Drive It Home - financial considerations for couples when deciding what automobile to buy - Brief Article

Kiplinger's Personal Finance Magazine, August, 2001 by Elizabeth Razzi

COUPLES | When you go CAR SHOPPING, know what you both want, and then stick together.

OH, HOW things change when a couple falls in love! Consider the transformation that swept over Erik Lundberg and Deborah Finzen when they fell in love--with a 2001 Acura MDX sport utility vehicle.

Lundberg and Finzen, who married six years ago, had always been pragmatic when it came to cars: Buy 'em used, then drive 'em till they quit. Yet early this year they found themselves on a waiting list for a brand-new luxury SUV.

The affair began with the first test-drive. The Acura "really had everything we wanted: good gas mileage, great emissions, a foldable third seat," says Erik. Deborah took a back seat at first when it came to enthusiasm. "He kept saying, `This is your car,' but he was definitely more jazzed about it than I was," she recalls. "I'm not that much of a car person."

In fact, despite the nearly 115,000-mile odometer reading on Deborah's 1989 Toyota Camry, she didn't think quitting time had arrived--until she noticed a steering-fluid leak. A little leak is fixable enough, but it got Deborah thinking about the prospect of a roadside breakdown with the couple's 3-year-old daughter, Ellyson, on board. The car lacked air bags, too.

So Deborah is now "not much of a car person" who tools around the San Francisco area in a trendy new SUV that cost more than $40,000, including tax.

Early decisions. Many couples find that buying a big-ticket item like a car accentuates their differing attitudes toward money. With the average new car going for $25,000, there's plenty to squabble over. Who will get to drive it more often? What will you have to cut back on to handle a hefty car payment? Can you find a vehicle that satisfies both buyers' top criteria? Erik's main priority, for example, was a car that handled well, while Deborah was more interested in comfort and seating arrangements. "We both cared about safety," he adds.

Couples need to examine their priorities before they hit the showrooms, says David Bach, author of Smart Couples Finish Rich (Broadway Books, $25). "Most people don't have savings plans for purchases," he says. "But if you're buying an SUV, you could be paying $45,000. It is a really big deal."

Bill Brooks, CEO of the Brooks Group, a sales-consulting firm in Greensboro, N.C., says it's important to do your homework early. Decide together how much you're willing to pay, know the going rate on car loans, and discuss whether you would consider a lease.

Erik took the lead in researching minivans and SUVs on the Internet, then both he and Deborah went for test-drives. (Find links to car-buying Web sites at Kiplinger.com that can help you narrow your field to a few strong contenders.)

Before they talked money with dealers, Erik and Deborah agreed that the Acura offered the best combination of features, even though its sticker price was at the high end of their $30,000-to-$40,000 budget. Equally important, they faced up to what they would have to sacrifice in return. They've had to cut back on some remodeling they had been saving for. On hold are plans to replace windows and doors in their home, in Larkspur, Cal. "I'm glad we bought the car," says Deborah. "It's a necessary item, whereas my windows are not."

They also decided to pay cash for the vehicle, though their financial planner wanted them to invest the money. Why go into debt, they thought, when they had the cash on hand in a money-market account? And they have no regrets about putting their cash into wheels instead of stocks. "At least we got a car out of it before the stock market plummeted," notes Deborah.

With the groundwork laid, they began shopping in earnest--and hit a snag: All the dealers they contacted were asking a $2,000 premium for -" quick delivery of the popular MDX. Unwilling to pay up, Deborah and Erik put their names on one dealer's list and prepared for a four-month wait. But then they got a break: A competitor came through with an MDX within a few weeks, and without the premium.

Noncompete agreement. Couples who aren't as united as Erik and Deborah can get into trouble because they may compete against one another, often without realizing it. "The worst thing that happens is when one spouse goes out and makes a big expenditure without consulting the other," says Bach.

Sometimes, even if a couple has agreed to spend a lot on something that mainly benefits one partner, the other starts to feel entitled to a similar splurge. "When two people are competing," says Bach, "one has to lose. Remember, you're on the same team."

So when you're ready to buy, present a united front to the dealer. That may mean delegating the negotiations to the better haggler. Deborah, for example, already had her hands full with Ellyson and left the bargaining to Erik, who handled most of it by telephone.

Then wear your best poker faces to the showroom. It's important that neither partner shows so much enthusiasm that the other feels thrust into the role of the heavy, says Brooks. He compares that triangle to the classic child-parent scenario: "If a child discovers one parent is on his side, the child will ally with that parent and form a two-versus-one relationship." When a kid does it, you may be manipulated into ice cream before dinner. When a car salesman does it, you could wind up with alloy wheels and a roof rack. --Reporter: COURTNEY MCGRATH