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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.

Used cars are a much better value, because somebody else has already absorbed the initial depreciation. However, used cars can also be substantially less reliable. Since most people sell their cars when they start experiencing trouble, you may end up buying somebody else’s problems.

Don’t Get Taken for a Ride in a New Car

If you’re interested in buying a new car, you should try to get the best deal you possibly can. You take a massive financial hit the moment you drive it off the lot, so you should do anything you can to make the dealer absorb at least some of that. In order to get the best deal, you’ll need to enter the haggling process from a position of power.

The most powerful step you can take is to educate yourself before you start haggling. You’ll need to know as much as you can about the car you’re interested in, which includes information on how much similar models are selling for elsewhere. It also helps to have financing in place before you head down to the car lot. If you have your financing in place, you can confidently threaten to take your business elsewhere.

Don’t Buy Somebody Else’s Problems

Used cars are usually much better deals than new cars, but looks can be deceiving. If you’re buying a used vehicle from a car lot, you should never take the salesman’s word at face value. A lot of salesmen are perfectly honest, but there may be hidden problems that they aren’t even aware of. That’s why it’s vital to have an inspection performed before you purchase a used car. If the seller won’t allow you to have an inspection performed, that should immediately throw up a red flag.

If you have a mechanic that you trust, ask if he performs pre-purchase inspections. Mechanics are typically happy to offer this type of service for a nominal fee. The total expense will depend on the vehicle you’re interested in purchasing, but you can expect to pay for at least one hour of labor.

Prepare Yourself

Research is the key to finding the right car, but too many people head into the buying process without the necessary information. If you do the legwork before you ever set foot on a car lot, you stand an excellent chance of ending up with a vehicle that will last you for years to come. The Internet is an ideal source of information about any make or model that you might be interested in, and it’s also an indispensable tool for contacting finance companies. Buying a car can be a hectic process, but you’ll be fine if you arm yourself with all of the necessary information and knowledge.

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About sashalevin

  • 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.