5 Steps to buying a Car
5 Steps To Buying a Car
1. Do your Homework
· How much cash do you have?
· Financing- How is your credit?
· New or Used?
· Warranty desired?
· Insurance for the car?
· Expenses that come with the car- gas, tires, oil changes, fluid changes, and insurance maintenance, implications of driving record
Then finally ask Can I really afford this?
2. Research Vehicle and associated costs
When buying a car, it’s not just about how cool, or fast, or how great the gas mileage is of the vehicle. You are about to make a very large financial decision that can cause some financial issues if you are not well educated. So you need to obviously find a car you like, then DO YOUR HOMEWORK. Research what the safety record is of that vehicle, look into how much the cost to maintain the vehicle will run you (not just an oil change), and the insurance to even drive the car. This is your time to really look into what the car is ACTUALLY going to cost you, versus what the sticker price says at the dealership!
3. Financing 101
If you do not have cash to pay for the vehicle, then you will need to get a loan.
Here are a few options:
Dealership Financing-We have all heard the stories of walking into a dealership and leaving with a new car after spending only an hour. This is because car dealerships have in house money. In house money means, they are the bank and can lend you the money to buy the vehicle. Understand the dealership will charge you a higher interest rate then going to a credit union or a bank.
Bank/Credit Union Financing- This is a better option, but will most likely take more time because of the paper work involved. Banks and credit unions will want to see bank statements and pay stubs to approve the loan for your car.
4. The Search
The internet has been a game changer for people looking for vehicle, but remember it is not the only option. There are so many other avenues to research vehicles that can truly give you the information to make the right decision. Magazines, newspapers, and used car lots are some other ways to search for a car. Just remember, it isn’t just the car you should be searching for, but look at the benefits of USED verse NEW. Depreciation, warranty status, history of the vehicle are all things you should also be searching.
Do not accept the price that is listed as the end sales price. It’s important to negotiate the deal. By this time, you’ve researched vehicles and now have a good understanding of what it will cost you in other expenses, what comparable vehicles are going for, and you have done your homework.
Here are some helpful resources: