Buying a new car is a high-involvement purchase. Because it is a significant investment that could affect your savings and lifestyle for the next several months, it is essential that you keep in mind several things to make a wise purchase. You do not want to end up paying a lot of money for a car that is nothing more than a beautiful box. The following tips can help any person going out to buy a new car.
Find the right dealer
This is easier said than done. Finding a dealer you have complete faith in can be difficult. However you can overcome this little hurdle by seeking references from friends and family. They could suggest a dealer who is dependable and offers good service.
Browse the Market
It is never wise to put all your eggs into the first basket you see. Visit several showrooms of the same manufacturer. You will be surprised at how much rates can differ across dealers. Do bargain. It is not uncommon for dealers to offer 10 to 20 percent discounts on the retail price.
Talk to the dealer about the payment options available. Whether you want to lease the car or pay full in cash, do discuss the alternatives. It is quite likely that you may discover an option that is more suitable to your interests. Also find out what exactly your service contract covers.
Get the Jargon
Before you go out to buy a new car, it would help to become acquainted with some of the terms dealers usually use to explain or confuse the buyer. For instance, the invoice price is the price the manufacturer charges to the dealer. This eventually comes down as dealers are offered discounts and rebates. Secondly, the base price is what you would have to pay if you were not getting any other options.
If you do not want to pay cash in full for your new car, then financing may be the best option available to you. However, it is always important to know a thing or two about financing arrangements to avoid many of the pitfalls that a number of
The worst thing that you can do is to get the car dealer to arrange the financing for you. This might seem like a very convenient arrangement at first, but remember that only you can have your own best interests at heart. The best thing for you to do is to find a lender or financer on your own instead of accepting whatever the dealer tries to sell you.
Again, as you did for finding the right dealer, do browse around and collect information about the various plans and options offered by various lenders.
Unfortunately, some people only focus on the size of the monthly payment to determine which of the payment plans is best for them. Consider the size of your monthly payments in the light of the price of your new car, the annual percentage rate charged by the financier and the time period of the financing arrangement. You may also find it useful to discuss the likelihood of a smaller monthly payment by making a larger down payment initially.
Don’t fall for it when your dealer tells you that it is required by law that you get credit insurance. That is up to your discretion. If you think you can afford it and you find a good plan that does not overlap with any existing insurance you may have, then surely go ahead with it.