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Buying a Car? Here’s What You Need to Know

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Buying a car is one of the biggest purchases most people make, and it’s an incredibly complex process. The options can be daunting, so it’s vital to narrow down your choices to cars that will fit into your lifestyle. You’ll also need to decide between a used or a new car, and financing can be a bear regardless of your other choices. The process of buying a new car can be either fun or hectic, but you can do a lot to skew it toward the fun side by preparing yourself.

Select Your Style

It’s not uncommon to suffer from information overload when you start looking for a new car. The sheer number of different makes and models can be overwhelming, so start off by thinking about the type of style that’s best suited to your needs. If you want a sporty car and don’t care about cargo space, you might want to concentrate on coupes. Sedans typically offer more passenger and cargo space, and a hatchback or a wagon can be a terrific choice if you have a small family.

Minivans and sport utility vehicles typically get worse gas mileage than smaller cars, but they’re also better suited to larger families. If you have to ferry around a lot of kids, a minivan is usually going to be your best bet. You can also consider a pickup truck that has an extended cab if you need to carry a lot of gear.

After you’ve settled on a style, you can narrow your choices even further by investigating specific makes and models. You can start off by looking at safety ratings, fuel efficiency, and other features, but also pay some attention to the way each model looks and feels. After you’ve settled on a handful of makes and models, you should head out and test drive them. Buying a car is a significant investment, so you should make sure that you don’t end up with a vehicle that you can’t stand to drive or hate to look at.

Money Matters

The next step is to take a look at your finances. Cars depreciate in value with remarkable speed, so they aren’t good investments. If at all possible, you should try to pay cash when you buy a car. That isn’t always viable, which is why it’s critical to investigate all of your financial options.

Many car dealers offer financing, and the rest work with third party financing companies. If you head to a car lot without financing in place, it’s a safe bet that a salesman will be able to find you a loan, the interest on which will be used to pay for much of the dealership’s overhead, such as auto bonds, real estate, salaries, etc., so the terms usually won’t be that attractive. In most cases, you’ll be able to find better financing elsewhere. Your bank is a terrific place to start, but you should also check to see if you’re eligible to join a credit union. These financial institutions are similar to banks, but they typically offer interest rates that are much more attractive.

Leasing is the other option, and there are some circumstances in which leasing a car makes sense. It’s typically much more expensive to lease a car than to buy one, because you don’t own the vehicle at the end of the lease. That is attractive to some people, because it means they can simply walk away and lease a brand new car when the term is over.

Used vs. New

New cars are more reliable than used cars, but they also lose value incredibly fast. The moment you drive a new car off the lot, it drops in value by about 10 percent. Over the next five years, it will lose between 15 and 25 percent of its value every 12 months. If you plan on selling your new car in a few years, you’ll end up losing a whole lot of money.

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  • Dr Joseph S Maresca

    I would do the following when buying a new car:

    (1) Bring the mechanic that will fix the car.

    (2) Check the Consumers Reports.

    (3) Talk to drivers on the road who are driving the car you plan to buy.

    (4) Research pricing on the internet and on auction sites.

    (5) Never buy a car that can’t be repaired easily. So, speak to your mechanic. I once looked at a car with a huge infrastructure of hoses across the top of the motor. It cost nearly $300 or more just to access the plugs.