5 Tips to Buying the Car of Your Dreams
New or Used?
There’s no better feeling than purchasing a car you‘ve had your eye on, but your dream car could just as easily be a used vehicle in great condition than a brand new car hot off the assembly line. Perhaps you’d prefer an older model of your favorite make than a new model of a make you’re not that fond of.
After all, a used car will have more features at the same price point than a brand new car. But a brand new car will have a full warranty and lower interest rates.
The good news is that the 3-year lease market is booming, which means there is a comprehensive range of used vehicles of that age up for sale and certified as pre-owned (CPO). At such a young age these vehicles have no problems, while the savings are vast.
Because cars lose their value quickly, buying used is the wisest choice, but if you’re not paying upfront you will face higher interest rates on your car loan. You also won’t get to know the full history if it’s an older vehicle.
You might also consider leasing, which will give you access to cars you might not be able to afford to buy, but you’re likely to return it after a few years and it won’t be yours to own – which brings various rules and fines for breaking them.
Secure Car Financing First
Remember when you go to buy a car the dealer will try to arrange financing through them. This is because they get a commission for doing so, regardless of whether they’re partnered with the manufacturer or a third party lender. This means you won’t necessarily get the best terms.
To combat this apply for your car loan first (shopping around and finding the best terms and rates) and then compare this to what is offered at the dealership. If the financing you’ve found is better, you can go ahead and finalize everything. If the dealer has a better offer, then walk away from the offer and apply with the dealer.
Of course, even if the dealer offers a particularly low interest rate and this was part of the reason you were drawn to a certain car, doesn’t necessarily mean you will be approved for the loan. You’ll still be subject to a credit check and it’s actually quite rare to get approved for the zero percent on low interest rates offered by dealers. These promotional rates are often just to entice ignorant customers.
If you have bad credit you’ll struggle to get traditional car financing, but you could still get an emergency loan online to help cover the upfront cost of a cheaper used car.
Find Incentives and Deals
Incentives and deals certainly exist when you buy a car but you often won’t hear about the best deals from the dealer themselves. Instead, you’ll want to check out third-party sources like Kelley Blue Book or Edmunds, who maintain lists of the latest discounts from the automakers themselves and some dealerships.
These can vary greatly and it’s a bit of pot luck, but you might get cash back, special discounts if you belong to certain groups (recent college graduates, veterans etc), or better financing rates through the automaker. You might also find free gifts like iPads and other electronics.
If you’ve exhausted these deals then it’s time to see what the dealership offers.
Don’t Forget to Test Drive Thoroughly
Whether you’re in a rush or are simply blown away by the deal or the vehicle’s specs, don’t ever forget to go on a test drive. You may have been in love with the car for months, but until you actually take it out on the road you will never truly know if it’s suitable for you. And with used cars, there may be unforeseen problems that make themselves known when driving.
You should always take your time with a test drive and try to give the car a full once-over before making your final decision. That means pushing all the buttons and controls, adjusting the seats to see if you can find adequate comfort, and making sure you’ve experienced a few different driving situations on the road. Don’t speed, but certainly give the acceleration some time.
How Much Will It Cost To Run?
The cost of your dream vehicle and/or its financing is one thing, but cars also cost to own and run and this should also be taken into account before you commit. You can easily find general ownership costs online but you might also want to do your own fuel cost calculations based on your average yearly miles.
You will also need to get an insurance quote, which can vary greatly depending on the vehicle and whether you include any additional drivers on the policy.