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25 Things You Must Do Before Buying a Car

Buying a new car can be a daunting task, whether you’re purchasing your first or fifth vehicle. There are a lot of considerations to make and steps to take before you signing on the dotted line. Here are 25 of the top steps to take before buying a car.

1. Create a Clear Budget

With the price of gas higher than it’s ever been and other costs, you want to take time to create a car budget before you ever set foot on a dealership lot.

2. Know the Type of Car You Need

Notice that the subheading reads the type of car you “need,” not “want.” You may be intrigued by the flashy SUV that burns 12 mpg, but can you really afford it? If you have a big family and need space, by all means, purchase the car you need, but if you can get away with a gas-friendly economy car, why not take this route instead?

3. Check Consumer Guides

Before buying a car, it’s a must that you check consumer guides such as Kelley Blue Book and Consumer Reports to find out which vehicles have the best reputations and which are considered the best buys for the money.

4. Find Out What Cars Have Been Recalled

It’s also important to research vehicles to find out which have been recalled in the past. This is not to say that you should never purchase a vehicle with a recall history, but you do need to note what problems vehicles have had and whether those problems have been resolved.

5. Research Dealership History

Another important step is researching the history of dealerships you’re considering for purchase. Check the Better Business Bureau and other consumer sites to find customer complaints so that you don’t find yourself purchasing a car from a dealer with a history of selling lemons.

6. Save a Reasonable Down Payment

In your budget should be a section that calculates how much money you want to set aside for your down payment. While dealerships often let drivers purchase cars with nothing down, the more money you use on a down payment, the lower your monthly costs will be.

7. Shop Around for Auto Insurance

Car insurance can be a major expense when owning a car, especially if you are financing the vehicle. This is because lenders own the vehicle until you’ve paid the balance in full, requiring that you keep full coverage (liability, comprehensive and collision) on the vehicle to protect it in the meantime. To ensure you don’t pay too much on all car costs, it’s good to first shop around for affordable car insurance.

8. Check with Your Local Bank for a Loan

It has become a common practice for prospective car buyers to visit a dealership for a loan, but often times, those loans come with high interest rates because the dealer is providing you with the convenience of an on-site lender. So before working out financing through a dealership, consider visiting your local bank or credit union to see if you can acquire a low-cost loan.

9. Shop ‘Till You Drop

Buying a car is not a decision to be made in haste. Instead, you should spend time visiting numerous dealerships online and in person to find vehicle options that work for you.

10. Consider Optional Equipment When Pricing

If you are looking to purchase a new car then it’s important that you think about the costs associated with optional equipment, including improved audio components, leather seats and even added safety features.

11. Ask about the Warranty

If your car comes without a warranty, you will have to pay for all vehicle issues out of pocket. Different vehicles carry different manufacturer and dealer warranties that vary from bumper-to-bumper to limited repairs. It’s important to check with the dealer to find out about the warranty associated with the vehicle you’re interested in to avoid high costs for a vehicle you just purchased.

12. Explore Manufacturer and Dealer Incentives

Both manufacturers and dealers often offer incentives such as zero-percent financing or $2,500 cash back. It’s important to research these incentives before visiting a dealership because there may be requirements involved such as financing with the dealership or having a prime credit score.

13. Check for Liens and other Issues

If you’re buying a used car, it’s critical that you check the vehicle identification number (VIN) for the car to find out the vehicle history, which will include there being existing liens on the car or even information on whether it’s been floods. This is especially important when working with a private seller.

14. Think about the Big Picture

Most times, if you work with a dealer for financing, the salesperson will ask you to pick a car based on the monthly payment. But it’s better to think about how much you want to spend on the car overall, including title, registration and plates, to help decide the vehicle you want to buy.

15. Understand Lemon Laws

Lemon laws are rules that prevent shady car salespeople from selling junk cars. The rules vary from state to state, so it’s important that you research the laws for your state if you intend to purchase a used vehicle.

16. Find Out Your Car’s Trade-in Value

Before you head to a dealership, you want to know the value of your trade-in. A car salesperson can easily lowball you, and of course, this can result in you losing money on your purchase.

17. Run Your Own Credit Check

Whether you’re planning to finance a vehicle through a dealership or local bank, your credit will be a determining factor in how much of a loan you’re eligible for and what your interest rate will be. Take time to run your own credit check then find out how your reports and scores will impact your loan so that you don’t get taken advantage of by a lender who wants to underestimate your credit.

18. Ask Friends for Vehicle and Dealership Recommendations

If you’ve had friends and family with successful experiences with both cars and dealerships, ask for their advice to increase your chances of having a car-buying experience you’re happy with.

19. Make an Appointment with the Dealer

Most people have grown accustomed to showing up on a car lot and gaining a salesperson’s full attention, but if you’re serious about buying a car, it’s a good idea to set an appointment. This way, the salesperson can be prepared to assist you fully and you can feel comfortable that you’ve had time to prepare for negotiations.

20. Know Your Current Loan’s Standing

If you are currently in the middle of a long-term loan (60- or 72-month term) then you could be upside down, meaning you owe more on your loan than the car is worth. If you are in this predicament, you may have to pay the first loan balance or roll it into the new loan. Keep this in mind before you buy because it could affect your decision to move forward with the purchase.

21. Test Drive Vehicles

There’s no way that you should purchase a car without first getting into that very vehicle and test driving it. You need to know that it feels comfortable and handles well when you’re behind the wheel. You can only find this out by test driving it.

22. Take the Car to a Mechanic

If a dealership knows you are serious about buying a car, it will allow you to take the car for an extended period of time (usually they will photocopy your license and insurance first). Take this opportunity run it by your trusted mechanic where it can be hooked up to diagnostic machines to ensure it’s in good condition.

23. Negotiate

Any car expert will tell you that failing to negotiate for the car you want is a big no-no. Dealerships are always willing to negotiate on a price, so make sure to look at the cost comparable cars in your area are selling for then offer a low number. If the seller snaps up your offer with no fight, you’ve paid too much. And if you can’t seem to negotiate a price that makes you comfortable, don’t be afraid to walk away.

24. Stand Your Ground

You want to go into a dealership already sure of your budget and confident about what you want to purchase. A dealer may want to put you in a car he or she chooses, but it’s important to stand your ground on every aspect of the purchase to find success when buying a car.

25. Consider Your Alternatives

Finally, before you decide to go out and buy a car, it’s important that you consider all other financial alternatives. Do you live in an area with sufficient public transportation? Can you work out a car pool agreement with co-workers? If you don’t have to take on this major expense then it’s good to look at your alternatives.

Posted by stacey | in Infographic | No Comments »

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