After years of avoiding those conversations with the oil change guy about the 30 things wrong with your car, after allowing your car to become your closet, kitchen, and trash bin all in one, after it literally breaks down on you in the middle of the night in an unfamiliar place… Yes, and I MEAN YES IT’S TIME FOR YOU TO BUY A NEW CAR (on your own!) Here’s how to buy a car:
My ol’ silver 2005 Pontiac Montana (aka minivan) was a gem. She got me through high school, college, and moving to a “big city” to start my first big girl job. She did it all! She handled my endless taco bell trips (and wrappers), my scratched mix CD’s, and of course my bad driving that eventually led her to die.
Fortunately, I found a new baby, a used 2017 Black Terrain. I didn’t need anything new and fancy, I wanted a reliable car with a great stereo, decent gas mileage, and enough room to carry all my stuff. As you may know, if you’ve read my About Me page, I work in digital retail for an automotive company so when I began looking for a car, I was lucky enough to get great advice from the people around me. Let’s begin!
The Best Ten Tips On Buying a CarHow To Buy A Car
1.) Money
How will you pay for this car? Begin by looking at your current finances. Look at your monthly income, budget, and spending habits. Can you afford a monthly payment, if so how much? Do you have money saved away and feel like spending it? Do you plan on making any other large financial investments soon? Estimate what you think would be good for you and write it all down for you to look back on. Do you want to pay off the car fast or make steady payments for a couple of years. This might take some time but it’s important to find out what’s right for you. I also recommend pulling your credit score. It’s good to know before applying for a loan of any sort. There are payment calculators online that can help you figure out how big of a loan you can take out. Use them.
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2.) Research, research, research
You’re here on my blog, so you’ve obviously begun doing some research, and good job to you because it’s important to know what you want. Take at least a month to begin looking. Ask family members how their car buying experiences have been, this can help you get ideas. I asked my friends and family about how they financed their cars, how they liked the current vehicle they were driving, and why they chose certain things about their car. Some people like to lease and others want to buy? What will work for you? I recommend finding a model of the car you want and/or similar and begin researching the vehicle before ever stepping into a dealership. From there, if you go in and it doesn’t feel right let the dealership help you find something similar then research that one.
3.) Leasing vs. Buying (Also, what’s a Trade-In?)
Leasing a car is essentially getting a brand new car, putting a $1000-$2000 downpayment down (sometimes free if there’s a sale), and keeping it for 1-3 years while making steady monthly payments every month back to the dealership. Then at the end of the 1-3 years, you give it back. Buying on the other hand is putting a down payment down, which you normally can choose. I would recommend at least $2000 then taking out a loan through either a credit union, bank, or the dealership, and paying it monthly. Once you are done paying the loan, it’s yours which means you can keep it forever or sell it if it’s still in good condition. Technically, you can trade-in your car to a dealership even if you still owe money on the car but the trade might change a lot. What’s a trade you ask? It’s giving a dealership your car for a price in which they will cut out of the price of the new car you want to buy. So, if you have a car worth 5k and you want to buy a 15k car, they will give you the new car for 10k and you will give them your old car. That’s a very simple way of looking at trading but it’s that general idea.
4.) Shop Around Town
Whether you want to go to a dealership, an automotive group, or shop on craigslist, shop around. It’s important to go and see what everyone is offering on the car you want. Some dealerships might offer long leases with small payments that might be better while paying off your student debt. I can’t really speak on going on craigslist or buying directly from someone because I have never done that. In my opinion, I don’t try to cut my own hair, I let the professionals do it. When it comes to buying a car, let the professionals help you.
5.) If you’re buying a Used Car… History, Mileage, Year
When buying a used car you want to know the history of the car. THIS IS EVERYTHING! If you find a car you like you need to do a CarFax on it. It will pull up any damages or problems with the car. It’s not the best to see terrible engine problems over and over again. Next, you want to find the Mileage of the car which is normally under the info of the vehicle. This will tell you how many miles is on the car from the previous owners. I recommend not buying a car over 100,000 miles if you can. The more miles on the car, the more run down it can be. Finally, the Year of the vehicle can be a personal preference but if you are serious about having a car for a while and making it last I wouldn’t go any older than five years. Again, stick with the gas mileage though. It could be a 5-year-old car, with 30,000 miles on it in your price range. Keep that in mind when shopping.
