Buying your first car is like a right of passage that you will remember for many years. It’s a big and exciting step to take, but can oftentimes be stressful. Here are some tips to keep in mind whether buying your first car or your fifth car.
1. The “B” word
Although it’s not a very sexy word, budgeting is a key step to do before you begin shopping for a car. Cars are expensive – but it doesn’t stop there. You need to keep in mind the additional fees you will incur during the time of purchase such as dealership fees, taxes, loan fees, etc. in addition to your as gas, tolls, general maintenance, the recurring cost of car insurace, etc. Once you have a clear understanding of your budget, you can start to look for cars in your price range. Can’t afford the car you want? Look into an older model year or take some more time to save. Before you sign any paperwork, have an idea of what the upfront costs are and the monthly costs if you’re taking out a loan.
2. Show me the money!
If you’ll be taking out a loan for your vehicle, be sure to do your research. Dealerships may not have the best financing options and you will want to shop around. A percent or two can make a big impact when you reach the maturity of your loan. For example, a loan for $15,000 for 60 months at 3% interest will equal about $1,172 in interest. However, if you bump that interest rate up to 5%, you increase the amount of interest paid to $1,984. By doing a little shopping around, you could have saved over $800.
3. New (to you) car
A used car will come with a lower price tag up front and you’ll be able to keep more of your investment since new cars lose significant value the moment you drive it off the lot. In fact, new cars typically lose about 33% of its value within the first year. If you’re unable to purchase your car in cash, you could easily be upside down and owe more than your car is worth. Just be sure that the used car you are looking at has been inspected by a mechanic you trust and you run a full vehicle history report.
4. Take a test drive
This is one of the most exciting parts of buying a new car. Once you’ve done your research, it’s time to get behind the wheel and make sure you like the way it feels. Keep in mind the feeling of the steering, seat height, control layout, etc. We suggest you take more then a 5 minute drive around the parking lot to get a good feel for the vehicle. If your sales rep doesnt’ want to give you the time? It may be time to find someone else or another dealership.
You know what car you want and you have the financing set. You took it out on a test drive and you want to move forward. The next step is to make sure you’re paying the correct purchase price. The Kelley Blue Book Fair Purchase Price is a good start to give you an accurate idea of what people in your area have paid for the car you’re looking into. If it’s not, don’t be afraid to negotiate with the sales representative.
5. Have the proper insurance
There are many factors that can reduce the price of your auto insurance premium – keeping more money in your pocket. Features like anti-theft devices and antilock brakes can reduce your premium. Have good grades? Be sure to share that when quoting and you may be able to save even more. A good rule of thumb is that less expensive cars are typically cheaper to insure. However, the best way to save on your auto insurance is to be a safe driver. Get an instant quote using our online quoting software to see how much Waterbrook can save you.