Four things You should know before you buy a new car.
- Know what you want
- Know what you can afford
- Know your credit status
- Know what manufactures incentives are available in the market
Know What You Want
Before you can make a smart new car buying decision, you have to narrow down your choices. There have never been more options in the car buying process than today. Doing some solid research will help you with the buying process. Today you can buy or lease. You can buy domestic or any of a long list of import cars. You have your traditional passenger vehicle, truck, SUV, or sports car — each of them with different trim levels, engine sizes, and two or three class sizes for each vehicle type for most every manufacture.
The best way to get a good deal on a new car is to be open to more than one car, but you should eventually narrow the list down to 2-4 models. This will give you options and walk-away power if you can’t agree on the final numbers with the dealer on your first choice.
Know What You Can Afford
Next, you want to get a good handle on your new car budget. In fact, for most people this will come first. The new car budget comes in two forms — the total spend and the monthly payment. If you are a cash buyer, you are only concerned with total price. However, if you are making payments you will have a different set of negotiation and new car shopping challenges. When you look at your monthly budget don’t just think about the combination of principal and interest rate. You should also consider term (length of loan). The lower monthly payment of a 72 month auto loan may be more attractive than a 48 auto month loan, but the additional interest cost may change your mind. It is important when doing your research to play out a few scenarios with an auto loan calculator. See the auto finance page on NewCarPromos.com for more details.
Getting a good handle on your new car budget will make negotiating a lot easier. The key to getting a handle on your automobile budget is to understand the total monthly cost of ownership. This includes the car payment, the auto insurance, the fuel cost, and maintenance cost. By doing this you can make buying and owning a new car a more pleasurable experience, versus a financial burden. This is especially true if you are making a transportation upgrade.
It’s really important to get an auto insurance quote on those 2-4 cars or trucks you are seriously considering. There could be a monthly insurance premium swing of up to $25 per month between cars. This could be a decision influencer when plotting out your new car budget. You should always get an insurance quote. This is an easy way to save money. I recommend that you get a quote from someone other than your current agent/provider even if just to keep your current provider honest. As you get older and accidents fall off of your record the opportunity for auto insurance savings typically increase.
Know Your Credit Status
Next check our credit before you buy a new car. It is a good idea to do a credit check early in your new car shopping process. If you find an error on your credit report, you will have some time to work on getting it removed before you buy your new car. This can have a dramatic impact on your monthly automobile costs. It can affect your rate, the terms, the amount you can borrow, the amount of down payment required, and even affect your insurance rates. Yes! There are many auto insurance providers that use credit score as an underwriting criterion. The assumption is if you are careful with managing your financial responsibilities, then you are likely to be responsible with your driving habits and are less of an auto accident claim risk.
By knowing your credit status you also have realistic expectations on your likelihood to get that “0%” financing deal. There are great tools out there like FreeCreditReport.com that can help you monitor and give you advice on how to improve your credit score. Visit the Finance page on NewCarPromos.com for more information.
Know Which Manufactures Specials Are Available In The Market
Finally, you should know what manufactures specials are available in the market. The incentives come in different forms — cash back, rebates, special financing terms, low interest rates, and special low cost leases. It is important to understand that these specials come from the manufacturer and not the dealer. The dealer does have some special promotions too, but don’t confuse dealer incentives and the manufacture incentives. It’s like store coupons versus product coupons. An example is $1.00 off of a gallon of juice from Walmart versus $1.00 off of gallon of juice from Dole. Now you may not be able to use them both, but then again you may… read the fine print to know your limitations.
The new car incentives come in different shapes and forms. There are new car rebates or cash back. There are also special incentives for being a fireman or a police officer or a recent college graduate. Additionally, there are special loyalty incentives for being a former owner of a specific make. Humorously, there are also special competitor rebates and incentives for being a former owner of a competing make. This is a super easy way to save money. It’s a classic example of knowledge is power… especially when buying a new car.
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