Are you in the market to buy a car? Here are some smart car buying tips to help you afford and own a car without getting owned.
Photo by Jamoker
“A bank is a place that will lend you money if you can prove that you don’t need it.” ~ Bob Hope
Let’s face it guys and gals, buying a car is really an ego trip for most of us. Guys want to look strong and decisive — ergo, lots of power and chrome. Girls want to look cool — ergo, sleek lines and pleasing colors inside. Car manufacturers know this and they actually have teams of women engineers designing smart features that ladies will love. What happened to the days when we just wanted a tool to get from point A to point Z?
Smart Car Buying Tips
1. Don’t buy a new car.
It’s ridiculous how much a new car depreciates as soon as you drive it off the lot. The car may lose as much as 20% the first week, depending on the brand (check resale values on the web). Why not let somebody else bear the brunt of the loss? Over 2 years, the depreciation may reach 50% or more. Again, some brands and models are considered “cheapies”; the price is low because the quality is low.
Yes, it’s true that interest rates may be higher for used cars; but it helps to whip out your calculator and crunch the numbers. If the new luxury $30,000 model is worth $20,000 after a year and the owner put in only 10,000 miles, you can have a beauty for a third less. The first owner was paying 5% interest (pretty common) or approximately $1,500 a year. You get a loan at 8% (pretty steep) and you only pay $1,600 a year. That’s $100 more; nothing compared to the $10,000 you saved for a car which should be in excellent shape and still under warranty. If you gave the dealer a down payment of $5,000, your savings are even greater. You can even afford to buy the gas!
2. Know what the car is for.
Are you a mom with 5 kids or a single guy? Is the car used for work commutes only, or are you going on extended trips now and then? Is your husband 6′ 5″” and weighs 320 lbs? You get the meaning. Why buy a monster SUV when a small compact would do just fine (why buy an SUV at all for that matter?).
There are so many choices nowadays that will save us gas and still fit our needs, that we’ve got no excuse for buying a car for all the wrong reasons. So start navigating online and look at all the options available. The main dealers have photos of all the used cars on their lots and they want to get rid of them ASAP! You have the power!
3. Be prepared and do your homework.
Americans are born with offers of quick, easy credit. Your mailbox and your email inbox are flush with credit temptations. But if you can, buy your next car for cash and you’ll get an important discount on the dealer’s price. Better yet, buy it from a private party if you have the tools to make sure the car is in good condition. If not, remember that dealers may be sued for selling “lemons”. So go to a reputable used car dealer, look over the used car lot and make an offer. Do not be swayed by the salesman; if you did your homework, you’ll get the deal you want.
4. Beyond the used car dealer’s lot, tie some loose ends.
Once you drive off the lot, your used car depreciates, but much less than a new car. Whatever the dealer says, don’t trust them: have the oil changed as soon as possible, the fluid levels checked, and the tires properly inflated (you can go to a tire shop: they’ll do this for free and give you an estimate on the life of your tires). Before signing the deal, make sure you’ve had the car checked by an expert.