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Tips To Consider When Buying A Car. New cars these days have better safety features and more tech than models from a decade ago. And let’s face it.

But many people worldwide make big mistakes when buying cars. Take new car purchases with a trade-in.

A number of buyers roll over an average of $5,000 in debt from their last car into their new loan. They are paying for a car they don’t drive anymore. That is not a winning personal finance strategy.

Follow these 5 Smart tips To Consider when buying a car:

1. Get preapproved for a loan before you set foot in a dealer’s lot.

The best advice to give to people is to get preapproved for a car loan from your bank, a credit union, or an online lender.

For one thing, getting a loan from a lender outside the car dealership prompts buyers to think about a crucial question. “How many cars can I afford? You want to do that before a salesperson has you falling in love with the limited model with the sunroof and leather seats.

Getting preapproved also reveals any problems with your credit. So before you start car shopping, you might want to build up your credit score or get erroneous information off your credit report.

And shop around for the best rate. People are being charged more for interest rates than they should be based on their creditworthiness.

Many people don’t realize it, but the dealership is allowed to jack up the rate it offers you above what you actually qualify for. So with your credit score, you might qualify for an interest rate of 6%. But the dealership might not tell you that and offer you a 9% rate. If you take that bad deal, you could pay thousands of dollars more in interest. With this,the dealership and its finance company will split that extra money.

2 Keep it simple at the dealership.

When you are buying a car at a dealership, focus on one thing at a time. And do not tell the salespeople too much. Bare in mind, this is a kind of game,it like playing a card, if you playing cards, you don’t hold them up and say, “Hello, everybody, look , I have a pair of queens,” right?

So at the dealership, the first step is to start with the price of the vehicle you are buying. The salesperson at the dealership will often want to know if you are planning to trade in another car and whether you are also looking to get a loan through the dealership, be sure not to answer those questions.

That will only make the game too complicated, and you are playing against professionals. If you negotiate a really good purchase price on the car, they might jack up the interest rate to make extra money on you that way or lowball you on your trade-in. They can juggle all those factors in their head at once. You don’t want to. Keep it simple. One thing at a time.

Once you settle on a price, then you can talk about a trade-in if you have one, just do your homework there too. A little research online can tell you what your trade is worth. Advisably looking at the free pricing guides online would be of much help. On Autotrader, you can also see what people in your area are asking for your car model.

Never be afraid to walk away or buy the car at a good price without the trade-in if you feel the dealership is lowballing you on your old car. You have plenty of other good options these days

If you have bought a car, you know how this works. You have been at the dealership for hours, you are tired, you have settled on a price, you have haggled over the trade-in — then you get handed off to the finance manager.

“You are led to this back office. They will often refer to it as the box,” This is where the dealership will try to sell you extended warranties, tire protection plans, paint protection plans, something called gap insurance. Dealerships make a lot of money on this stuff. It is often very overpriced and most people have no idea how to figure out a fair price.

3. Don’t buy any add-ons at the dealership.

Is this add-on, you know, being marked up 300%? You don’t really know any of that. A good strategy, especially with a new car, is to just say no to everything. He said especially with longer-term loans, there is more wiggle room for dealers to try to sell you the extras. The finance person might try to tell you, it is only a little more money per month, but that money adds up.

Concerning the extended factory warranty, you can always buy it later. So if you’re buying a new car, you can buy it in three years from now, just before it goes out of warranty. At that point, if you want the extended warranty, you can call several dealerships and ask for the best price each can offer. That way, you are not rolling the cost into your car loan and paying interest on a service you wouldn’t even use for three years because you are still covered by the new car’s warranty.

4.Beware of longer-term six- or seven-year car loans.

A third of new car loans are now longer than six years. And that’s a really dangerous trend. There is a whole story about why that’s the case. But in short, a seven-year loan will mean lower monthly payments than a five-year loan. But it will also mean paying a lot more money in interest.

Seven-year loans often have higher interest rates than five-year loans. And like most loans, the interest is front-loaded. You are paying more interest compared with the principal in the first years. Most people don’t even realize this, and they don’t know why it’s dangerous.

5 Don’t buy too much car and consider a used car to save a lot of money.

The golden rule is that all of your car expenses should really be not something more than 20% of your take-home pay. That, total car expenses, including insurance, gas and repairs. “So the car payment itself should be between 10 and 15%.

And if a new car with a five-year loan doesn’t fit into your budget, you might decide you don’t really need a brand-new car.

We are actually living in a golden age of used cars and the reliability of used cars is remarkable these days. There is an endless river of cars coming off three-year leases that are in very good shape.

And even cars that are older than that are definitely worth considering. People are buying good used cars at a hundred-thousand mile and driving them for another hundred-thousand mile. So I’m a big fan of buying a used car as a way to save money.

No one is going to know it’s a used car, give it nice spraying, modify it to your specification and you are good to go.

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