I have made a lot of mistakes in my day – and one of the worst financial mistakes I’ve made is being desperate for a car and heading to a dealership ready to buy, without being informed.
Before you begin test driving, you should do your research not only on the type of vehicle you want to buy, but the smart way to go about buying it. If you go in smelling of desperation and cluelessness you will end up paying more for a vehicle than you should – which could haunt you for years to come.
There are a few simple steps you can take to educate yourself and make the best financial decision for yourself and your family.
Getting pre approved gives you an advantage – one you can compare the dealers interest rates to your pre-approval, and two, you’ll be able to focus on the sales price of the vehicle instead of just the monthly payment.
Most financial experts will tell you that your car payment shouldn’t exceed more than 15% of your take home pay – so figure that out before you start car shopping; I know sometimes its hard to resist that car you just really, really want but trust me – the newness wears off, but that car payment – that car payment is here to stay.
Determine Your Needs.
Trust me when you are in need of a vehicle, you aren’t always thinking clearly. You won’t remember how much you hated a 2 door, or that even though a vehicle may fit your family, it doesn’t leave much room for anything else. Make a MUST HAVE list and look at vehicles online that fit your needs before going and test driving a vehicle.
Take Advantage of Special Programs.
Most dealerships offer special programs that could highly benefit you when purchasing a new car. Some of these Special Programs include a military/veteran discount, builders/contracts discounts and allowances, farmers, realtors and more can get up to $500 or more cash allowance. Just be sure to look online or ask. Dealerships like Holden Dodge even offers up to $1,000 cash reimbursement for auto disability assistance to help reduce the cost of installing adaptive driver or passenger equipment on your new vehicle.
Find Out What It’s Really Going to Cost.
There is more to purchasing a car than just the car payment – you have to consider other factors such as gas, insurance (which can be a really big factor), fuel cost, taxes, maintenance and repairs. If you have your eye set on a specific make/model – get your final numbers before signing on the dotted line. Call your insurance company and get a quote, compare gas mileage to your current vehicle and how much you drive now, and find out if that particular model is prone to certain issues and price out any repairs and maintenance you may need.
Sleep on It.
Before making any definite decision – sleep on it. Get your final offer, copies of the paperwork, and make sure you have your ducks in a row before signing. Make sure no extras were added on , the interest rate and monthly payment were what you agreed to, and that everything lines up for what you want.
Buying a new car is a big decision, and you want to make sure that you are happy with your decision for the next 4 to 6 years!