Tips for Buying a New Car
Wednesday, 22 January 2020
Looking into buying a new car? Woo! What an exciting time! Whether this is your first car or your 4th, there are some things to watch out for when shopping that you might not have ever thought of. You may know the type of car you like, or you know the exact make, model and year, both of which are great places to start. The car buying process can be fun and exciting for the most part and getting a great deal on a car you love makes it even better! Keep reading for some tips for buying a new car so you will be more likely to get that deal and walk away with the keys to a shiny new car!
Do your Research
Doing research will help you narrow down exactly what car you’re looking at buying. You can find out almost anything about a car just by looking online, while figuring out what features and options you like and don’t like. While you’re searching online using our tips for buying a new car, you can also read reviews on the cars you are interested in to see how other people enjoy them and get information on common problems with specific cars. Look for a car’s fuel economy, safety features, size and ultimately, price. Once you narrow down which makes and models you like, you can look into the prices of each at different dealerships to compare. Also, investigate similar cars that you would like to consider as well. Knowledge is power, so don’t go into a dealership blindly without researching first.
Get a Pre-Approved Financing Quote
Often, interest rates at dealerships are higher than those at banks and credit unions. Before you go into a dealership to sign the papers for a car that you love, go to a bank and obtain a quote for a car loan. If you take this quote to the dealership, you can use it as leverage to try to get a lower interest rate from the dealer. Getting a pre-approved quote can give you insight on what you can afford, so use this information wisely while shopping for a car.
Take your time
Unless you’re getting a once-in-a-lifetime deal on a brand-new car, take your time! One of the main tips for buying a new car is there's no need to rush into it. Take time to shop around, at different dealerships, test driving different cars, and narrowing your scope on one or two different vehicles. It sounds obvious to say, but make sure you really love the car you are about to buy. If you don’t love it when you see it at the dealership, you’re not going to love it 3 months down the road (pun intended).
Negotiate! And Don’t be Afraid to Walk Away
It is important to show the salespeople that you are not going to take the first deal that is offered. Have the confidence to negotiate the terms of the sale. Before you do this, however, make sure you know the vehicles value and factors that can impact the value. Some dealers might offer you their lowest price right away, others you may have to walk away to know their rock bottom price.
Know the Value of your Trade-in
If you are planning to trade-in your old vehicle, start by finding out the value of it. You can look online for a range of value based on the vehicle, mileage, condition and how old it is. Knowing how much it is worth before going to the dealership will help prevent the dealer from valuing it less than it is worth. Additionally, resist the temptation to spruce it up before trading it in. When you go into a dealership with the vehicle detailed, it makes it seem like you are prepared to buy a new vehicle that day. There is no need to fix minor things on the car before trading it because most of the time, the dealership can fix it for a lot cheaper if it is something minor. Lastly, do not mention it to the dealer until the end of the buying process incase of the dealer using this information against you when looking into price of a new vehicle.
Always Test Drive
Test driving a car will give you more insight than all the research in the world. Comfort should be a priority when test driving, if you’re not comfortable now, you won’t be later. If you have children that will be passengers daily, bring them as well, along with their car seats and any large items you carry frequently to make sure everything fits. Pay attention to the sound of the car when accelerating and braking. Try out the air conditioning, signals and windshield wipers, making sure that everything functions properly. When actually driving the car, drive it like you own it. Ask the dealer to take it on a route you take daily such as to work or school so there are no surprises when you own it.
Know your Budget
Another one of our tips for buying a new car is try not to focus on the monthly payment, rather focus on the total price of the vehicle. With that being said, consider your monthly expenses before going into the dealership and know where a new car fits in, because you don’t want to be stuck with a car you cannot afford. Our Director of Life & Financial, Michael Wills, recommends spending no more than 8-10% of your monthly income on your monthly car payment. It is also important to know how much you can pay upfront without being left with nothing in your account. With buying a new car, budget any increases in fuel or maintenance as well because these are usually different with each vehicle. For example, if you are going from a small sedan to a large SUV, the price it is to fill the tank will most likely be more expensive.
Think about Insurance
In your budget, you should consider the change in your insurance premium as well. You may need more coverage than you had on your own vehicle, or the new one could just be more expensive to insure. These are things you want to figure out before you buy the vehicle! Talk to an insurance broker before making your final decision, because your insurance could impact that choice. Let us know if you have any concerns on a new vehicle you want to insure, or if you are just starting to look for a new car see our blog post on the Cheapest Cars to Insure.