7 Things to Consider When Buying a New Car
Although buying a new car is extremely exciting, it can also be a nerve-wracking process.
That's because getting a new car is a big commitment, and it comes with a hefty price tag. Make the wrong decision, and you may be stuck with a bad choice for years to come.
Not to worry, though – here are seven things to consider when buying a new car to help you make the right choice.
1. Determine What Your Needs Are
It goes without saying that the type of car you buy should suit your needs. Consider what functions your new vehicle will need to perform and what you need to get out of it.
For instance, are you buying a sports car because you're looking for a fun new ride? Or are you looking for a car to accommodate your expanding family?
When you've decided what kind of car you're looking for, you need to determine what features and characteristics are essential to you. Make a detailed list and write down your priorities in descending order – from the most important to the least important.
Think about what you'll be using the car for – for instance, will you use it to commute to work? Or will it be used for family trips or leisure activities? What you will be using the car for will help you decide your priorities – whether it's safety, fuel economy, size, etc.
When you've decided what type of car will suit your needs, research the makes and models that align with your priorities. Don't forget to read customer feedback and reviews on the models you're interested in so that you can make an informed decision.
2. Research Dealerships
When you know what car you want and have checked its availability, you should also research a few different dealerships in your area. Check online reviews for customer feedback and ask for recommendations from friends and family.
Look for reputable royston car dealers – be on the lookout for a proven track record of good customer service and see how long they have been in business. Researching a few dealerships and shopping around may also get you a better deal on the car you want.
3. Check Your Credit Score
Buying a new car is a big expense, so you need to make sure that financing it is a viable option. You'll need a good credit score to qualify for an auto loan. The higher your credit score is, the higher your chances of qualifying for a lower interest rate on your car loan.
Your credit score will also come with a document detailing your payment history. If you have failed to make payments to any lenders (student loans, credit cards, store accounts, etc.), it will negatively affect your credit score.
When you apply for an auto loan, the lender will check your credit report and history to calculate your risk – which is how likely you will default on payments.
A history of late or non-payment with other lenders will reduce your chances of getting a lower interest rate – or the lender may decide that you don't qualify for an auto loan at all.
It is important to know if you have bad credit before applying for an auto loan. If you find that you have a low credit score, now is the time to take steps to rebuild it. Make sure all lenders and accounts are paid on time and make sure any errors on your credit report are rectified.
4. Assess Your Financing Options
Once you've checked your credit score and know that it's satisfactory (or if you are taking steps to improve it), you'll need to decide how you will finance your new car. Find out what the current auto loan rates are (you can do this at your local credit union or bank) and weigh it up against your other options.
Getting pre-approved for an auto loan before even visiting the dealership will save you time and help you set a realistic budget. Getting pre-approved will mean that you know exactly how much you can spend on a car, which will help you narrow your choices down by setting a price range.
Preapproval will also give you an advantage when negotiating the sale price because it will strengthen your position – having a pre-approved loan essentially means that you're a cash buyer.
5. Research Your Car's Trade-In Value
If you already have a car you'd like to trade in, do your research before asking a salesman to tell you what it's worth. You can look for your vehicle by make, model, year, condition, and mileage in the Kelley Blue Book to discover its resale value.
If there is some minor damage to your old car, consider getting it repaired yourself to avoid losing some of its trade-in value. As soon as you have done your research and know what your trade-in is worth, you will be more prepared to negotiate the price at the dealership.
If you have the spare time, consider selling your old car yourself – often, you can get a better price for it that way. Then, you can use the cash to put down a down payment on your new car.
6. Determine What Monthly Payment You Can Afford
Understanding the factors that influence your auto loan and how much you'll pay monthly can help you determine what monthly payments you can realistically afford.
To calculate your monthly payment, add the total loan amount and the annual percentage rate (APR), then divide it by the loan term. If you have cash for a down payment on your new car, it will decrease your loan amount, resulting in lower monthly payments.
7. Look into the Car's History
Once you've found a suitable car, you should look into its history before you purchase it. You can check any car's history by inputting the VIN number into a tool like CARFAX or AutoCheck.
Finding the car's history will tell you how many times it has been looked up, how many owners it had, and if it's been in any accidents.
In addition to checking the car's history, having it checked by a mechanic before you buy it is always a good idea because an inspection can find potential problems that could end up costing you thousands of dollars.