While the activity of buying a new car is one of the more exciting periods in your life, it can easily become one of the most daunting experiences and expensive when you do not follow some simple rules of car buying. There is some hope though, because there are plenty of resources available to you, and you can get the best car that works for your budget.
At the core of buying a car is the fact that it is still a business transaction. It also happens to be among the few purchasing experiences that give you a chance to bargain for the best deal – so the less the emotional arguments and tone you bring into it, the better the results you will get.
It is therefore essential to know how to navigate the process, whether you are buying a used car or a brand new one, and we will explain some of the things to keep in mind.
Make sure you do your research
Any buyer will do well to make information their best friend, or asking around if trusted friends and family know any dealers they can trust. The good news is that there are plenty of sites where you can find all the information you need, for example you can check out Motorbeast for information on cars as well as reviews.
These sites need to inform you about various car specs, such as how newer cars compare to other contemporaries in their class, or how they fare in terms of reliability and performance. Looking to the internet will give you plenty of information, such as the price the dealers pay for the car model, the value of the trade-ins you have, and what other customers are paying for the same car.
Before going to a dealership, a smart buyer will always do their homework, as well as knowing the car they want and the price they want for it.
Avoid going to dealerships when you do not have a financing order
The car dealers of today will always make their revenues in their financing offices, through getting a cut of the auto loans that a buyer accepts. While they may present great deals to you, these deals might not be the best for your budget and goals – instead, they will be the best chances for dealers to make money.
Before you think of visiting a dealership, ensure you get pre-approved financing offers from your credit union or bank. In this way, the dealer will give you a better deal that works for you. Otherwise, if there is no deal, the dealer will not have any incentive to work hard and earn you as a valued client.
Always talk to your insurance agent before buying a car
Different car models will have different insurance rates, so it is always a good idea to have a talk with your insurance agent, and see what offer is available before buying the car. The insurance company will have many of the same products that the dealership office has, such as vehicle service contracts. The only difference is that the dealer will have more affordable options compared to the insurance company, but it is always good to check first.
Never start conversations with the dealer saying you will pay cash
While it sounds great to pay cash for a car, never disclose to the dealer that you are planning on doing so. Because the dealer makes much of their revenue through financing, they will be less inclined to give you a good deal when they know they will not make money from your car loan.
The best thing to do first is negotiating the purchase price, then telling them you have not settled on financing the car yet. On the other hand, the dealer might get you a great zero percent financing deal, which can help you save your money.
Go to a dealership when you know your credit score and budget
Before deciding to go to a dealership, it is always important to know the amounts you can afford each month, as well as the deposit you can pay up front. Otherwise, you will go into the deal blind, and the dealer might take advantage of that – or you end up paying more than you can afford.
As a buyer, you will need to know more aspects and factor them into the buying equation – not just the price of the car. For instance, know the maintenance costs, fueling, and insurance, and add them into the price as a part of the research process.
Other than that, knowing the credit score you have is important, as you can use it to help you get the best deals available. Cash back deals and new car financing will only work for you if you have a top credit score, so make sure you amend any credit blemishes if you want to get the best deals for your money.
Do not just look at the monthly payments
This is a common mistake many buyers make, since they will only focus on monthly payments. However, this is a bad idea if you are purchasing a new car – instead, examine additional factors such as extra fees you will pay for servicing the loan, interest payments, and the total costs.
The bad thing about solely focusing on monthly payments is that it will tend to entice a buyer into unnecessary add-ons, or getting overpriced fees. If you want to know the total costs of a car, multiply the number of months you will pay by the monthly amount, then add the deposit you will make, as well as any fees and taxes.
Always divide the transaction into components
Speaking of looking at multiple fees you will need to factor in, make sure you are never confused about the amounts you will pay – the dealer might easily take advantage of that without you knowing. They can also undervalue your purchase, or charge you more than you are supposed to pay.
Having knowledge and patience when buying a new car are your best friends when you want to get a good deal. Make sure you do your research as much as you can, and do not just settle for less because it is a significant investment you are making.