The path to buying a car is filled with a lot of potholes that could easily cost you a lot of money unless you are extra-careful. To ensure that you are getting the best possible deal for yourself, examine these tips:
Buying a New Car Instead Of a Pre-Owned One
It’s strange but true that new cars can lose anywhere between $3,000 and $5,000, the very minute you sign the papers and drive off from the showroom. That could effectively mean that in case you have put down a low down payment on the car loan, you could immediately be ‘upside down’ on the loan. This essentially means that your car is at that time worth less than the amount of loan outstanding. While the smell and driving experience of new wheels may be really exciting, you’ve really got to ask yourself whether it is worth a few thousand dollars that could be plowed into something else equally essential.
If there’s a model that really appeals to you, you will be surprised to find it far less expensive if it is about a year or so old. You will still be able to take advantage of the original manufacturer’s warranty, and enjoy years of driving pleasure at a far more reasonable cost.
Not Taking the Advantage of the Internet
There are a large number of websites that offer huge amounts of information on virtually every aspect of cars and the ownership experience. Even before you step into a dealer’s showroom, you could refer to sites like Edmunds, Kelly Blue Book, etc. to get to know the prices, technical specifications, features, performance, and running costs as also owner reviews and ratings and suggestions. These will help you to narrow down your choices for the all-important test drive and help you save a lot of time.
Even if you are looking for certified pre-owned cars, you should make it a point to look up the history of the vehicle using the VIN number. Searching the vehicle history with the VIN is equally important for new cars because you can never be too sure what may have happened to it in transit. There are cases where damaged cars have been passed off as new by unscrupulous dealers. Sudden floods and storms can also damage entire parking lots of new cars that sometimes are sneaked into the market later, so a little research can save you from buying a lemon.
Thinking About Monthly Payments Instead Of Focusing On the Price
Smooth-talking car dealers usually try to talk to customers in terms of the monthly payments needed to be paid instead of the vehicle price. This can be completely misleading as the EMI can look very affordable when the loan period is taken for 60 months; however, long-term loans end up costing far more in interest payments. It helps to know your budget before walking into the dealership and sticking to it. One way of not losing your way at the showroom is to get a pre-approved car loan.
Getting Car Dealer Finance
Finance offers from the dealership are usually some of the most expensive. Usually, you will be able to get far better deals online or from credit unions. Even though interest rates largely depend on your credit score, it helps to compare a number of sources before making up your mind. Make it a point to review your credit report and have any errors corrected before applying for a loan as this can significantly improve the interest rate that you will be able to get. However, if you are able to get a zero percent offer from the dealer you should look at it seriously because you could stand to save a bundle. Dealer finance may also be the only viable option if you are not able to get loans from other sources due to bad credit.
Purchasing Add-On and Accessories from the Dealer Point
After you have finalized your model, the dealer will try and entice you with the lure of undercoating, alarm systems, music systems, alloy wheels, tinting, decals, seat covers, and a lot more. Usually, these items are overpriced and are a ploy to boost the profit of the dealership. If you are really keen on an after-market accessory, try outlets dedicated to such products and you will usually be able to get far better deals as well as a lot more choice.
Byron Simpson is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance cent.