The book, “I Will Teach You to Be Rich” by Ramit Sethi is a great tool for those who need concise and factual tips on how to start off their finances right. If you are in the market to buy a car, there is a chapter dedicated to new and used car buying tips.
Here are some of the main points:
Make sure you buy a car that is reliable, avoid car repair issues at all costs, so make sure you research the most reliable cars out there. Don’t go by looks, you need to feel happy in your car but you also need a car that won’t leave you stranded in the middle of a highway on a dark lonely night. As long as the car looks presentable and neat, you’ll be fine. Buy a car that will last you at least 10 years, not one that looks good but will only last you 5. Then you will get stuck making payments on an unreliable car and you will be forced to sell it in order to get rid of it.
Check if the insurance rate will go up with the car you will acquire. Depending on the car you are looking for, the rate applied by your insurance company might change.
Is the car fuel efficient? Remember, you want to have this car long term and with gas prices going up, you’ll want a car that doesn’t eat away at your budget.
If your credit is excellent, you’ll probably get a good low interest rate. So check into your credit score and go armed with that information to the dealer. Sometimes, dealers will lower the price of the car but then increase your finance terms by increasing the rate or extending the loan term, so be careful and make sure they tell you what the terms are in writing (if they don’t want to give it to you in writing, write it down yourself and jot down the name of the person who gave you the info.)
Toyotas and Hondas hold onto their resale value well. Will the car you have in mind hold its’ value? Check www.kbb.com to find out.
The website www.fightingchance.com gives you a customized report for the exact car you are looking for. It will tell you how much car dealers are paying for your car. This service is not free, but you’ll get useful info if you opt for this route.
No need to hop around
To avoid going from dealer to dealer, have them email you or fax car quotas to you, then go with the lowest price offered. Don’t forget to check the car thoroughly in the daylight. Have your mechanic look at it for any potential problematic issues. (offer the mechanic a nice tip for this extra service)
Make sure you have a down payment. If you don’t, you’ll have to pay more in interest charges and the car will end up costing you lots more!
What will the total cost of your car be over the long run? Calculate insurance costs, gas, repairs or maintenance, etc.
Take your time with when choosing a car and be careful of the scams salespeople will try to pull.
October, November and December are a good time to look around for a car (especially new) because dealers are trying to get rid of the left over stock and are forced to make room for next year.
Go well informed and be patient, the right car is waiting for you.