Heading to the dealership can be intimidating, and buying a car is a significant expense that can present a monthly bill for many years to come. It’s important to know exactly what to look for before you begin scouring local listings and visiting auto dealers. Keep these facets of the car buying process in mind as you get started.
Create an Airtight Budget
Before you begin your search, sit down and create your budget. It’s important that you’re realistic about how much you can afford to spend on a new vehicle. Most financial experts recommend you spend no more than 20 percent of your total monthly budget on car-related expenses; this includes car insurance and maintenance needs on top of car payments. Be sure to include these costs in your budget when drawing up plans.
Get Your Finances in Order
If you know what type of car you’re looking for, you have a better idea of just how much you’ll need to handle expenses. If you’re financing through lending, it’s important to get pre-approved for a car loan. It helps you avoid the high-interest loans the auto dealership is bound to offer, and gives you a better vantage point of your buying capabilities. Having all of this settled before you step foot on the dealership lot will likely save you a great deal of frustration. One headache fewer in the car buying process is something we can all get behind.
New Vs. Used
You’ll need to choose buying a new or used car Keep in mind that the moment you drive a new car off the lot, it loses up to 20 percent of its value instantly. However, that’s not to say new cars don’t have their advantages. From the latest in technology and safety features to manufacturer warranties, some car buyers simply want the peace of mind a new vehicle brings. If you plan on buying a new car, be sure to research the invoice price. This is the amount the dealer paid for the car from the automobile manufacturer like Ford. Keep in mind that the MSRP is the sticker price, and designed to give the dealers hundreds to thousands of dollars in profits. In most cases, you should be able to negotiate the purchase price of your new car closer to the invoice price. Also be sure to check with the manufacturer’s sites for rebates that could save you even more.
If you’re leaning towards a used car, be sure to buy from a reputable dealer or trusted seller. Before handing over the cash, have a trusted mechanic look at the vehicle from top to bottom to ensure it’s not a lemon. From brakes to airbags, engine health to tire considerations, there’s a lot to keep in mind when shopping for a used car, so be sure to do your research ahead of time.
What’s Your Trade-In Value?
If you plan on trading in your current vehicle during the purchase, be sure you know ahead of time just how much you can expect to get from the dealer. A simple search with Kelley Blue Book can give you a ballpark range of your car’s trade-in value. After getting your offer from the dealer, consider if trading in your vehicle is the best option. In most cases, you get more money for an older vehicle if you sell it yourself. Car buying companies like CarBuyerUSA have streamlined the process for those who don’t want to meet with private buyers or deal with shoddy Craigslist posts. If you’re looking for ease, you can’t beat a company designed to buy cars.
It’s important to take your time when purchasing a car, and there are many considerations to have in order before you put money down on the vehicle of your dreams. Keep these tips and strategies in mind and ensure your purchase is a good investment for your future.