So you have decided to buy a car! That’s just the beginning.
You’ll need to spend time in research, research and research. And did I say research? With the market flooded with countless brands and models and types of cars, from so many manufacturers from your country or imported ones, choosing the right car is no mean feat.
Which one for me?
While the task of buying a car seems complicated and overwhelming, you can make it easy by doing some homework before you actually walk in to a car lot. Start with deciding the type of car that would meet your specific needs. Again the car market is filled with a variety of great products from different manufacturers. Internet sites will give you details of each car, help you pick up a specific car and then get a list of similar cars in the same class.
Count the cost: You need to now decide your budget. How much can you spend? It’s not just about low monthly installments. Your budget should include the cost of owning the car. So apart from the actual cost of the car, take into account registration, insurance costs, maintenance and the amount you will be spending on gas.
Car loan: Buying a car is a necessity not an investment, mostly because the value of the car depreciates over the years. Experts say the value depreciates almost 20 % in the first two years. So, if you have taken a long term loan with low monthly installments, the value of your car will decline faster than the loan balance. Long term loan also means you land up paying more interest. So signing up for the shortest term length will keep your total interest lower. Most experts suggest your monthly car payment shouldn’t be more than 20% of your monthly take-home pay.
While many dealerships offer loans for cars, shop around for loans beforehand. Inquire in your local banks, which offer low interest loans or even financing companies. Know your credit rating too before you apply for loans.
Car Insurance: Never drive your car without insurance. Most dealerships offer insurance but again it is always good to shop around and compare various options and then decide. Look for carriers that offer discounts and credits. These can add up to additional savings. Senior citizens can additional benefits. Use an AARP car insurance calculator to find out just how much!
Choosing a dealership-Big deal: Choosing the right dealer is extremely important. Arm yourself with information about various dealers available on websites and various forums. Here buyers write about their good and bad experiences, various tricks used by salesman to confuse you to make the maximum profit. This will definitely help you hold the keys while negotiating the deal.
Right price? - Once you have selected a car, check out the TMV (Total Market Value) price, invoice price of the car and the manufacturer’s suggested retail price (MSRP) also known as sticker price, available on Edmunds.com. Never agree to pay more than the MRSP. This information helps you get a good bargain without letting the dealer take you for a ride. Negotiations would then be a lot easier and time-saving.
New car and used cars: A used car on average costs less than half the price of a new car. So buying a used car can turn out to be a good bargain.
Many new car dealerships also sell used cars and so do private sellers. Since a used car would cost a lot to maintain, it’s important to find out whether it is a Certified Used Vehicle. Research used cars online at KBB (Kelly Blue Book), Consumer Reports and other such tools for fair pricing. Based on the vehicle identification number (VIN), a CARFAX search will give you a Vehicle History Report. This report will provide information about the car’s previous owners, whether it had any accidents, whether it was stolen or salvaged, any odometer discrepancies and other details. So get a CARFAX guarantee on the vehicle. It is also good to get your garage mechanic, not associated with the seller, to take a thorough examination of the car before you proceed to make the deal.
Test Drive: It’s important to test drive the car over a reasonable distance in the way you would use it. Drive it on different road surfaces, freeways, stop-and-go traffic, bumpy roads at different speeds. Test the brakes. Get in and out of the car and check out whether you are comfortable. Take time to do this and be sure you are satisfied.
Trade in: You will get a good price for your car if you sell it yourself but you can opt for a trade in, if you don’t want all the trouble.
Always get the right price for your new car and then talk about trading in your old car. Find out the cost of your old car from the Kelly Blue Book before offering to trade in. This way you will be clear about how much you will pay for your new car without the dealer confusing you with all the math of discounts and interest rates.
After navigating through the buying process with well-researched information, you can ride off happily in your car. You can be sure that you, your car and your wallet will have a smooth ride down the road.
Thanks to Andrea for the tip!
