Buying a car is typically an inevitable purchase many of us have to make at some point in our life. New car excitement; unfortunately, is often balanced with the dread and stress of loans and dealerships.
There’s good news.
With a little prep work you can nearly eliminate the uncertainty you feel. Here are a few tips to help you lessen your stress, pay what you can afford, get the best deal and fall in love with your new set of wheels.
Find out what you can pay each month.
Take a look at your cost-of-living. Calculate what you spend on rent, food, insurance and what you would like to have in the way of “fun money.” What can you afford to pay for a car each month? This will include not only the car payment, but the insurance cost as well. Next, determine how long you want to make payments. Loan terms can be spread out from 36 to 72-months depending on how much money you put on the down payment, how much you are financing and what you can afford.
Figure out your cost of ownership.
Loan payments, insurance costs, gas, oil changes, maintenance costs and taxes should all be considered when calculating your monthly cost commitment. When you have better knowledge of where your money is going, you keep from being surprised in the long run.
Get pre-approved for your loan.
Don’t waste your time looking at cars you can’t afford. With a pre-approval you can focus on options within your price range.
Research your options. Keep an open mind. You may have your heart set on a $35,000 vehicle, but you can only afford to spend $10,000. Consider new and pre-owned options within your price range. Test drive several vehicles before you buy. You and your car will have a long relationship, you want to make sure it’s the right fit.
Get the negotiations out of the way.
You may hear conversations about how sitting through your first car deal can be daunting. Well, buying a car just got easier. There are free car buying services that allow you to shop online and avoid all the dealership negotiations and haggling ? often saving you money in the process. Simply, choose your make and model, pick the color, options/specifications and view all of the available incentives. The process is similar for used cars too. After you have decided on the car you are interested in, you get a certificate showing you the guaranteed price from a certified dealer. This includes the TrueCar® Price Curve which shows others have paid for the same vehicle. This information will help ensure you are getting a great deal.
Go finalize the deal.
At the dealership always review your contract details. Before signing, make sure you are comfortable with the terms. Ask the dealer to remove any add-on fees that you did not agree to.
Follow these steps and you will feel an overwhelming sense of pride knowing that you made smart choices, got the deal you deserve and did it completely on your own. Good luck.