Follow this guide to easily buy a new car
For many people, a car could be the second-biggest expense after housing. Getting it right is important. You also need to take time and think about it wisely to ensure you're making the best investment. If you're buying your first car, this is a big step. But, it doesn't have to be a daunting one. However, many people still make huge mistakes buying cars.
For instance, some will take new car purchases with a trade-in. Statistics show that a third of buyers roll over an average of $4,000 in debt from their last car into their new loan. In short, they're paying for a car they're not driving. But don't fret! Here's a guide to get you started.
1. Keep things Simple at the Dealership
You need to focus and keep everything simple, especially if you're buying your car at a dealership. First, avoid telling the salespeople too much. See, when you want to find your next car, start with the price of the vehicle you're buying. At the dealership, the salesperson will want to know if you're planning to trade-in another car or whether you want to get a loan through the dealership. Don't answer these questions. Please keep it simple!
2. Pre-Financing Options
Most people get financing from the car dealership – financially, this isn't fiscally responsible. Why? The interest rates at most dealerships are much higher than loan rates obtained from banks or credit unions. Your bank is the best place to start researching car loan rates. What's more, you can get "customer discounts" that you won't find anywhere else. Start by sourcing for different financing quotes at once from money lending institutions.
3. Shop and Research Around
Shop around before you buy a car unless it's an emergency. Here's a rule of thumb you need to stick to: make sure that you walk out of at least one dealership. Is this effective? Doing this helps you know the dealership's rock-bottom price, which will be given to you before you leave. Also, consider exploring out-of-town dealerships. Sometimes, dealerships price their cars depending on their location.
4. What Are Your Priorities?
You should be looking for a car that has a good maintenance record. Sure, there are exceptions. You want to get a car that will keep you out of the mechanic's shop. Narrow down your options based on your lifestyle. Some everyday things to factor in include electric car, family cars, gas mileage, bigger space for dogs, etc. Avoid picking out a flashy car just for the sake of having one. The bottom line: assess your priorities!
5. Used vs. New
Look, we get it; buying a used car is a good deal. However, when a car drives off the lot, it loses a big chunk of value. A new car depreciates by more than 10% in the first month of its purchase. This means you can expect your car to lose an additional 10 percent of its value each year. So yes, purchasing a used car is a great decision financially.
Buying a car for the first time can be daunting. However, if you take a strategic and systematic approach, you will finally pay off for all the years you own your car. Take time and try your best to negotiate a good deal. Additionally, ensure you get a pre-purchase inspection. Finally, remember to test-drive it and work on your budget.
