New Car Purchase Advice: 4 Essential Tips
Getting a new car with all of the latest features can make you feel like a million bucks. It can also make it seem like you need to spend that much to get everything you want on some vehicles.
Americans are paying record balances for new vehicles today, with some terms lasting six or seven years. That means the average amount borrowed to get a new set of wheels is above $32,000. Even if you have excellent credit, a 4% interest rate will cause you to pay a lot more than the MSRP.
If you need a new car and a used vehicle won’t meet your needs, then these crucial points are essential to consider.
Best Tips to Follow When Buying a New Car
The best advice you can follow is this: shop around. Unless you have an emergency, then get different offers from at least two dealerships. If you have time to solicit three or four, then you’ll have the information you need to get a great deal.
These are some other points you may want to consider.
- Buy a car that you can afford right now.
If you have a current car payment that you make each month, it can help to wait until that vehicle loan gets paid off before purchasing another car. You can even save what you think the monthly payment would be for a year to create a better down payment for the next vehicle.
- Always negotiate the terms of the deal.
Do everything you can to knock the price of your car down by as much as possible. Start with the lowest number you can imagine. An easy way to find some middle ground is to ask for a 4-year loan at the monthly payment of a 5-year or a 6-year lending product. If you stick to your guns, you might walk out with a fantastic deal. Don’t be afraid to leave and come back later too! Patience is key to getting a great deal.
- Talk to lenders about pre-financing options.
You don’t need to obtain financing at the dealership. New car loans from your bank or credit union can get you a rate that could be one or two percentage points lower than what you’ll get offered with lender financing.
- Don’t forget to factor in the cost of insurance.
Your new car is likely going to come with a higher monthly insurance cost. Getting a great deal on your vehicle can make it easier to manage this expense, but it is also forgotten about quite often during the negotiation process. You’ll want to try to get at least 2-3 different quotes to save as much as possible, and getting insurance quotes on the type of vehicle you are considering before purchasing can help figure out final totals.
Buying a new car doesn’t need to be a headache. When you walk into a dealership with a plan in mind, then you can walk out with the vehicle you want at an incredible price.