, do have a preference. But we also know that, no, we don't want to minimize that buying a car and the traditional car advice that mostly men have given over the years, it's just like, doesn't work anymore. No.
- [10:11]
Listener
In the, like, financially savvy world, people will tell you, do not get a new car. That is the worst financial mistake you can make. You do not want monthly payments. Just save the money and get a used car. After two years of having a used car, which I have to pay off monthly, I can tell you 100% that I no longer believe in that statement. I feel like people try to trick me for so long, long into believing that. And now that I have a newer car and I have the monthly payments, I'm like, I should have done this a long time ago at three cars before my Bronco. And they were all used. The first one was garbage. The second one was okay. And the third one, the third one left me on the side of the street once. And my husband was at work and these random men came to help me. And although they were being very nice and helpful, I was also a woman. So I was scared. And the cop came and he was like, you gotta move. And I'm like, I would if I could. And then I had to ride with the towing guy to the, to the shop, and the guy and saw this girl talking about car trauma ones and it resonated with me so much because that is exactly what I had from that experience. I had so much car trauma. It gave me so much other issues before and after that. But that one was like my. That was like the deal breaker for me. And yeah, I was too scared to even take it on the highway because I was scared it was just going to shut down on me in the middle of the highway. I was going to take a long distance. Like, I was honestly just scared of that car. And I hated it so much after that. I was like, you know what? Forget this. I am getting a new car. Because why am I struggling and why am I traumatized from these old beat up cars when I just get a new car?
- [11:25]
Jen
Have you had car trauma?
- [11:26]
Hayden
I have had car trauma for sure. There was the last vehicle that we had before this one. Yeah. This resonates so much. Our brake lines went out on three different occasions and that is not something you want to be messing with. Thankfully, Eric was driving and he is quick on his feet with stuff like that and was able to navigate us to safety. But by the third time it was just like, we don't have a choice. We have got to get a newer car. But I think that's the whiplash that can happen is then it can lead us to think, oh, I've got to spend so much money to get the thing or that a brand new car is going to solve it. Where there still could be a radical middle option here, where there is safety features. It's not a beater. But you're also not hemorrhaging cash.
- [12:19]
Jen
Yeah, we. I think this plays a big role in how we like especially women rationalize paying these higher prices for particularly new cars. And it was. But it was funny to see like in that compilation of all those highest payments, all the highest ones were men. Like it was the women who have the more reasonable ones. But I think. And a lot of them we didn't include. We included the craziest ones, but we didn't include a lot of men and women alike were like, we don't have a car payment or 300, 400, stuff like that. So there was a lot of that out there too. But I think that that is such an indicator of how we can end up with a $700 car payment and think that that is normal. That is what I paid for rent like on an entire apartment once. Yeah. So, yeah.
- [13:25]
Hayden
And I think sometimes these higher car payments can be more. This might be anecdotal. I haven't done my research on this I'm gonna get. Guess it would back me up though. I do imagine that typically if we're renting, we might be more susceptible to a higher car payment if we don't have the additional of home ownership. And so it might feel like, all right, I'm able to now spend so much more on this car. But I think that's where the thinking through, what are some of the opportunity costs with this? What else could I be doing? And do I have to fall victim to such high car payments? Do I have to buy something that looks so cool? Like, does it have to be a status symbol?
- [14:12]
Jen
I'll go one further. I feel like the hopelessness in buying a home and the unaffordability of it has also led to this increase. I can't afford a home, but I can afford this little piece of luxury. And I think we're just backpedaling, honestly. And so we wanted to figure out how do we get out of this mindset and still be safe, still not succumb to, to the car trauma that a lot of people are still perpetuating online, like buy used, buy a beater, pay cash, don't lease. Like all of this stuff that we're hearing from financial experts. How do we find relevant information that keeps us safe and still is good for our wallets, still leaves us with room to pursue our financial goals. So we talked to Hayden Schreier. He is a YouTuber and a car enthusiast who is passionate, passionate about exposing the hidden costs of everyday life and that includes buying new cars. And so we asked him find out what's worth paying for and what's not.
- [15:29]
Hayden
So here's our little interview with him.
- [15:31]
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- [16:05]
Jen
You know a ton about cars. You rebuild cars for fun and there's, there's a lot of reasons people have to justify buying a new car, so reliability, newest technology, financing reasons, etc. What are the justifiable reasons and why? What are the lies that we're rationalizing and believing?
