Tips To Buying A Car
I remember when I bought my first car from a dealership, I was nervous. I had never done this before, I wanted to make sure I got a good deal. I wanted to be confident and not let them take advantage of me. If I had access to some decent information that would walk me through it a bit I would have been more comfortable. So here are a few tips to buying a car that I wish I had! Visit the full article at kbb.com
Tips to buying a car – specifically 1st time buyers:
Know what you can spend monthly
While this may look similar to #10, your level of indebtedness is different from your monthly commitment. Neither one — for a first-time buyer — should be out of balance in comparison to your other assets (at this point in your life those assets are probably limited to your most recent purchase at H&M). If you’re financing, figure $25/month for every thousand dollars that you borrow for 48 months, and $20/month on 60-month financing. It follows that every $10K borrowed is $250/month for four years, and $200/month for five. Again, this is the base obligation; insurance, fuel and periodic maintenance are above and beyond this.
I thought that was a very helpful tip! This way you can easily figure out what you can afford.
Establish your transportation needs
We know. Despite our cautionary note, you have short-term enthusiasm UP TO HERE. A MINI Convertible or Fiat Cabriolet may be the car of the moment, but is it going to work for you as a day-in/day-out piece of transportation? Conversely, you may think you need a minivan or pickup for ALL OF YOUR STUFF, but on those occasions when you’re moving to a new apartment or, uh, moving home, you can rent a pickup. Given the cost of fuel, insurance and — in many cities — monthly parking, don’t buy what you don’t need. And perhaps consider renting what you need, only when you need it.
Do your research (it’s never been easier)
In that you’re reading this at one of the foremost websites for car purchasers, online research is also intuitive. There is, at this point, an amazing amount of both information and perspective on new cars and their late-model alternatives. Once you’ve digested it all, balance it with your gut instincts — or those instincts of someone whose gut you trust. And be proactive; if you see someone with a car you have an interest in — and they’re not doing 90 miles per hour — stop and ask them about their ownership experience.
Secure financing, or know your options
Financing issues are somewhat like the purchase price; there has been an exponential growth in the number of resources. That, however, is mitigated by your lack of credit history or, in an increasing number of instances, marginal credit history. The last thing you want, however, is to be in a room with an F&I (Finance and Insurance) rep, and he or she is holding all the cards; the deck — if you will — is stacked against you. Better to talk with your credit union, bank or insurance provider (many have the capability and desire to finance your purchase), and line up your financing in advance. You can always go with the dealer option if it’s competitive, but never approach it as if the dealer is the only money game in town.
Determine the proper purchase price
Once you’ve decided what you like — and have already established what you can afford — it’s time to arrive at a purchase price. The Kelley Blue Book Fair Purchase Price gives you an accurate idea of what people have paid in your area for the car you have an interest in. A credit union should also be able to provide you with perspective, and may have a contact on the showroom floor. An important note regarding referrals: Get the referral before taking another salesman’s time for a walkaround and demo. Most of these people work on commission, and commissions are notoriously small. If you plan on working with a referral, start with a referral. Finally, when discussing what you want to pay, don’t reveal a “per month” number; that’s the oldest trick in the book. If you’re thinking you can budget $20K — and you’re looking at a $25K car — tell ’em $20K. You can always work up…while it’s much harder to back up.
Hopefully these tips to buying a car helped you out. Buying a car can be tricky, but armed with solid information your personal finances will thank you and you will have made a great investment. Make sure to share this post!