Buying a new car can be a fun experience when done correctly.
You want to stay disciplined, however, when it comes to negotiating with your dealer. Getting a good price on a new car is quite a different ordeal than getting a good price on something at the grocery store.
There are many tactics that dealers and other sellers may use to confuse you or make you think that you are getting a better deal than you really are.
The long story short is that if you haven’t had to negotiate a little bit, you aren’t getting the deal you could be getting. This all begs the question – what should you look for when buying your first new car?
Know What Goes into a Car Payment
Your car payment is made up of both principle and interest paid to a lender. Charging interest is how a lender makes money. Generally speaking, a loan with a longer term will result in you paying more interest over the course of the loan. Because of this you’ll want to make sure that your loan term is as short as possible. If you’re monthly budget is extremely tight then it securing a loan with a longer term and lower monthly payments, but understand that this will make the car more expensive overall.
Look at the Cost of Ownership and Not the Monthly Payment
When buying a car, you should look at the overall cost of ownership as opposed to just the amount of your monthly payment. In addition to that bill, you will need to pay for insurance, gas and maintenance. In some cases, cars that cost less to maintain or that get better gas mileage may be less expensive overall even if they have a higher sticker price. If you want to be environmentally conscious, Hybrid and fully electric cars are worth considering, especially since both are becoming more common and practical. They would likely help you save even more money on fuel costs as well.
Work with a Dealer If Possible
While private sellers may charge less for the vehicles that they sell, dealers like Young Ford and similar companies may offer better service. Dealerships tend to be open each day of the week, and they can take care of DMV and other paperwork in a matter of minutes. Salespeople may also be able to help you find the vehicle and loan that works for you and your budget.
Test Drive a Car Before You Buy It
You should never buy a car before you test drive it. It isn’t uncommon to hear stories of people who fell in love with the way a car looked or the type of engine it had only to find it that it didn’t meet their needs. Taking a test drive allows you to confirm that there is enough legroom or that the car has the right safety or entertainment features that you are looking for.
A car is one of the most expensive items that you will buy in your life. Therefore, you need to make sure that you spend your money wisely. Otherwise, you may be stuck with a depreciating asset and a loan that becomes less affordable every month.