- [16:27]
Grace
There's nothing wrong with getting a New car by any means, if you can afford it. And in my opinion, it's buying one outright with cash. I think having cash flow is king. And if you, you know, kind of lock up your monthly payments or your monthly income with payments and debt, it becomes very difficult to build a life of financial freedom, if that's a goal of yours. So if you can purchase, you know, outright with cash, then there's nothing wrong with getting a new one. They're, you know, low miles, they are reliable to an extent, depending on what you get. You're the original owner. So you know what has been done to it, which is huge compared to the used car market. You know, everything. The maintenance, what has been done before, everything. So I think that is a really good perk towards purchasing new. But there's a lot of kind of red flags out there now with the way new cars are going, which we're talking.
- [17:23]
Jen
Tell. Tell me the red flags. Tell me what is not what people believe that is not actually true.
- [17:32]
Grace
Well, you have the car itself, the manufacturers, and then you have the way it's sold, which some, you know, car dealerships is a big one. The kind of the, let's say, the shady practices of the way they're being sold with, you know, markups on them or hidden fees or things that you think you need, that you don't actually need. And then also on the manufacturer side, you have lots of. They're kind of making cars now really built for. For safety. And. And people are distracted now. Everybody's distracted. Everybody's on their cell phones, Everybody's getting into accidents. So manufacturers, like, let's just make a car do all that for you, and then you can kind of just continue to do what you're doing. And with those things, we have planned obsolescence, we have the right to repair being reduced. So no longer can you work on your car as much. Lots of new technology and cars are becoming disposable too. So you have lots of plastic and gadgets and gizmos and doodads and lights and quilted seats and massage. All these things that a car is just meant to get you from A to B. It's not supposed to be like an extension of your living room. And it becomes very expensive to maintain.
- [18:58]
Jen
And to cap with one of the.
- [19:00]
Hayden
Biggest barriers for me, and I don't know if you as an expert would agree with this or not, but for me, not getting a new car is that there. It hasn't had enough time on the road, on the market to even know what breaks down. What's actually not reliable? What are the features that aren't worth it that you can get with even a slightly older car? Like we're not talking, oh, getting a 20 year old beater, but like, maybe waiting a little longer is, is there anything to that?
- [19:32]
Grace
I totally agree. I think the way car manufacturers are going now, it's like a rush to get the newest innovative product out. That's big in tech. Everybody wants to get the newest thing out there, you know, because of how, what is it? Everybody is, is very quick to move. Instant gratification, everything. Everybody wants the newest thing. So car manufacturers are just dumping them into the market and figuring it out afterwards, which they didn't always used to do. But now, at least I think now we're starting to see more and more problems. And when you buy a car brand new, even the dealer doesn't know half the time how to fix it. I've had many friends that buy new cars and then they get recalls in the mail that says, hey, yeah, we have a serious problem. The brakes fail and we don't know how to fix it yet, but we'll let you know. It'll be covered, but we'll let you know. So you are a guinea pig. When you buy a brand new car, you don't know what to expect until several years down the line.
- [20:33]
Jen
I have heard you say in your videos, especially like when a car gets like a facelift or a model gets like a total redo or something, then yeah, you're like a guinea pig. How do we figure out if that is the case for the particular cars?
- [20:51]
Grace
So yeah, that's a great question. So lots of car manufacturers, they'll keep the same car for several years and let's use Toyota for example. They like simplicity and keeping things the same. They like building on what works and fixing what didn't work and kind of adding that to the next revision or like the next car. So you might see, I don't know, The Toyota Prius 2010, 11, 12, 13, 14, all the same thing. And then they might just, you know, change the headlight or the bumper and then, you know, 15, 16, 17, 18, again, it's the same car. And all they did was just change the problems from the previous year. Now when they start to fully, you know, change their car, when they start to, you know, come out with a Corolla cross or some car that they've never dealt with before, fully redone it, then they don't know. It's, it's, you know, a guessing game. It's it's brand new. Nobody knows how to work on it yet or fix it or what problems they'll have. It's a full reiteration of the car. So then you have to take your chances on it. So it's good to stick with those cars that have been out for longer. It's a safer bet.
- [22:03]
Hayden
So what would be your recommendation? If someone's looking to purchase a vehicle, how should they go about it?
- [22:09]
Grace
What's the best way you think new or used?
- [22:13]
Hayden
Well, what would you recommend?
- [22:14]
Jen
It's sounding like we're not recommending new. We have a preference, but we want to stay neutral.
- [22:21]
Grace
I think it's best to buy a car two to three years old, could be four. That's typically when you see the most depreciation on a car. And it's also been on the road long enough to kind of fix the kinks that might have been wrong with it previously. And the previous owner would probably be the one to fix those. So you don't have to be left now in a loaner car, leaving your car at the dealer, also making a payment, leaving the car at the dealer for what could be weeks, months, driving a loaner and paying for the car that you can't even drive anymore.
