May 06, 2018

Buying a New Car and Keeping It Affordable

You can’t avoid it anymore. It is time to buy a new car. The thought of being at the mercy of the salesman in the car dealership is daunting. The good news is that you don’t have to be at anyone’s mercy.

If you already own a car, it is wise to use that to save money on a new one. Many people choose to trade their car in for a newer one. The downside to that is it keeps you limited to choosing a car only at the dealership where you can trade your old one in.

If you want to be free to choose anywhere you want, cash would be more helpful. Consider selling your car to a junkyard that buys cars. You will then get the cash in your hands. Research to find out how much your car is worth and then find the junkyard that will give you the most for your car.


Research 

It is important to do your research before walking into a car dealership. If you do plan on trading in your old car, research the market values for your current car. This will help you to bargain successfully for your newer car.

Researching the car you want to buy is crucial. Consumer Reports has a list of the best and the worst cars. The Insurance Institute for Highway Safety sorts safety data by car and make. Cars.com, Truecar.com, CARFAX.com, Costco Auto, NADA Guides, Auto Trader, and Kelley Blue Book, are helpful places to start doing research on cars in your price range. Look for the price that the dealer paid the manufacturer for the car. You will need these prices to negotiate successfully for your car.

Your knowledge of cars is important because it may stop you from buying a car on impulse. Buying a car is a financial transaction that is also tied to emotions and car dealers will always use tactics that play on your emotions. Their job is to sell you the car today, so it is wise to separate the different decisions:

* Figure out financing on one day.
* Test -drive the car on other days. Make sure you do more than drive the car around the block. Drive the car in the conditions you would use it in. Drive in the dark as well as in daylight. Test -drive the car on a windy, rainy day. You cannot be too careful. Bring all the things you usually need in a car such as pet carriers and car seats. Make sure you feel comfortable with the vehicle under all these circumstances.
* Determine the best dealer on another day

Researching the style, model, and make of the car should protect you from buyer’s remorse; finding that you don’t like the performance of the car or that you can’t really afford it.

Financing 

Michelle Singletary, personal finance columnist says, “ If you can’t pay cash for it, you need to be asking yourself why you are buying this car. She suggests checking with your local bank or credit union before you go to the dealership.

Lindland of Kelley Blue Book says, “ Negotiate purchase price instead of the monthly payment. You can easily spend hundreds, even thousands of extra dollars by not paying attention to terms. Avoid car terms that are over 60 months.

According to Melinda Zabritski with Experian, the credit agency, “ Longer term loans help keep monthly payments low. But consumers should be very careful because it is easy to find yourself upside down…dealing with negative equity should they choose to trade it in after only a few years.”

Collegio of NADA’s organization has a guide for auto financing at autofinancing101.org. He advises that you get a rate from your local bank which the dealer can then match or meet.

Used Cars 

Used car buyers are often just as happy with their used car as new car buyers are with their new vehicle. The most important thing about buying a used car is that you know everything about the history of the car, including:

* The maintenance history of the car
* If the car was involved in an accident
* The number of previous owners
* Any previous mechanical problems

Whether used or new, getting a new car can be exciting and fun when you use wisdom, do your research, involve people you trust and don’t buy more than you can afford.

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