Tips On Buying A New Vehicle
But many Americans make big mistakes buying cars. Take new car purchases with a trade-in. A third of buyers roll over an average of $5,000 in debt from their last car into their new loan. They're paying for a car they don't drive anymore. Ouch! That is not a winning personal finance strategy.
tips on buying a new vehicle
"The single best advice I can give to people is to get preapproved for a car loan from your bank, a credit union or an online lender," says Philip Reed. He's the autos editor at the personal finance site NerdWallet. He also worked undercover at an auto dealership to learn the secrets of the business when he worked for the car-buying site Edmunds.com. So Reed is going to pull back the curtain on the car-buying game.
So Reed says having that preapproval can be a valuable card to have in your hand in the car-buying game. It can help you negotiate a better rate. "The preapproval will act as a bargaining chip," he says. "If you're preapproved at 4.5%, the dealer says, 'Hey, you know, I can get you 3.5. Would you be interested?' And it's a good idea to take it, but make sure all of the terms, meaning the down payment and the length of the loan, remain the same."
So at the dealership, Reed and Van Alst both say, the first step is to start with the price of the vehicle you are buying. The salesperson at the dealership will often want to know if you're planning to trade in another car and whether you're also looking to get a loan through the dealership. Reed says don't answer those questions! That makes the game too complicated, and you're playing against pros. If you negotiate a really good purchase price on the car, they might jack up the interest rate to make extra money on you that way or lowball you on your trade-in. They can juggle all those factors in their head at once. You don't want to. Keep it simple. One thing at a time.
"Concerning the extended factory warranty, you can always buy it later," says Reed. "So if you're buying a new car, you can buy it in three years from now, just before it goes out of warranty." At that point, if you want the extended warranty, he says, you should call several dealerships and ask for the best price each can offer. That way, he says, you're not rolling the cost into your car loan and paying interest on a service you wouldn't even use for three years because you're still covered by the new car's warranty.
"We're actually living in a golden age of used cars," says Reed. "I mean, the reliability of used cars is remarkable these days." Reed says there is an endless river of cars coming off three-year leases that are in very good shape. And even cars that are older than that, he says, are definitely worth considering. "You know, people are buying good used cars at a hundred-thousand miles and driving them for another hundred-thousand miles," says Reed. "So I'm a big fan of buying a used car as a way to save money."
NPR has a personal finance Facebook group called Your Money and Your Life. And we asked group members about car buying. Many said they were shocked by how much money some other people in the group said they were spending on cars. Patricia and Dean Raeker from Minneapolis wrote, "40 years of owning vehicles and our total transportation purchases don't even add up to the cost of one of the financed ones these folks are talking about."
Car insurance costs are based, in part, on the model's safety history, the cost of vehicle repair or replacement, and the likelihood that the car will be stolen. Many insurers offer discounts for vehicles with features that reduce the risk of accidents and injuries.
Your insurance rates typically change when you acquire a new vehicle. Before you choose a model, the nonprofit Insurance Information Institute recommends that you ask your insurance rep how much it will cost to insure.1
Design characteristics are important when choosing a new car. Larger and heavier vehicles typically sustain less damage in auto crashes than small cars. Some small utility vehicles and pickups are prone to rollover accidents.
In addition to considering size, look for cars that have crashworthy" designs. These cars have strong safety cages," the section of the vehicle that protects the occupants. Make sure that the front and rear ends are crush zones" that can absorb the impact of crashes.
Sources:1 -can-i-save-money-auto-insurance2 -buying/10-steps-to-buying-a-new-car.html3 -secrets-getting-the-best-deal-new-car4 -shopping/buying-a-car-why-you-shouldnt-focus-on-the-monthly-payment-242019
Buying a brand new car today requires some additional considerations. New vehicle average transaction prices (ATPs) hit record highs, above $48,000, for the fifth straight month in August of 2022, according to Kelley Blue Book. The high prices you will likely be met with are caused by a simple issue of supply versus demand.
