If you are considering buying a car for the first time, you might not know where to begin. Making such a major purchase is most likely the first step in your financial life, so it is very important to take it seriously.
That’s the word from the experts at a national consumer education campaign called AWARE (Americans Well-informed on Automobile Retailing Economics).
To help first-time auto buyers navigate the financing system, it has put together this pop quiz:
• Do you have a budget? If you don’t already have one, create one. It will help you determine how much car you can afford. Don’t forget vehicle-related costs outside of a new car payment, particularly insurance costs. Premiums for many young drivers can be as much as the monthly car payment. Don’t forget to include maintenance, gas and taxes.
• Have you pulled your credit report? Your credit history may affect your finance rate, so it’s a good idea to get a copy of your free credit report before heading to the dealer. Go to www.annualcredit report.com for yours.
• Have you shopped around? Do some homework before you decide which car to buy and where to buy it. Call your bank or credit union. Talk to dealerships. Print out all quotes and keep them in a folder that you bring with you when you shop for the car. Whether you finance through your dealer or elsewhere, there are typically no penalties to refinance if you’re not satisfied.
• Do you know how finance rates are determined? Vehicle financers use a number of factors to determine the finance rate they will offer you, including your credit score, the price of the vehicle you would like to purchase, manufacturer incentives, the amount of your down payment, your debt repayment options and the length of the finance contract. The rate offered to you may be negotiable.
• Is there someone you could ask to be a co-signer if needed? If you are under the age of 18, are currently not employed, do not have a credit history or your credit history is not good, you may need a responsible person to co-sign the finance contract for you.
• Do you know the difference between leasing and financing? Know what an APR is? Credit insurance? Guaranteed Auto Protection? You need to educate yourself on these terms and understand the value and price of aftermarket products. If you don’t want something, don’t sign for it.
According to Eric Hoffman of AWARE, if you answered “no” to one or more questions, go back and hit the books before you buy a car or truck. Said Hoffman, “Consumers, especially those at the beginning of their financial lives, need to be vigilant about understanding the vehicle-financing process. If you make mistakes along the way, they can follow you for years.”
Tags: Americans Well Informed On Automobile Retailing Economics, Auto Buyers, Automobile Retailing Economics, Car Payment, Co Signer, Consumer Education Campaign, Credit Score, Debt Repayment, Finance Contract, Finance Rate, Finance Rates, First Time Car Buyers, Free Credit Report, Insurance Costs, Insurance Premiums, National Consumer Education, Pop Quiz, Repayment Options, Time Car, Young DriversRelated posts
1. Money: Make sure you know what is your budget. Never exceed the amount you can afford. For instance if your income is 50,000$ USD, you shouldnt spend more than 25,000$ on the car because the car will may become a finical problem to you.
2. Personal need: Ask yourself what is the purpose of the car. Decide whether you want a 4 door sedan or a 6 people van. Look into what class and what kind car you want. If the purpose of the car is just purposely transportation, then dont look into luxurious cars such as Benz or BMW. Or whether the car is for family purpose or personal love of car then you can decide whether you want a SUV or Sports Car.
3. Difference Brand: Once you decide what type of car you want. Look at different brands that has similar cars. For instance, if you are looking into the Lexus IS, also look into the Nissan G35, BMW 3 series, Acura TL, Cadillac CTS. You get the point. The reason why is because the price range from the same class can range from 30,000 to 45,000 which is a lot of money. Therefore, you should go test drive and find out exactly which car you want.
4. Buying it New or Used. After you decide what car you want. Start researching online on how much does the new car and the used car cost. Make you sure researching on many dealerships as well. You can save up to 1,000$ USD. Personally, I would like to buy a new car over a used car, but if theres a good deal on used car, then you should reconsider and decide yourself.
5. Finance. Try to reduce the finance rate as low as possible to benefit you more. Try to look for the best plan for you and communicate with the dealer.
6. Communication with the Seller. Now this is the tricky part. Dealers usually jacked up the price of the individual car because they can make more money if they make sales. Therefore, to prevent spending extra money, you should do your homework by reaching how much your car is really worth and make offers to the dealers instead of them making offer to you.
7. Mileage. There no doubt that the price of gas will continue to go up. Therefore, it might be a good idea to consider how much you are willing to spend on gas. You want to find a good car with good mileage.
8. Insurance Cost. Different car also have different insurance rate even when they are in the same class. The insurance cost should definitely be a factor to consider when you are comparing with other cars.
9. Maintenance Cost. Maintenance Cost for cars also varies for different car. For instance Benz will charge over 100$ just for an oil change while Toyota may charge 25$.
10. Warranty. This should be the last thing you look at when you buy a car. Look at what the warranty covers and compare with it other car companies
Tags: Acura, Acura Tl, Benz, Bmw, Bmw 3 Series, Budget, Cadillac, Cadillac Cts, Extra Money, Finance Rate, Homework, Kind Car, Lexus, Luxurious Cars, New Car, Nissan, Nissan G35, Personal Need, Sports Car, Tips For Buying A Car