(Newswire.net — January 29, 2024) — Taking the super-wealthy who can afford to add a boat or seaplane to their personal transportation arsenal out of the equation, buying an automobile is the second-largest investment the average person will make in a lifetime after a home. And, much like buying a house, the process can be downright daunting, to say nothing about the way banks and dealerships make the experience unnecessarily complicated. Still, with a dollop of knowledge and some preparation about resisting the “hard sell,” you can experience a more hassle-free and affordable process.
In this article, we’re going to cover the primary things to do and not do if you happen to be in the market for your first automobile.
Do Determine Your Affordability Bottom Line
To put it bluntly, new and pre-owned cars are far from cheap, especially in today’s out-of-whack market. According to online vehicle marketplace Kelley Blue Book, as of August 2023, the average new car costs $48,451, with the average used car costing an eye-watering $26,651. As such, it’s crucial that you crunch the numbers and establish how much you can afford to pay for a vehicle.
Don’t Avoid Emotional Attachment
We’ve all done it before: lusted after a champagne lifestyle on a beer budget. In other words, to put it in automotive terms, have you been lusting after that sexy red Ferrari but find yourself living on a Chevy budget? Don’t get your heart set on a ride that you can’t realistically afford.
Do Work on Improving Your Credit
If you plan on taking out a loan for your new automobile, it’s important to get your credit up to snuff prior to your loan application submission. A higher credit score could yield a lower interest rate, and thus a reduced overall cost.
Don’t Fall for a Dealership’s Sales Tricks
Dealers and their respective salespeople can be slimy institutions that often wear buyers down by unnecessarily prolonging the car-buying process in the hope that you’ll agree to their ideal price, not yours. Don’t allow them to push you into making an on-the-spot decision because this is an important investment in your life, and don’t let them guide you toward a vehicle you don’t want just so that they can move their inventory. When looking at dealerships, be sure to look at the reputation and reviews of a dealership.
Do Get Preapproved for Financing
Approach a credit union or bank for preapproval if you need a loan for your purchase; this step provides a transparent glimpse into how much you can afford to pay for a motor vehicle before you head to a dealership.
Don’t Buy Beyond Your Needs
What do we mean by this? Don’t buy a more expensive car than you actually need – a salesperson will attempt to wow you with a vehicle that costs more than you planned to pay, but if you traveled to the showroom with a budget in mind, stick to it.
Do Avoid Lengthy Loan Terms
Terms for auto loans now last 84 months or even more, so while your monthly loan payments may be cut by stretching out a loan term, it might not represent a budget-centric move further down the trough (this is due to longer-term auto loans typically charging higher interest rates than shorter-term auto loans).
Don’t Avoid Expensive Add-Ons
It’s amazing that this is still going on in the 2000s, but here we are: when you’re at the dealership, a manager or salesperson might attempt to suggest expensive add-ons that you don’t really need or want. These may include so-called fabric protection, extended warranties, and wheel coatings/pin striping packages, but no matter – resist the temptation to purchase them.
Buying a car, whether it’s new or used, isn’t something that should be viewed as a “walk in the park.” To the average buyer, it represents an investment of tens of thousands of dollars, so buckle up for the experience by checking your credit score and credit report, setting a budget, shopping around for a car loan, and comparing prices at numerous dealerships.