Buying a new car is a nerve-wracking experience and mistakes made at the bargaining table can result in years of aggravation and overpayment. That’s why it’s important to establish good purchasing strategies before pulling the trigger on that new car deal.
Decide on a Budget
There’s no point in shopping for a vehicle until you know what you can afford. If you are buying the car with cash, the considerations are straight forward. On the other hand, if you are planning to finance, things can get a little trickier. If focusing only on an affordable monthly payment, you may wind up in a deal where too much will be paid for the car over the long haul.
Prepare yourself by talking with several lending sources about funding options and take a long and honest look at your monthly budget. To supply a practical payment value to work with, use a loan calculator. With it, you can manipulate sales prices and interest rates, giving you a clearer idea of how much car you can truly afford.
The Sticker Price Isn't the End of the Story
A car’s listed price is never what you'll ultimately pay for it; there is a host of additional fees and other charges to be aware of as well. These extra costs may come in the form of dealer fees, taxes, extended warranties, service packages, etc. Factor in an additional 10% to 20% in costs beyond the price of the vehicle and rely on that figure when budgeting.
Research the Vehicle
Take a look at safety ratings, read online reviews, go to dealerships and look at your options and slowly come up with an idea of the vehicle you'd like best to own. This will help narrow down possibilities from the hundreds of makes and models available. Once you have decided on the type of vehicle suits you best, more research and a test drive will help you with final decisions.
Negotiate and Use Rebates
Once you've decided on the car you want, it’s important to shop strategically and use every tool available to get the best price. This includes shopping at the beginning or the end of the month when dealers are working hard to meet their quotas, and relying on rebates as much as possible. Be sure to get price locked in before mentioning a special rebate to try and get the price dropped even lower.
Another good tip is to shop multiple dealerships. This enables you to pit them against one another when it’s time to buy.
Buying a new car doesn’t have to be difficult, but if you don’t take the time to research it’s easy to pay more than necessary or to wind up with a car that doesn't suit your needs. "Buyer's remorse" is actually a thing and is felt more often and for a longer time with car purchases than perhaps with any other kind. Spend a bit of time to avoid this; it’s worth the added effort.