Although advances in technology have dramatically changed the way cars are manufactured and how they perform, the process of car shopping is still pretty much the same. And after decades of trial and error, consumers have a more than a few tried and true tips for buying a new car.
The process of buying a new car can seem intimidating, but there are actually several advantages of buying a new car. Developing a plan of action for buying a new car and help you take full advantage of all the awesome benefits of owning a brand spankin’ new car.
Not sure where to start? No worries! Check out these good old fashioned tips for buying a new car!
Budget basics
Before you set your eyes and heart on a specific make or model, make sure you have financial resources available to own it and maintain it. As a very general rule of thumb, you shouldn’t spend any more than 25% of your monthly household income on a vehicle, including both new and used cars. This percentage should include your monthly payment, vehicle maintenance, car insurance, and fuel costs.
Financing
Before you even visit car dealerships, you should know exactly what your budget is, what your credit score is, and what your finance options are. You have seen flashy advertisements that lure you in with zero percent interest rates, but only a handful of car buyers actually qualify for these deals. To find the best deal on an auto loan, visit your local bank or credit union before obtaining financing at a community auto dealer. Your local bank or community credit union is more likely to offer you a better rate on your loan, and you may find their repayment options a bit more flexible.
Do your homework
This may seem like a no brainer, but it’s one of the best tried and true tips for buying a new car. Never make an emotional or sentimental decision when it comes to buying a new car, as not all makes and models are created equal. Some models may have a lower cost up front, however their long term cost of ownership is quite high. On the other hand, some models that are known for their reliability and durability may come with a higher price tag, but the investment will pay for itself in the long run. It’s best to choose models that will cost roughly 5% less than your monthly budget, and be sure to give yourself some financial wiggle room for operating costs like fuel, insurance coverage, and maintenance.