Next to buying a home, buying a car is the biggest financial decision many people will make. Though the adage, “you must learn from your mistakes” certainly applies to buying a car, such a mistake can be a costly one. Before you strike out on your own to buy your first car, consider these tips to help you make the best decision.
Pre-Plan Your Vehicle Purchase
If you plan to finance your car, the first thing you need to do is check your credit report and score. Your credit history and score will go a long way toward determining whether you can get a loan and, if so, the interest rate you will get. If you find your credit score is low, you may want to wait a few months if you can and try to improve it.
Next, you need to set your budget. Figure out how much you can afford to spend and, if you are financing the car, how much of a monthly payment you can afford and what amount you can offer as a down payment.
After you have the financial details out of the way, it’s time to do some research. Look at automobile price guides and visit car websites to get an idea of what the right car is for your budget and situation and how much it should cost. These resources can also help you value a trade-in. You also need to research the dealers you plan to visit. Check with your local Better Business Bureau and ask friends or use social media sites to solicit feedback about particular dealers.
If you plan to finance the car, you might want to check out some financing options ahead of time. Visit your local bank or credit union to see if you qualify for a loan and what interest rates you can get. That way, you have something to compare to the financing offered at the dealership.
Research The Market
Before you actually go car shopping, do a little reconnaissance. Go to several dealerships during non-business hours, on Sundays or in the evening. This allows you to check out the cars available and the sticker prices to give you an idea of what’s out there.
When the day comes to finally start your search, bring a companion along. Of course, if you are buying the car jointly with someone, such as a spouse, that person should be present. But if you are on your own, ask someone with experience of buying a car, such as a parent or older sibling, to come with you for advice and support.
Visit more than one dealer. Even if you find what you think is your dream car on your very first visit, it pays to shop around. The salesperson will do everything possible to keep you there to buy the car, but you need to resist, unless you are being offered an incredible deal.
Making The Purchase
When talking with a salesperson, don’t tip your hand. Don’t throw out an amount that you are willing to pay and don’t say you can afford a certain amount a month. Simply say you are looking for a particular model and year and are looking to get the best value.
Once you settle on a car, make an offer and then negotiate, negotiate, negotiate! Used car dealers usually have more room to negotiate on price, but new car dealers may be able to sweeten the deal by throwing in options. They may be able to get the price down by finding you a model that has fewer options. If you are buying a used car, ask the dealer to allow you to have it inspected by a third party.
Before you leave the dealership with your car, make sure everything is in order. When you are signing paperwork, make sure the price is what you agreed to and the financing terms are the same as what you were quoted. If anything is out of the ordinary, be prepared to walk away.