6.) If you’re buying a New Car or Leasing
Understand the exact model you are buying before purchasing down to a T. This includes features, recalls, maintenance – everything. Not that you shouldn’t do this for a used car, but for buying a new car you have the control of choosing exactly what you want, so make sure it’s right. Check to see what the last version of the car had and what changes they’ve made to it. Especially nowadays technology is constantly improving in cars and it’s good to know the difference between the various models you are interested in. Were there recalls on the vehicle? Go take test drives and really figure out if it’s right for you. The salesperson will most likely ask you if you’re interested in the upgraded versions of the car, also known as Trim Levels (see below) that have more features and capabilities. Be sure to research those too. When it comes to leasing make sure you are aware of the miles limit per year on the vehicle. An average limit is 10,000 miles a year which means if you drive over 10,000 miles then you may have to pay an extra fee. If you have a long commute or take road trips often, I would recommend asking for different miles options
The Best Ten Tips On Buying a Car
7.) Interest Rates & Loans
One of the first things the salesperson will ask you is “How are you financing this vehicle?” Obviously, if you have the money you can just pay in cash. If you don’t have the money, you will need to take out a loan. You can take out a loan through a dealership or credit union of your choice. The difference about this is interest rates – interest applied to your loan over time so you want a low one like 3.6%. If you already have a credit union you work with and they have low-interest rates, use them. If you are unsure, look around for options near you and then see what the dealership is offering. They sometimes have deals on their interest rates so it’s not something you want to throw off the table. If you finance through a bank/credit union, you personally will have to apply for an auto loan and then once you’re approved they will send you a check and you will give that to the dealership. The “money down” is due at signing which is money you would directly give to the dealership and that’s not related to your loan
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8.) Car Insurance
You will need to get car insurance before you ever pick up your new car. If you already have car insurance this will be easy because you can transfer things. If you don’t and/or you were under your parent’s, you will need to get new insurance for this specific car. This requires you to shop around online a bit. Ask family or friends if they know someone local that could give you a good deal. If not, just look online and get some quotes. Once you choose and sign with an insurance company they will tell the dealership and you’ll be all set
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9.) Be prepared (What are Docking Fees??)
Before you go buy a car, make sure you have your license with you (obviously), social security card, and money for a down payment. Make sure you have the phone numbers of banks and the insurance company just in case. It’s important to have the money for the down payment but also money for taxes and doc fees. Doc fees are fees that cover a dealer’s administrative costs related to title, registration, and other paperwork involved with the car purchase. It’s a random thing that no one ever discusses but it’s real and it will be added on when you sign. They can range from $1-$1000 so have extra money set aside. Once in a blue moon, you can find dealerships that don’t make you pay for these fees but it’s rare
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10.) The Buying Process
Are you ready for a long day? Just kiddddding, but kind of not really. It takes time to buy a car, as it should, it’s a very important and large expense. I recommend calling ahead, wherever you end up going. This way they have someone ready for you exclusively. When you get to the dealership don’t be afraid to ask for exactly what you want. If you’ve been shopping online, ask to see those vehicles. I highly recommend asking to take test drives. Most places allow overnight test drives too. Once you’ve found the car you want, be ready to run through the paperwork. It’s a lot but it’s really not hard nor difficult to understand if you’re prepared. They will offer you different warranties and other add-ons at the end of the sale. It’s easier said than done but if at any time you’re lost ask them to slow down. This applies to anywhere you go to buy a car. It’s like teaching your grandma how to use her phone, you know it like the back of your hand so you can fly right through the steps. In reality, she might need you to explain the small stuff. Don’t be afraid to ask about the small stuff.
How To Buy A Car
The Best Ten Tips On Buying a Car
The Best Ten Tips On Buying a Car
Last but not least, car lingo you should know…
Vin Number (vehicle identification number): Serial number attached to a car forever to identify it at any point in its car history. This can be used to help you look up the history of a used car. It’s also helpful if you find a car online, then come into the dealership. If you give the dealership the VIN number they can find the car immediately.
MSRP (Manufacturer Suggested Retail Price): Also known as the “sticker price.” It’s the suggested price from the automaker. It’s essentially the original price but most dealers bring that number down a lot with sales and incentives.
Incentives: offers that apply to some people and take money off a new car or lease. It may seem confusing but you can simply have the dealership see which ones you apply for. (example: you could get an “employee” discount if you’re brother works for the automaker)
APR (Annual Percentage Rate): also known as Interest Rate or finance rate. It’s the interest on a loan, a percentage of the amount borrowed calculated over 12 months.
Title: vehicle’s proof of ownership issued by the state’s Department of Motor Vehicles. A loaned vehicle’s title will be held by the lender (known as a lien) until the loan is paid off. Likewise, a leased vehicle’s title will be held by the lessor until the lease is bought out. (source)
Trim Levels: are the different versions of one specific model, usually differentiated by letters such as SL or XE. The difference is the standard equipment and upgraded features. The “lower ” trim levels = less expensive and less equipped with features.
The Best Ten Tips On Buying a Car
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The Best Ten Tips On Buying a Car
The Best Ten Tips On Buying a Car