With less vehicles available on car lots, due to lingering supply chain issues, and drivers still needing vehicles, prices are higher. On top of supply and demand, choices from the Federal Reserve to quell inflation has made the cost to borrow higher too. This increase is reflected clearly in the amount drivers are financing, an average of $40,290 in the second quarter of 2022 versus $35,587 in 2021, according to Experian.
If you're looking to find the right car for you, these tips for buying a new car may be helpful. The goal is to find one that not only fits your lifestyle but also your budget. Whether it's a fuel-efficient commuter car, a rugged off-road SUV, or a luxury sedan, here are a few tips for buying a new car.
Once you narrow down what you want in a car, do your research to figure out which cars are most likely to fit your needs. For instance, how many seats you need? Is a certain amount of cargo space important to you? Is your ideal vehicle gas, electric, or hybrid? Knowing what you want can help you quickly cross some cars right off the list of contenders. Knowing your budget can further refine that list. Spend extra time researching your favorites to be sure you can get what you want at a price you want before you start shopping.
No matter how good a car looks on paper, you need to drive it to know if it's right for you. Schedule a test-drive when you have plenty of time to carefully consider the car you're thinking of buying. Make sure the drive includes the kinds of driving you do in a typical day, whether that's cruising the highway or managing downtown traffic.
If you have kids, bring them and their car seats with you so you can see that everything fits the way you expect. Take a good look at the cargo room, the ease of moving seats in SUVs and minivans, and interior storage. Make sure the ride is comfortable, you can see well, and you can park easily, especially if you're considering a large vehicle.
Never be pressured into buying a car before you're absolutely positive it's the right car for you. Consider sleeping on it before you make a final decision because the car will likely be there in the morning. If it's not, a good dealership, whether online or in person, will help you find another car that's right for you.
If you're buying a vehicle with less than 7,500 miles, make sure it meets these standards. Ask the seller or check the Vehicle Emissions Control Information (VECI) label in the engine compartment. If it shows the vehicle is certified for California emission standards, for sale in all 50 states, or for sale in the northeast, you may register it in Washington.
A curbstoner is a person who makes money from buying used vehicles and reselling them. They're unlicensed dealers who don't comply with state or federal laws. You have no legal protection when dealing with them.
The Washington State Motor Vehicle Lemon Law is designed to help people who have ongoing problems with their new vehicle warranty repairs. See the Motor Vehicle Lemon Law (atg.wa.gov) on the Office of the Attorney General's site.
Make sure all the features you want are listed on the order and pay attention to any extras or fees. The dealer may offer you extras such as rustproofing, fabric protection, and paint sealant. Make sure you weigh the added expense for such items against their necessity. Dealer preparation fees, such as for cleaning the car before you pick it up, may also be charged. Check the window sticker of the car. If the fine print reads, \"Total vehicle price includes manufacturer's recommended pre-delivery service,\" or \"Manufacturer's suggested retail price of this model includes dealer preparation,\" the preparation fees have already been charged. A document preparation fee may also be charged. Remember, this may not be a mandatory fee and may be considered part of the negotiable final price.
Make sure all the features you want are listed on the order and pay attention to any extras or fees. The dealer may offer you extras such as rustproofing, fabric protection, and paint sealant. Make sure you weigh the added expense for such items against their necessity. Dealer preparation fees, such as for cleaning the car before you pick it up, may also be charged. Check the window sticker of the car. If the fine print reads, "Total vehicle price includes manufacturer's recommended pre-delivery service," or "Manufacturer's suggested retail price of this model includes dealer preparation," the preparation fees have already been charged. A document preparation fee may also be charged. Remember, this may not be a mandatory fee and may be considered part of the negotiable final price.
At CARFAX, we collect events from the lives of millions of used cars from 20 European countries, as well as the USA and Canada. We can then create a vehicle history for every car in our database and make it available to you.The information helps you to check sales data, avoid expensive follow-up costs and negotiate a fair purchase price.
Look at your recent bank statements and monthly bills to determine how much you can afford. Be sure to account for ongoing costs of vehicle ownership, like maintenance and gas. Some vehicles require premium fuel, which will cost you more every time you fill up. If you choose a vehicle that has expensive parts, it may cost more to repair in the future. Make sure you can afford the car you choose throughout its lifetime. 041b061a72