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A Guide To Buying Your Next Car

June 4, 2013

Car Buying GuideA car is a major purchase and a big investment, so taking the time to consider your options and shop around is vital to ensuring you won’t make a decision you regret. Following a few tips cannot only help you find a good, reliable car but also save money on both the purchase of the car and on your car insurance. Buying a car has two phases: preparing, and shopping.

Phase One: Preparing For Car Shopping

Buying a car is a process that should take some time and consideration. Unfortunately all too often we get a little too excited about that new car smell and buy without due thought, which can result in buyer’s remorse as well as higher payments than budgeted for. Before you even start looking at cars, you should consider:

  • Whether you want to buy new or used
  • What your budget is for monthly payments
  • What features are most important to you
  • How your insurance will be impacted
  • Who will drive the car and for what type of use

New or Used

Buying new or used can be a difficult choice, and there are pros and cons to each. A new car is likely to get a better finance rate, which means paying less interest and more principal. New cars also come with warranties, and may have other perks like free roadside assistance.

Used cars will generally cost less, and have already taken the initial depreciation hit. The lower value can make them a little cheaper to insure. Although many pre-owned cars don’t come with a warranty, some do; dealers sometimes offer warranties on pre-owned vehicles, and some may have some time left on the original warranty.

Your Budget

When deciding how much you can spend on a car, it’s important to think of it terms of monthly payments and not so much on the total purchase price. Many things can affect how much you pay each month for your car, including the down payment and the interest rate. Determine what you can pay each month and stick to that budget.

Which Features Are Most Important

Safety features are big on the minds of most car shoppers, and you should look to get a vehicle that offers as many safety features as possible. There are many other features, however, that can be prioritized so you know what you’re willing to pay more for and what doesn’t matter as much. Consider things like:

  • the car stereo
  • sun and moon roofs
  • leather versus cloth seats
  • seat heaters
  • navigation systems

These and other common features that can make the cost of that car add up fast. Make a list of your must-have features, those that would be nice to have, and those you can live without.

Insurance Impact

Very few people think to find out how much their insurance will be when they go car shopping, and it can result in a surprise when that bill comes in. Most companies and online quoting websites will be happy to provide car insurance quotes on some of the cars you’re considering for you so that you can make an informed decision and not wind up with the insurance cost hurting your budget after ensuring the car payment is something you can afford.

Who Will Drive The Car, And For What Purpose

Consider who will use the car most and what their needs are when you are looking at what type of car to buy. It will help you to determine what you really need in a car and what might not work for you. Someone who does a lot of driving alone will probably want a smaller car with good gas mileage. Someone who drives the kids around a lot needs a spacious backseat and easy access.

Phase Two: Shopping For a Car

With a good idea of what you need and what you can afford made clear, you can start shopping for that new car. During the shopping process you should take a few steps to make sure you get the right car:

  • Compare the cars on your short list
  • Do some research on the cars you’re considering
  • Shop around for insurance quotes on the car you choose before you buy

Compare Models

Test-drive several different makes and models so that you can compare them. Look for the model that gives you the best combination of features for the best price. Compare the same model new and used as well to determine if it’s really worth paying a higher price for a new car.

Do Your Research

The internet makes it easy to research the car you’re looking to buy. Read reviews from owners of the car as well as consumer reports and crash test ratings. If you are buying a used car, request a vehicle history report that will tell you if the car has been in any accidents. Most used car dealers will provide this for you on request. Doing your research before you buy will ensure you don’t have any surprises later.

Shop Your Rate Around

Once you decide on a car, there’s one more thing to do before signing on the dotted line. There are two rates you should shop around for when buying a new car. First is your insurance rate. Buying a car is a good time to shop around for insurance quotes and compare; you may find that you could be paying a lot less. If you are financing your car purchase, the second rate you should shop around is your interest rate. You might get a better deal going straight to your bank or credit union than taking what the dealer offers.

By taking your time in both the preparation phase and the actual shopping phase, you can make sure you buy the right car, a car you can afford, and don’t have any surprises on your insurance bill or anywhere else after you drive it home.