- [22:55]
Jen
Yeah. So how do we find out like if a car has been through one of these facelifts and maybe we're trying to buy it used, should we worry about that now that it's two or three years old?
- [23:15]
Grace
So I guess we have like full like brand new cars and then facelifted ones where they just change a few things to kind of say, hey, look what we did, like we're still relevant. I think that's okay. Where they don't go crazy. But when it's a full overhaul and they put a new engine and a new transmission and the whole inside's completely different, that's where you might run into trouble. But if you, you, you could do a lot of research too, like Toyota, Mazda, they're fairly reliable brands and a lot of cars you don't hear about Toyota Sienna, Toyota Camry, Toyota Prius, you don't really hear too many problems with those cars, even when they do kind of facelift them stuff underneath.
- [24:00]
Hayden
In looking at buying a 2 to 3 year old used car, what would you say are the most important things to be prioritizing with that car purchase?
- [24:10]
Grace
So when we get into two to three years old, we're still typically buying from a dealer. So for the most part that car is also still under a warranty. Which is super cool. So you don't have to worry about a lot of things. And I go back and forth into the problems with warranties and stuff, but generally speaking you are covered for a lot of the general stuff that could go wrong. But then we also have like there's nothing wrong with older cars too. If you have the money to budget 20k, 25k to buy a used 2 to 3 year old car, that's great. Low mileage, some people don't have that. And I also think there's nothing wrong with getting even older cars. 10 years old, 15 years old. As long as you do your research, you'd be okay.
- [24:56]
Jen
How do we do our research and what kind of maintenance should we be aware of when looking at that?
- [25:03]
Grace
So it's tough because I, I, I really like this stuff. So I go crazy and I know sometimes I go too far into things and some people might not be able to relate. So I'm really trying to bring it back to like the general maybe nine to five person that just doesn't have the time to be spending hours researching all this stuff. Because I get it then what I would do when buying, you know, an older car, if I don't have the money is, or I don't have the money for a new car I would buy, or I would get a pre purchase inspection, I would have whoever it is that I'm buying the car from, if it's on a marketplace or something like that, they should be okay. And if they're not okay with bringing the car to a mechanic, stay away from it. But you want to find somebody that has the research, the knowledge to do this. Just like in school, it's good to have a second set of eyes look over your essay. The same reason for a car. Find someone more knowledgeable. They can inspect it, tell you what's wrong with it, whether you should, whether you shouldn't. And then there's kind of a general, a general idea of what cars you should stick with and some you shouldn't. And then general knowledge and maintenance that you should also focus on. For example, Toyotas, Mazdas, the older ones, they're fairly more reliable. They made those cars to kind of be okay with tardiness on maintenance. They're like, okay, you know, not everybody can be so crazy about their cars, But German cars, BMWs, Audis, even the higher luxury, they're like, no, this has to be fine tuned, like everything, you know, oil change at 10,000 miles, oil change at 15. If you miss it, like engine's gonna Blow up like it's crazy. But some people like that and that's okay. If you're really, you know, strict about your maintenance and you keep up with it, then it's okay. Those are very sensitive cars, but that's kind of the two different ones.
- [27:03]
Hayden
Are there any trustworthy sites or resources? I mean, of course yourself. But when looking at purchasing a vehicle that would really give a good rundown of. Here is a good recommended vehicle. And stay away from this one.
- [27:19]
Jen
Like, I've usually gone to Carcomplaints.com, but I don't know how reliable that is. But that's usually what I've used.
- [27:27]
Grace
I'm a big advocate for YouTube. I know this is crazy, but I am on YouTube and I learned so many things from YouTube. There are mechanics that just for the love of cars go and have channels. Car Care nut is one and he reviews brand new cars. Love him. He's a Toyota mechanic and he makes videos reviewing every single new car that he gets his hands on fully in depth and shows you how to repair them and stuff like that too. But there's. You just type in what to look out for when buying a used car or what pre purchase inspection, what I should look out for. And if you're going to buy a used car and you want to bring a friend and you don't want to pay a mechanic to have them look at it, I'm sure you can find a, you know, a sheet to check off each box. What to look for under suspension. Is it creaking? Is there lights on the car? You should also always bring a little scanner, tells you if there's lights coming on the dash. But again, I think for the general public that is, that has a family and a 9 to 5 and is running around, I would just pay someone a little bit to have someone, a professional look at it because you don't really have the time to know what to look for.
