A lot goes into buying a car. You just can’t walk on a car lot, find a car, and drive off! Although the thought of doing that seems amazing, unfortunately there are a few things you need to know when buying a car regardless if it’s new or used. The CGS team has come up with some need-to-know items to help you when you find yourself ready to purchase your next set of wheels.
Leasing vs. Owning
When it comes to shopping around for a new car, you need to consider all of your options. Buying a car outright may not be as lucrative for your situation as leasing. Make sure you understand the pros and cons of owning and leasing your car before making any big decisions. If you are contemplating the benefits of leasing versus buying outright, check out the article Leasing vs. Owning: Know Your Options.
Know Your Limits
Before even considering buying (or leasing) a car, you need to understand your limits. How much can you truly afford right now? Does your situation allow for a car payment? If not, will you have to buy a used car outright?
Not only will you have to deal with the potential car payment, but also all of the costs that come with owning a car. These costs include insurance, gas, maintenance and more. Knowing where you stand financially and what you can afford will make your search much smoother.
Shop Around for a Loan
If you know that you will need financing to help pay for your new ride, shop around different banks and lenders for auto loan interest rates. The dealership will be more than happy to help finance you, but it may cost more than a traditional bank. Do your research and genuine due diligence to make sure you are offered the best interest rate and term when financing.
Don’t Jump the Gun
When you’re purchasing a car, you never want to rush (or be rushed) into making a decision. If you find yourself hesitant at the dealership, politely excuse yourself. The car salesmen are there to make money, even if you are not 100% on board. If you are shopping around for a used car, check out multiple shops and dealerships.
Most brand name dealerships have a large variety of used cars from other brands as well. Your goal should be to feel completely confident in your final choice.
Guess what girl? That price on the sticker of the shiny new car you want could be up to $5,000 higher than what the dealership actually paid for it! That’s right, most vehicles are marked up in price so that the dealership can make more money (in the chance you don’t negotiate) and still make some profit, in the chance you do.
Research the dealer invoice price for the car you want, then go in ready to negotiate. Avoid paying over 5% of the dealer invoice price. Don’t worry about making anyone feel bad; the dealership will be happy to sell the car even if it’s not for the highest profit.
Related: 4 Ways to Lower Your Auto Insurance Premium
Buying a car is a big deal, so make sure you take your time and don’t rush into anything you will regret in the future! We look forward to hearing from all of our readers! Share with us the time you got your car; what tips could you share about the experience? Leave a comment below and let’s discuss!
2 thoughts on “What You Need to Know When Buying a Car”
I’ve been fortunate enough to have my most recent car as a college present, but it’s now almost 8 years old. I’m going to start planning for a new car and this was some great stuff to think about. Anyone have any other advice?
I have never bought my own car, but I am interested in buying a new car within the next year. I have been hesitant to go to the dealerships because I know how aggressive car salesman can be. I have a narrowed down my car choices but now I need to figure out what I’m willing to pay and do my research.