The very first thing that you must understand before venturing off car shopping, is that you must take some time to do your homework and educate yourself. And unlike not too many years ago, before so much information was readily available on the internet, today this task is really easy to do.
In this day and age a car is no longer a luxury, but a necessity with our fast paced life and growing families. You will likely have to purchase a new car more than once in your life, for you or for your beloved one so you might as well learn to do it in a way that will make buying the cars less painful.
#1 Budget: Before you do anything either research your current budget or create a new one. This is the basis of success or failure over the next 3-5 years based on the term of your new vehicle loan agreement. Know where you are and what you will be able to pay in the worst case scenario.
#2 Need: Consider the vehicle that you most need to complete your obligations to your family and yourself. Do this for the life of the loan that you will be repaying on the vehicle. Thousands of people purchase the WRONG
VEHICLE every day, and then trade early to fit their need and LOSE a LOT of MONEY. Think it through.
* Determine your need
* Select vehicles that make sense for you
* Narrow the choices to three
* Compare: Fuel mileage; Safety attributes; Real cost to own in dollars
during the warranty period and after the warranty expires; Vehicle value at
the end of the loan in real dollars; Price to value-what are you getting in
vehicle value based on the dollars spent; compare standard equipment;
compare factory warranty.
#4 Credit information: Gather up your credit information from all 3 bureaus, know where you
stand, know what rates are available to you.
#5 Interest rates: Research current interest rates for the type of vehicle you are buying and
the term you will finance for.
#6 Financing: Arrange financing with a credit union, your bank, or even online with a
reputable lender, compare term and rates.
#7 Dealer reputation: Research the dealer reputation for sales and service. Use the BBB, friends,
and online information. Even if not a great reputation you may still do business there, just let them know up front what you expect, NO NONSENSE IN THE DEAL, GOOD SERVICE.
#8 USED or NEW: Consider USED vs. NEW. You may be able to accomplish your objective by
buying used and save thousands of dollars. However, consider all aspects of the deal and compare both the new and used to determine the total dollars upfront, and the end cost.
#9 Leasing: Consider a lease. Leasing is good business, but not for everyone. Do lease research and then compare a lease deal with a purchase, you might save hundreds, possibly thousands of dollars.
#10 ADD-ON Stuffs: After the deal, beware of the “ADD-ON” stuff. Car care kits! Extended warranties. Options and option upgrades. Accessories; tires/wheels/moonroofs; music systems, and on and on and on. In thirty minutes with a greedy F&I person (some are) you could spend several thousand dollars on stuff, pay too much interest, and increase your amount to repay by thousands of dollars. Know what you want and walk away if being “sold” beyond that.
#11 If you are trading a vehicle do all the research on the VALUE so you know where you stand in true dollars based on the dealer’s dollar value. Trade dollars vary, but having a baseline allows you to be in the ballpark and gives you a reasonable snapshot of where you should be.
#12 Shop more than one dealer and compare the deals. Be sure and compare equipment, model, trade value, and price. Buy local if possible, there are mutual benefits for you, the dealer, and the community.
#13 Research the factory incentives across the board with the manufacturers, there may be a healthy amount from one to far better your deal.