- [28:47]
Jen
How much does that usually cost?
- [28:50]
Grace
I think it can be anywhere from 100 bucks to 200. 250. It's really somebody just poking around with a flashlight, maybe pulling on things here. And if there's creaks or sounds, I mean, they do this for a living. They can very easily tell you, you know, is this car gonna cost you several thousands of dollars in maintenance right after you buy it? It's very easy. I have friends all the time that ask me to come look at their cars and I can. And they buy it. I don't know why they do. They don't they, but they buy it and then they have me look at it. It drives me nuts. And I'm like, there is if had you have taken me prior, I could have saved you tons of money. Because it's, it's very quick, it's very easy to know. And most people just won't. They just think, oh, the outside looks great. And that's the thing too. You can't just go based off of how clean the inside of the car a used car is, how clean the paint is on a car. None of that. That's. Those are pretty panels. It doesn't matter. It's what's underneath it. You know, was the car in snow, in salt, is it rusty? Those are the things that are going to cost you thousands of dollars that actually matter.
- [30:04]
Hayden
Yeah, yeah. And a car is a depreciating asset. Like we know this is not an investment, but it can still last us. It doesn't also have to be such a money drain. And I think what you're describing are some of those things where we can protect it a little bit, at least for, you know, hopefully the seven to 10 years that we own that vehicle. Hopefully longer if we've made a good decision, but.
- [30:27]
Jen
Nice. Okay, I have one last question. You review a lot of TikTok social media videos, people who have had bad experiences with their brand new cars. So in 2025, what do you think? What do you see the most of in those videos? Like what are the cars that maybe in 2025 are the ones to stay away from?
- [30:56]
Grace
Unfortunately it's going. All the manufacturers are starting to do this, some more than others. But we're seeing Ford replace and Audi and Volkswagen replacing critical components with plastic. They're calling it weight saving. Looks like the. What is it? The oil pan used to be metal. It's under your car. If it got hit by something and it's metal, it should be all right. But now that it's plastic, it's a problem. We're having wet belts. It's called in engine. I know I'm again, I'm going too critical into this here.
- [31:29]
Jen
This is important stuff.
- [31:31]
Grace
Yeah, Ford, lots of American cars, even Audis and Volkswagens, they're putting lots of plastic in the engines. And that is a problem. And that's going to cost you a lot of money. And then cars, there's just notorious, I guess, stereotypes. Kia, Hyundai, some people are going to come at me for saying that that have engine problems constantly. Every car manufacturer has their own like Achilles heel with a specific car. And every Car is going to have its own set of problems. But the rule of thumb is the, the longer you wait to buy it, the more knowledge you'll have to know what to expect later down the line. You know what I'm saying?
- [32:18]
Jen
Yeah.
- [32:18]
Hayden
Like now more than ever important to be good to the one you got.
- [32:21]
Jen
You know what I'm saying?
- [32:23]
Hayden
If you've already got a car and.
- [32:25]
Jen
A still still can maintain it, do you think like this change in, in this planned obsolescence that manufacturers are using is going to be problematic in buying used cars in the future? Like how can we protect ourselves at that point?
- [32:45]
Grace
Like she said, stick with the car you have. I feel like a big thing is people will have a car that maybe needs a thousand dollars worth of work, $2,000 worth of work and maybe the car just isn't worth that. You in your mind, the car you can only sell for three. Cost you two to fix it. Might as well get a new one. You guys got to realize if you go and buy a brand new car, even a two to three year old used one, within the first year or two years after you buy it, that car is going to depreciate the maintenance to fix your current car. You know what I'm saying? Keep the car you have even if it costs a lot of money. Preventative maintenance is, is, is big. Most people wait till they hear the noises or it falls apart and then they fix it and it's going to cost you a lot more money than had you have kept up with oil changes, changed the coolant, did your brakes early, you know, changed your air filters. You neglect these things, it's gonna neglect you and it's gonna cost you a lot of money. So I, I think maintain your car as much as possible and it will treat you really well as well. You don't have to get a new one. I have a 15 year old car.
- [33:53]
Jen
That's amazing. Hayden, thank you so much. Let everyone know what your channels are on YouTube and how they can get more from you.
- [34:04]
Grace
So my main channel is called Hayden Schreier. It's my name. H A Y D E N Last name S C H R E I E R complicated to spell. Hopefully YouTube auto fills it and then I have the same name and then just mk2 and that's my car channel. But the one where we talk about finance and cars and marketing ploys and things to look out for is, is my name Hayden Schreier.
- [34:30]
Jen
Awesome.
- [34:31]
Hayden
Thanks so much, Hayden. Appreciate it.
- [34:33]
Grace
Yeah, super fun. Glad you had me on. I'd Be happy to do another one. I'm sure we could go on for hours talking about this stuff.
- [34:40]
Jen
Yes, I loved the end where he was talking about that planned obsolescence. And it is something to be thinking about when, especially if you're somebody who is by used, by used, by used. Like we are to be considering that stuff now when you're thinking about buying your next used car. And so I'm really glad he went off into a tangent and started talking about that stuff.
- [35:09]
Hayden
Yeah, but negotiating is also something that we can be considering considering and like definitely kind of under talked about negotiating in any sense for anything that that has to do with cars. Whether we are buying private, if we're buying at a dealership. So we've got a video to share about somebody who bought a car last year and had some great negotiating tips to share.
- [35:31]
Car Buying Expert
Just posted the cost breakdown video. So take a look at that. Let's get into negotiating. One thing about me as someone who works in clinical research, I'm going to do my research every single time before doing something. So I gave myself a, a little crash course by, you know, looking stuff up on TikTok, Google on car salesmen, car dealerships, negotiating all the things. So here's what I learned. One, do not let them know that you are making a down payment at all. Okay, so you're going to say zero down up until the very last second. You guys saw in my original video that I went two different days. So on that first day that I was by myself, I kept saying, oh no, it's just going to be zero down, zero down, zero down, second day. Said that up until the last hour I was there. Then we started playing around with the down payment. Another thing not to talk about is the possibility of a trade in. Don't talk about it, don't mention it, nothing. Now that wasn't the case for me because I wasn't trading in that car. But that's a possibility for you. Don't talk about it because they will add it into your fees somehow, some way. Also, when I got asked about monthly payments, I told them as low as possible. I did not give them a number or anything. I just said as low as possible. They said what is as low as possible? Look, like I said, oh, don't know what to tell you, just low. I wouldn't be specific at all. I kept it super vague. As a woman going into a car dealership, you're mainly talking to men and you, you have to go in super confident. That is a part of negotiating. You have to act like you know what you're doing. First of all, these men were never going to play my base about numbers. You saw my cost breakdown video. You saw that my total came out to $28,454. They originally were going to put it at somewhere over 30,000. Like I think it was close to 33,000 or 35,000, something like that. I talked them down out of a lot of things. One of the things that they wanted to add was an extended warranty. The car already comes with a three year warranty. I told them this is pro, not even probably, this is not my forever car. My dream car is not this car. I told them I'm probably going to switch it out in max five years. So when that three year mark comes, I'm probably, if I need to get a warranty, I will buy it then out of pocket, but I will not be financing a warranty. And they'll try to trick you into that like, oh, it's cheaper now. No, there's interest on it. It's not cheaper. Another thing, and this is specific to Gord, but they talked about the gap insurance. So essentially, if something were to happen to your car and insurance doesn't pay for everything, they would pay the gaps. So that's the gap insurance. Ford would pay the gap. This guy really tried to sell this to me. I mean, two or three different salesmen came up to me to have me consider adding that on. And I was like, no. I told them, as far as numbers goes, it doesn't make sense for me to add that on. That is just more money in their pockets. If, God forbid, if something were to happen, I'd be able to take care of it. You know what I'm saying? I think one thing that he really tried to sell was, oh, well, it's just an extra 15amonth. First of all, his math was wrong. I did the math. His machine math is wrong. It was like closer to a little over 20amonth. And then second, I don't think his math was actually wrong. I think he actually knew. He just thought I was stupid. And that's the money that could go towards bills. So you thought it was just little things like that that I took out that I guess the normal Ford customer or car customer, dealerships, I don't know, would get. And I wasn't having it because I knew that the three fees that you really should be taking care of are car fees. So license and registration, taxes and documentation fees. That's really it. So anything outside of that Is also at the end of negotiations, guys, I was tired. They had three different salesmen talk to me. But one thing I would have done differently was the documentation fee being 899. Cuz I know someone looked at that cost breakdown and was like what? I had a whole plan. But the way they wore me out in there, I was like, you know what, forget it, just let that be.
- [38:36]
Hayden
My plan was to.
