Did you know that the average person owns 13 cars in a lifetime, each costing an average of $30,000? This statistic, shared by the National Automobile Dealers Association, indicates that buying a car is a repeated significant occurrence in a person’s life. Not only do we rely on our automobiles to get around safely, but purchasing them is also a big financial endeavor. Car purchases often lock us into monthly payments that can affect our home budgets and lifestyle choices. So, it is important to think wisely and do some research to be confident we are buying the right car, at the right time, and for the right price.
Buying the right car:
With so many makes and models available, choosing a car can be a daunting task. The main decision is whether to buy new or used. Newer vehicles offer the prestige that comes with owning a new car and are generally more reliable, but they do depreciate and generally cost more than used cars. By purchasing a used car, one can save thousands of dollars. Though money is saved upfront, a used car may require more maintenance and money to upkeep than newer models and may not last as long. Thus, pros and cons must be explored. Choosing the best vehicle that is right for you encompasses finding a car that fits your needs. Do you need hauling or towing capacity, or are you looking for special features such as a sunroof or keyless entry? Decisions should be made practically. If you have six kids to transport, a sporty two-door Toyota Supra is likely out of the question. Rather, a Toyota Sienna might be a better fit. Another main factor to consider is safety. Do some research to discover how the car did on the ISH Safety test. Also, consider safety features when buying a vehicle, such as working airbags, backup cameras, brake assist, or any other things that can make your ride safer and sounder.
At the right time:
In general, we are a society that has an “I want it” attitude and seeks instant gratification. This combo can be dangerous when it comes to buying big-ticket items. Sometimes we may rush into decisions thinking that the time is right, when, in fact, we may have been better off applying patience. Waiting on the right time can provide opportunities to save money, improve a credit score, or secure a better interest rate. Waiting also provides an opportunity to learn more about different manufacturers, visit multiple dealers to test drive various vehicles, and learn about financing big-ticket items. Though dealers may offer incentives, never be pressured by a salesman to buy a car. You are always free to walk away and come back when you are ready to buy. And there are always good deals to be had in the future.
For the right price
Understanding the overall cost of the car, the value of your trade in, your down payment, loan terms and interest rate, and your monthly costs are all part of buying a car. Become educated on lingoes such as MSRP (Manufacturer’s suggested retail price), sticker price, and final price. Also understand that the market fluctuates, so it’s important to be familiar with current car pricing in your area. Because there are sometimes deals to be secured, learn how to negotiate for better terms, pricing, and upgrades. Regardless of what is on the market, it is important to live within one’s means. This sometimes requires buying a less expensive car or forgoing some bells and whistles. Understanding whether to buy or lease may come into play. While leasing may sound more appealing due to lower payments, you’re essentially borrowing and repaying the difference between the new car value and its residual value when the lease ends, along with finance charges. One last thing, the impact of COVID-19 on employment and the economy has been tough. Be sure your work and finances are secure before buying a costly vehicle.
Sources:
www.nerdwallet.com (Compare costs: Buy new car vs used?)
www.consumerreports.org (Leasing vs. buying)