Do you need a car? Owning a car is essential to your daily life. Public transportation in America is an absolute disaster. Traveling by car is still the best way to go to work, school, and go to a variety of different places.
But there’s an issue with car ownership: the car buying process. There’s a reason we tell car salesman jokes.
They need to make their commission and up-charge on car sales or pressure you into buying a car. It’s easy to get jipped and spend more than you should or get a car you don’t want.
Whether you’re buying new or used, here are 6 things to know when buying a car.
1. New or Used?
Before even walking into a dealership, know if you want to buy a new or a used car. There are many factors to keep in mind, the two most important is price and value.
As a rule, used cars are typically cheaper. That’s because a car’s value goes down significantly when you buy a car. But sometimes used cars come at a price. They may have errors and may require maintenance.
A new car ensures the car is in tip-top shape. You’ll pay more, but you won’t have to worry about repairs or even maintenance for several miles.
What if you decide to sell your car down the line? You will likely not get every penny back that you spent.
Car depreciation is an ugly thing; a car’s value decreases by 20% in the first year of ownership and continues to drop every year you own it.
Unless you run the car to the ground, you could lose money.
2. Own or Lease?
The next factor you have to determine is if you want to lease or own your car.
Owning a car is the most convenient option, but one many car owners don’t choose. You need the cash up-front during the car sale. If you’re buying a used car, this isn’t a terribly expensive price. The average used car sells for $10,000.
This is a steep price and view people have 10k worth of cash. But if you have the spare money, owning the car prevents leasing a car.
Since few people have thousands of dollars set aside for a car, many car owners choose to lease a car.
You pay a monthly payment that includes interest. The interest depends on your credit score. This also makes leasing a popular option for those with good credit scores and those who need to improve their credit.
Car loans have a maturity date, which usually lasts a few years after your car’s purchase. From here, you either paid your car off or you pay back what is owed.
3. Set a Budget
When you decide if you want a new or used car or to lease or own, you have to set a budget. Your budget should be realistic; your dream car may be more expensive than you imagine and the car may need some repairs.
Rather than set a specific price, set a range. This should reflect the type of car you want, a specific make or model, and if you want new or used.
Let’s say you want a new car and you would rather drive a smaller car. The average price is about $20,000.
But set a range. Save a little more and budget to spend between $20,000 and $30,000 on a car. This way, you’re confident you can afford a car you truly want.
4. Don’t Forget to Budget Additional Costs
Buying the car isn’t the only money that will go toward the car. A car requires minimum expenses that add up. This includes gas, air in your tires, and oil changes.
Are you not handy with cars? You’ll have to take your car to a mechanic for servicing and repairs.
Some cars also increase insurance premiums and other factors such as your age depend on how much you’ll pay in car insurance.
Try and plan out these costs as much as you can. Before putting any money down on a car, do some research. Research the gas mileage on your car, how much you’ll drive, and how much you’ll spend in gas every week.
See if there are any factors that contribute to raised car insurance premiums.
Check specific maintenance and repairs on your car. Research how often you’ll need to change your oil and if your car requires a specific type of oil. Other information such as the tires and brakes will come in handy.
5. Keep Different Options in Mind
When shopping for a car, you shouldn’t buy the first car you see. You should make a couple of trips to the dealership and test drive different cars.
Make sure to diversify your selections; test drive different types of cars and different brands. If you know you prefer a certain type of car, such as a truck, make sure you test drive different makes and models.
In addition, visit more than one dealership. You’ll be surprised how you can find a car for a better price at a different dealership or you’ll meet a car salesperson who’s willing to negotiate with you.
Your research shouldn’t stop there. Keep a tab of the cars you drove. Go online and research reviews. Check the average prices for these cars to ensure you’re getting a good deal.
Things to Know When Buying a Car: Know What to Expect
Buying a car is necessary but it isn’t a task you should take lightly. There are things to know when buying a car and you should know most of these answers before visiting a dealership.
Be open-minded with your selection and your budget. But you should always know if you should buy new or used or if you should lease or own.
In addition, always budget for every expense. Follow these tips and you’ll be pleased with your car selection.
Do you need more car tips and information? Continue reading our blog!