6 Questions To Ask Yourself When Shopping For A Car
Buying a car, whether new or used, can be a daunting task perhaps one of the most important financial choices youll make during your lifetime
. Before you jump into a big purchase like this, do your research and make sure its something youre ready for. The following are a few of the most important questions you can ask yourself and the dealership when considering the purchase of a new car:
Do I really need a new car?
Sure, a new car would be nice to have you wont have to put up with constant repairs, and can be proud of the vehicle youre driving around town. But, purchasing a new car is a big investment. Ask yourself why you really want a new car. Has your family outgrown your current vehicle? Are the repairs on your vechile adding up quickly, making it not worth the cost? Do you need something more fuel efficient? Before diving into the costs associated with a new car, make sure youre asking yourself these questions.
What features are important to me?
With the advancements in technology in todays society, there are endless options in the features you can get for your car, depending on how much you want to spend. Before youre able to narrow down your options for a new car, make a list of the features that are important to you. Consider things questions like:
Does my ideal vehicle get good gas mileage?
Is there enough space to fit my entire family? Or, if youre into recreation or sports, ask - Does it have enough space to carry my gear?
Is it ideal for the area I live in? If you live in the mountains or an area that gets a lot of snow during the winter, you may need something with four-wheel drive so you can travel without worry.
Does it have a high safety rating? Check the cars safety ratings to see what professionals and consumers are saying. All cars are given a safety rating based on their real-world handling ability and crash prevention technologies. Aside from private organizations, you can usually find a reliable rating from the National Highway Traffic Safety Administration, or NHTSA.
Are there extra features that are really important to me? This may include things like a CD or DVD player, mp3 connectivity, a sunroof, spoiler, etc.
Should I buy used or new?
New versus used can play a big factor in the costs associated with a new car. If you cant afford a new one, consider a pre-owned option so you dont break your budget. Many times, you can find reasonably priced pre-owned cars that are just a couple years old and have the same features as brand-new ones.
However, buying a new car can have many benefits as well, because you probably wont have to worry about as many repairs. Not only is the new car less likely to have problems, but the warranty that comes with a new car usually covers any major repairs that are needed with the first one to two years.
How much do I want to spend?
Setting a budget is a big factor in buying a new car. This will help you know from the beginning what you can and cant afford, and will help you narrow down your choices because some may simply not be in your price range. By now, you shouldve set aside some money that you can use as a down payment from there, determine what you can afford for monthly payments aside from your regular bills like rent, utilities, Internet, etc.
How is my credit?
If youre buying a new car, its likely you wont be able to pay cash for the entire purchase, which means youll have to get a car loan. Regardless of which type of financing you get, the company will check your credit history. In general, the better your credit, the larger the loan and lower the interest rate. If you have bad credit, youll likely get quoted a high interest rate and lower loan amount.
Before you begin shopping, check your credit score. If possible, pay off outstanding credit card bills and make sure all bills are current. This will improve your chances of getting a good loan with reasonable interest rates.
How should I finance the purchase?
When purchasing a car, there are several financing options available to you. You can get approved for an auto loan through your bank or credit union or take out a home equity loan (if you own a home). If youre purchasing new, you can usually get financing through the dealership or car company as well. Heres what each means:
Get pre-approved for an auto loan Check with your bank or credit union to see if you can get pre-approved for an auto loan. This will give you another option so youll have the freedom to choose which is a better deal when it comes right down to it.
Dealer financing This is definitely the most convenient option, but could cost you quite a bit more and is usually only available for new cars. Its likely the interest rate you get through the dealership is higher than what youd get at a bank, unless you get in on a good deal. Some companies offer low financing if you sign into a short-term lease. For example, you could get 4.9% financing on a five-year loan, but a lower 3.5% on one that lasts for three years.
Get a home equity loan If youre a homeowner, you may qualify for a home equity loan that allows you to borrow against the paid-up equity in your home. This is normally a lower interest rate because your house is used as security. And, you can deduct the interest from your income-tax bill.
by: Don Robinson
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