- [38:37]
Car Buying Expert
And this is what I recommend for anyone who sees any type of fees that's a little bit higher than normal. Just bring numbers and facts. I knew that the average documentation fee in North Carolina for cars is $699. So I had the plan to say, hey look, this documentation fee, it's a little higher than the median documentation fee in North Carolina. So I would like to get this number closer down to the average something along those lines. I wasn't going to fight over 200 after I already just knocked down like 5000 plus in additives and fees. I was like, you know what? You know it's a win. It's a win. I got a car for under 30. It's a win. And the car payment is 388. It's a win.
- [39:13]
Jen
Yeah.
- [39:14]
Hayden
Dang.
- [39:14]
Jen
I mean so the zero down thing was corroborated by several other videos from car experts that I won't include in here. But they all said the same thing. Don't tell them you have any money to put down.
- [39:29]
Hayden
Didn't know that.
- [39:30]
Jen
Didn't know that. Well, you buy a car every five or so years. How are you supposed to say, say abreast to all this information.
- [39:36]
Hayden
And if the last time you bought a car before that was pre pandemic and you were able to do all this private sales stuff, you might have never walked into a dealership before. That was my story. Like we were always getting cars from Facebook marketplace before. So it was our first time to try to be at a dealership. And I thought I, you know, knew some things but man, I feel so much more equipped.
- [39:59]
Jen
Yeah. Also, she's also right about trade ins. I know from personal experience. I wish I'd known this when I was.
- [40:06]
Hayden
When do you eventually talk about that?
- [40:08]
Jen
So literally all this stuff she brought up once they already ran all of the numbers and stuff and she got an estimated payment. Yeah. And then she was like, okay, so how does this change if I put this much down? How does this change if I trade in this car? Yeah, so that's changed way.
- [40:29]
Hayden
Oh, it's so baller. Right.
- [40:30]
Jen
And then she also in A different video mentioned that she got her car down is a new car, but it was a, a test model. So the car already had 3,000 miles on it and that's why she was able to get it so much lower than the standard msrp.
- [40:49]
Hayden
Yeah. Ultimately you have permission to say no. You have permission to say no to getting a new car, to trading in your car, to purchasing a brand new car, to paying out the ear for a new car. Like there are ways that you do not need to be paying $750 a month for your WIP. And we hope we've convinced you.
- [41:17]
Jen
So, yeah, they are trying to normalize high payments on the Internet. All of these videos that you see, they're from dealerships who know they don't necessarily want you to have a $1500 payment or a $2000 payment, but they know if you know there are some crazy, crazy in quotations people out there that do, then your $700 payment looks real good and you're a real good person, not taking into account if it's actually the best financial decision for you. So there are, I think hopefully Hayden's help with how to vet used cars can help you kind of see that.
- [42:07]
Hayden
Yeah, you have permission to have one vehicle. Eric and I just have one vehicle.
- [42:11]
Jen
Yeah.
- [42:11]
Hayden
You've got a used minivan. Yeah. It doesn't need to look the way that influencers are making it seem like.
- [42:19]
Jen
Yeah, you also have permission to have a car payment.
- [42:22]
Hayden
Yeah.
- [42:22]
Jen
If you want. We both have car payments. And typically for people who have been in the debt free community, that's frowned upon. But not here. This is a safe space. You know what else is also not frowned upon?
- [42:37]
Hayden
The bill of the week.
- [42:49]
Jill
That's right. It's time for the best minute of your entire week. Maybe a baby was born and his name is William. Maybe you paid off your mortgage, maybe your car died and you're happy to not have to pay that bill anymore. Duck Bills, Buffalo Bills, Bill Clinton. This is the bill of the week.
- [43:09]
Bill
My name's Bill. I'm a car buying expert and I love saving you money at the dealership. If you tell the dealership that you're paying with cash or that you already have a loan and you just need to go get a check, the dealership is going to be way more reluctant to give you any kind of a discount on the purchase price. I'm sure a lot of you are scratching your heads. Why would that be? What does it matter? Well, the dealership makes money when you finance through them. And more importantly, you have an open credit line at the dealership now. So when you go into the office to sign all the papers and they're trying to sell you a warranty gap or things of that nature, if you have an open credit line, they could just add it to the loan. But if you bring cash or a check from your lender, there's really no way for them to get you to purchase those things unless you come out of pocket or put it on a credit card or open up another line of credit with them, which almost nobody does. This is why when some of you are trying to get a discount on a vehicle and the dealership says are you cash or finance? And you tell them finance, they give into your request for the discount because they're going to charge you a bunch on the back end on the financing, they're going to raise your interest rate and do things to get the money that they just gave you back. So how do you get around this and still get a discount at the dealership? When you're a cash buyer or you're bringing a check, I would say play ball. Tell the dealership you're willing to use their financing or whatever they need you to do as long as you get the discount that you're looking for and then simply pay the loan off on the first payment. If you planned on bringing a check from your lender, chances are good the dealership works with that lender. So simply make sure the dealership is giving you the same rate and same term that your lender offered you and not marking the rate up. This is going to make it a lot more convenient for you because now you don't have to go get a check. You can do everything in house and the dealership's making a little bit of money. If they're making a little bit of money, maybe it's a good time to ask for a discount. What a lot of you don't know is that the dealership makes tons of money on financing and back end products and it's actually more money than they make on the purchase price and profit margin of selling the vehicle. So if you're going to be a cash buyer or you're going to bring a check, I would tell you that mum is the word. For more car buying tips, tricks and hacks just like this one, please follow Billy the Car Kid.
