We all grow up looking forward and dreaming of the day we will buy our own car. It is something that is engraved in our mind and which more often than not holds a lot of importance to us. Technically speaking, we can say without any fear of contradiction that an investment in a car is the second most expensive endeavor that a person undertakes besides buying a home. With this in mind, it’s imperative that you make a wise decision lest you end up using a good chunk of your savings and get a raw deal. With that said, what are some of the tips that you can utilize to buy a used or new car?
Scrutinize your budget
Just like mobile phones, cars come in different designs, price ranges as well as customized functionality. In light of this, it’s essential for you to carefully scrutinize your budget and go for a car that meets not only your needs but also your tastes and preferences. The general rule of thumb is that you should be able to afford the car you endeavor to buy. The right estimate or sound investment decision would be not allocate more than 25% of all your monthly household income. The amount should be sufficient to cover an auto loan while ensuring that you do not get into bad debt.
Narrow down the list of cars you wish to buy
Chances are that you already have a rough idea of the cars you wish to buy. While driving around, you might have spotted a number of cars or been recommended some cars you should consider buying. Narrow down the list by looking at the car features, fuel efficiency, price and any other factor you feel will help you get the car you yearn for at the budget you have. Don’t make a rash decision but rather take time to acquaint yourself with the features of the car among other important factors before you make the final decision.
Make a decision based on your budget as to whether you wish to lease, buy a used or brand new car
Based on your budget, weigh the advantages and disadvantages of buying a used car, a brand new car or the lease route. While leasing might get you a brand new high end car, the fact that you don’t fully own the car or are restricted with the leasing regulations will be a major disadvantage. On the other hand, you might get a used car at a competitive rate but you will be disadvantaged in the sense that you will have to pay high interest rates, the warranty will be slightly shorter and in certain circumstances, you won’t be privy to the vehicles full history. It is therefore important that you weigh all these merits and demerits before you make the final decision to buy a car.
Work on the financing option
If you don’t have the total amount upfront, you might consider car financing. In essence, car dealers might not be that interested to sell you a car on cash basis but would rather prefer to sell it to you on loan as they end up getting attractive kickbacks in terms of a flat fee or a commission. Do not be surprised if your car dealer proposes attractive interests if you wish to buy the car on loan. Before you settle on dealer car loans, make sure you make a comparison with what a bank or credit union offers so as to make an informed decision as regards financing.
Most of the time, you might be tempted to rush into test driving as a result of the tempting promotions from various car dealers. Do not make that mistake. Put your negotiation skills to test especially if you wish to trade in your old car and buy a brand new car. After all, it won’t hurt saving a few bucks if you negotiate from an informed perspective. Do your homework well and you won’t regret when it comes to buying a car!