How to Buy a New Car on a Budget
You have reached a point in your life where you know it’s time to buy a new car—great! But you also know money is tight. Thus begins the challenge of not only finding the right car for you, but one that also sticks to your budget.
Buying a new car is daunting and the process becomes cloudy thanks to opinions from other people. Considering the tips down below can make the process easier and will give you the self-assurance that you’re picking the right car.
Set Your Budget
Start your search by knowing what you can afford. No one knows your finances better than you. Calculating a monthly payment first will help you narrow down your options but remember to stick to your budget. Also, don’t forget about sales tax or last-minute add-ons that tend to hide in the fine print. Dealerships will always try to add nice perks that only add to the monthly payment, don’t feel pressured to accept. Examine your budget before heading in and keep that final number in mind, no matter how well the salesmen convinces you otherwise.
Newer is Better
Banks and online lenders are more likely to approve your loan for a new car rather than a used one. Your new car loses about 10% of its value driving out of the lot and only keeps decreasing year after year. It is recommended to shop for a car that is 1-3 years old.
Buying a Cheap Car isn’t Always the Smartest Option
Sure, you might think you’re saving some major bucks on a cheap, used car you saw on the internet, but what you’re really purchasing are unforeseen costs and headaches. Cheap cars are bound to have some type of maintenance and repairs. It’s better to use that money towards a car that is reliable and trustworthy. If you’re set on buying a used car, make sure you take a look at its latest service record, as well as its history, and buy from a trusted source. A dealership that offers pre-certified used Audis for sale at your local dealership is a better option than buying from a stranger on a Craigslist posting. Use common sense when shopping, and stick to dealerships to ensure you’re not buying a lemon.
Browse, Browse, Browse
The decision to buy a new car is a huge step in itself. Take your time to shop and do not rush the process. Browse different auto dealerships online and in person. Bookmark cars you like and check back on a weekly basis for any updates or price adjustments. Do not fall in love with the first car you see- create a list of options where you can compare models.
Always test drive any car that you are considering buying. A car may look and sound great, but you won’t know for sure until you’re out on the road. If it doesn’t feel right, then keep looking. New cars will always feel strange at first, but you will know if the car isn’t for you. You want to feel comfortable in your new car, no matter what.
Research Your Financing Options
Dealerships can make more money off of you if you do not have a clear understanding of financing. They will ask what you’re willing to pay for and try to lure you with a more lucrative car that supposedly fits your budget. What they’re really doing is just extending your auto loan period, and you definitely do NOT want that. Stick to a small loan period; 3-4 years is generally the best term.
People often feel that the word of the dealership or seller is final, but that is not necessarily true. Don’t be afraid to negotiate for a better price or interest rate that is within reason. At the end of the day, the dealerships want that sale. It’s better for them to sell a car at a discounted price than no car at all. It’s a win-win for everyone!