- [44:49]
Hayden
Oh that's right, we found our own bill.
- [44:53]
Jen
Thank you because it's our show. Billy the Car Kid, who doesn't know he was this weeks, but I am.
- [45:02]
Hayden
Loving these tips of just holding your cards close. It feels so legit and empowering and powerful.
- [45:13]
Jen
I'm also loving just sticking it to people who are stuck in the past with financial tips and listening to outside voices and refining how we save money. We don't have to completely go against traditional wisdom, but there are new ways to save that can optimize our money. Better dealers.
- [45:42]
Hayden
Dealerships are not going to see us come in. We are just forming our own little community of people who know to keep the lip zipped.
- [45:51]
Jen
So I went in when I got our car and had pre approval from our credit union. So that was one of the things we did is we got pre approved at our credit union. Credit unions have the best interest rates and that's again how 7% was the average for used car interest rates. And we were able to get four and a half. And the dealership did work with our credit union. So we were like, all right, we'll go, you know, we'll go through you, through the credit union. And they were able to get us a smidgen more off.
- [46:27]
Hayden
Oh, nice.
- [46:28]
Jen
For playing ball.
- [46:30]
Hayden
Okay, cool. That's negotiation. If you all listening, have some tips to share about a bill. You lowered a way to save some of those money. Bills or your name is Bill Billy William. Frugalfriendspodcast.com Bill, Bill, leave us your bill. We can't wait to hear it. Click the link in the description if you're watching this on YouTube and you can leave a bill that way too.
- [46:50]
Jen
Bam.
- [46:52]
Hayden
Now it's time for the lightning round.
- [46:58]
Jen
All right. What is the best deal you've ever scored on a car?
- [47:04]
Hayden
Jen, this is your favorite story to tell.
- [47:06]
Jen
This is. Okay, I saved $4,000 on our van purchase. I had the car that I wanted, which was a Chrysler Pacifica. Don't come at me for Chryslers. It's a minivan. Let's get over it. And I knew what I wanted. I wanted leather and I wanted adaptive cruise control. And I found two because I wanted to not. I was. My heart was set on one, but I found two because I wanted to compare both. I didn't want to just go in and have my heart set on one and then be blinded and not negotiate a good deal. And so I went and tried the first one that I didn't really want because that's what you got to do. You got to try the one that you don't really want before the one you do and got the. The price, the terms, what it would be, everything. I wish I had said no down. And I Wish I had said no trade in this. I wish I could go back and see what kind of deal I could have got then, but. And I was like, okay, cool. This has cloth seats. It does not have adaptive cruise control, but it's got low mileage. The other one had all the things I wanted, but the mileage was a little higher. And so I went and I test drove the one that I actually wanted. It was great. And I sat in negotiations for hours trying to get the price down because the price for this. These cars were the same exact price online, if you looked at them online, same price, but this one was being quoted out the door $4,000 higher than the other one. And so I kept trying to get more off and I hours. And finally I was like, are these things worth $4,000? Are they really? Do I use like cruise control enough to pay $4,000 for it? Because the other the cloth seats are black, so it's like whatever stain it, who cares? And I had to say no. And so there was this. I was tired and I had this sunk cost bias. I already spent so much time with this guy. I'd talked to so many people. I'd gotten so much off already. But I had to get up and leave and honestly go pick up my child. But I. So that was my out. But I just had to. I had to leave and go to the other dealership and get the other car because it just wasn't worth $4,000 to me. And I looked it up later. If I wanted to add adaptive cruise control to this car, it'd be $2,000. And clearly I haven't paid $2,000 for me because it's wasn't even worth that.
- [49:59]
Hayden
And now you do mostly just city driving. So the cruise control wouldn't have come in handy all that often.
