subject: New Rules Of Thumb For Car Shopping [print this page] The rules have changed when it comes to buying a car the smart way. Now there are definite pros and cons of leasing or buying a new or used car. Did you know that car loans today can be a percentage point or two lower when you buy a new car instead of a used one? Read on to better prepare yourself for walking on that car lot:
1. Loan shop first, car shop second. Why would you hand over all the power to the car salesman? If you come into the dealership with a loan approval that you are happy with, he'll have to really get competitive with his financing options in order to not only sell you the car, but to secure financing for you.
2. The benefits of leasing. If you are able to write off your monthly payment as a business expense, then by all means lease. Another scenario in which leasing isn't a bad idea is if you drive less than a thousand miles per month. Above that, you'll likely be writing a big check at the end of your lease to pay for each extra mile you've driven.
3. Should you buy a used car? To ensure that you get a car that will protect your passengers' safety, don't buy a car that's older than three years. Make sure that the one you drive off with is certified so that you know it has passed all manufacturer inspections and comes to you with an extended warranty. Also, remember to compare your loan terms to those of a new car to make sure that you are getting the best car for the money you spend.
4. Should you buy a new car? While there is absolutely nothing as great as "that new car smell" there are some things to consider when buying straight off the assembly line. For one thing, the first year for a new model doesn't always produce the best car. It's best to wait a year or two for manufacturers to work out the kinks. Consider the cost of ownership of the make you are interested in. How much will the insurance and gas cost? Does the brand hold its value? In other words, will you be able to recoup some of your investment when it comes time to trade it in or sell it down the road?
One silver lining in a bad economy is that the buyer holds more power than he usually does. Car dealers are happier than ever to see you walk through the door and will likely work with you to make sure that you get a good deal as long as you are prepared to ask for one.
