A car is a major investment that requires extensive research and a budget. When buying a car, it’s easy to make mistakes. Perhaps you have never bought a car before, or it’s been a long time since you last made a purchase.
You need to find a car that suits your needs and is within your budget. Read on to find out how you can make that critical decision.
Evaluate Your Needs
Your ideal car is one that compliments your personality, your needs, and your daily preferences. The type of car you purchase also speaks a lot about your taste and who you are. If you are a person who likes weekend road trips, your choice of car will not be similar to that of a person who prefers to fly. Therefore, practicality is a key factor to consider when making this decision.
You need to determine the average number of passengers you will be carrying every day. Next, evaluate the type of roads you’ll be using. Will they be off-road service streets or highways? You also have to assess your average commute distance and the amount of fuel you plan to spend each day. If you are an amateur driver, you may need things such as a backup camera and other driving assistive controls. Other things such as garage space and if you’ll be carrying children will also play an important role.
Determine Your Budget
The majority of car buyers don’t pay in cash. Instead, you will need some form of financing to help you purchase that dream car. The most important thing to remember when setting your budget is that you must get financing that has affordable monthly payments. Otherwise, you run the risk of having your car being repossessed by your lender after a few months. Generally, your monthly payments are supposed to be less than 15% of your monthly income. Although a used car is likely to be cheaper, it should also be subjected to the same rules.
In addition to the cost of the car, you also need to factor in other costs such as insurance and fuel. This cost should not be more than 7% of your monthly income. This means that you should select the car with the right CC. Many online affordability calculators can show you how much it will cost to fuel and insure every car model.
Plan For Trade-In
One way of buying a car is through a trade-in. To do this, ensure you have your current car’s market value before you contact a dealership. Arming yourself with this information will help you know what to expect and how much more money you may have to put up. There are many free online appraisal tools you can use before heading to a dealership. You can also use the tools to appraise other tools such as a meat slicer used for slicing into a perfect cut.
Keep It Simple
When buying a car at a dealership, don’t involve yourself in many things. Buying a car is like a game where the person who talks and reveals too much loses. If you are doing a trade-in, the first thing you should start with is the price of the car you are purchasing. The salespeople will try to know if you are doing a trade-in or buying a new car. They need this information to know how they can get the maximum amount of money from you. It would be best if you didn’t give them this opportunity.
Once you have settled on the price of the car you are about to purchase, it’s time to talk about your current car. Use the online research you did earlier to have a ballpark figure.
Avoid Buying Add-ons at the Dealership
Once you purchase the car, drive away immediately. If you linger around and start purchasing add-ons, you are likely to lose more money. That is because you have spent several hours bargaining and haggling over the trade-in. An exhausted person cannot make rational financial decisions and is likely to purchase overpriced items.
Dealerships make money from a lot of things. If you decide to buy add-ons from the dealership where you just purchased your car, they will try to sell you additional things such as tire protection and insurance. If you’re not careful, some of these add-ons may be priced 300% more than at other places. This is money you can save to buy a charcoal smoker that is a great choice if you’re searing meat.
Avoid Long-term Loans
Research shows that more than 30% of new car loans run for more than six years. That is a dangerous trend because it means you will end up paying more money as interest. Although long term loans have lower monthly payments, they have higher interests. You’ll end up buying cars at a higher price than you would have done if you had gone for a shorter-term loan.
Getting Started Buying a car is in itself a liberating thing. But if you don’t have the right information, you may end up losing money and fall into financial chaos. Use these tips to get the best car deal.