- [50:06]
Jen
I mean, and it kind of worked out because since I had the seizure last year, I wouldn't want to use cruise control. I would want to have, like, if something happens to me, have my foot off the gas. Right. So like now it just. It kind of like worked out in my favor.
- [50:27]
Hayden
Yeah. Best deal we ever got on a car was we did a little trade seat with friends where we helped them renovate their kitchen. Low level stuff like no, no big like gut or remodel. Just like backsplash and under cabinet lighting and things like that. And they gave us their car. So that worked out as a Pontiac vibe. And it was perfect vibe for a couple of years. It was a whole vibe.
- [50:57]
Jen
Yeah.
- [50:58]
Hayden
And then we then ended up selling that car to another friend at a really good deal and then they totaled it. So the vibe is.
- [51:07]
Jen
The vibe is dead.
- [51:10]
Hayden
It was a great deal for us at the time. We love a trade. I mean we just love a good. I'll give you this if you give me that. No money involved.
- [51:22]
Jen
Love that. If you are in the market for a car and you want to save for a down payment fast. Because we love saying that we're not putting down a down payment, but we love actually putting a down payment down because it does lower your interest rate and save you money. Check out our video on how to save $10,000 really for fast. We even talk about transportation and a reality TV star who is still driving her 2012 car from college.
- [51:55]
Hayden
I love that episode, which is a hack. Even if you have a lot of money, it doesn't mean you have to have a really nice car.
- [52:01]
Jen
Yes. And if you want to follow Hayden, check out his channels. We'll put them in the description. He has a fantastic YouTube channel, very similar to the ideas and stuff that we put out. He just reviews social media like videos. It's so fun and we love reading your kind reviews. Whether it's comments on YouTube, reviews on Spotify or Apple, or reviews of our book. Buy what you love without going broke. Mostly on Amazon like this one from Emma. It's five stars. Emma Short version if you are a married if you are married and have struggled to find a financial plan that suits you and your partner, read this book and follow this podcast. It's not a marriage book. Anyone can read it and I hope many people do. I just found it to be very helpful tool for us on our journey. Long version. It will help you understand what deeply drives your financial desires, give you tools to better understand your partner's desires and learn how to prioritize it all. Giving all these things proper values for the season you find yourselves in. These tools can be used in any and every life season because let's be real, life seasons change, finances shift and change. But knowing ourselves, what we value and how to honor that is a skill we should utilize every day. This book helps you do that in a relatable, attainable way.
- [53:37]
Hayden
Thank you Emma. That's so cool. I'm really glad to hear that it was helpful for you in relationships. Again, it wasn't written like you said specifically for that. However, we do have questions at the end and action steps that you can take after every single chapter. So it is a really compelling way to be able to engage with other people whether it's a book club or, or a partner. I think there's a lot that can be done then in community with the way that the book is set up. So thank you so much.
- [54:08]
Jen
And like you're. If we, I mean, as people who've been married for 10 years, 12 years, 13, girl. Yeah, it's. It is something that is so integral to sustaining a long term marriage is being on the same page with what your individual values are and honoring those in each other.
- [54:28]
Hayden
Yeah. If you're curious about this book, go get it. Buywhatyoulovebook.com if you've read it and you did love it, but you haven't reviewed it, we'd love for you to just so we can have some more content.
- [54:40]
Jen
To read your reviews, hear your review.
- [54:42]
Hayden
And if you're on YouTube or you're not on YouTube yet, on YouTube, please subscribe. Please, like, please leave a comment. Whether or not it has anything to do with this episode, it really helps.
- [54:51]
Jen
Us if you liked this kind of format. This is a, a fresh kind of interview format for us. And please let us know what you like, let us know what you don't. But please be nice because be kind.
- [55:05]
Hayden
Yeah, we're real.
- [55:06]
Jen
Okay, thanks.
- [55:07]
Car Buying Expert
Bye.
- [55:09]
Jen
Frugal Friends is produced by Eric Sirianna.
- [55:23]
Hayden
Okay, I'm hungry.
- [55:26]
Jen
Yes, you are.
- [55:27]
Hayden
It was a little grumpy dance because I'm feeling hungry.
- [55:31]
Jen
Yep. And I recognize that. And thank you for honoring my time constraints.
- [55:38]
Hayden
Of course. It is priority, Jen. And I'm so sorry that sometimes I'm really irritable.
- [55:47]
Jen
Only when you're hungry. And it's a very reasonable reason to be angry is I need food. Yeah. Yeah, we value food. And you got this.
- [56:05]
Hayden
Thank you.
- [56:05]
Jen
Let's go eat. Let's go eat.
- [56:08]
Jill
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