USA Finance

Aug 12 2017

How should I go about buying a car? #mobile #auto #repair

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“Those who expect to reap the blessings of freedom, must, like men, undergo the fatigues of supporting it.” Thomas Paine was, of course, not talking about the freedom of automobile or even horse carriage ownership. Nonetheless, there’s a point to be made: having a car can be a blessing and a burden.

Know the facts first: a car is not an investment. It is a depreciating asset, meaning it loses value over time. On average, new cars and trucks lose more than 20% of their value in the first year (Motley Fool). On the flipside, that means that if you can find a well-maintained car that’s just one or two years old, you’ll get a huge discount on an almost-new model!

The following outline will walk you through the process of selecting and purchasing a car.

1. Can you afford it?

  • Create a budget. Start setting aside money from your paycheck to buy a car if you don’t have enough in savings already.
  • Research. Determine the type of car that you want to buy, and make sure it is the best car for you. Things to consider:
    • Cost
    • Brand reputation
    • Size (sedan, truck, van etc.)
    • Gas mileage
    • Safety
    • Typical repair costs
    • Ability to meet long-term needs
  • Determine if you have the money for repairs, maintenance, gas, insurance, plates, taxes, registration, and all the other costs of owning a car. Buying the car is only one cost of owning a car.
  • These helpful websites can help you figure out pricing information:
    • Autobytel
    • Car.com
    • CarsDirect
    • How to buy a new car (Consumer Reports)
    • Edmunds.com
    • Invoice Dealers
    • Kelly Blue Book

2. Do you need a loan?

  • If you can’t pay for the car out of pocket, you can make a down payment and obtain a loan with monthly payments for the rest. To minimize the interest you pay, you should maximize your down payment.
  • Shop around for the best interest rate and other terms: check with the dealership, with local banks and credit unions, and online.
  • Read more in our car loans section.

3. New or used?

  • The biggest reason to buy used instead of new is the price. Determine if you have the means to buy a new or used car.
  • Risk of a used car: You typically buy a used car “as is,” meaning you are taking on the risk of there being any defects that you were unaware of. Unlike with a new car, which is warranted to be in new condition, you need to use caution when buying a used car and get all the details out on the table before making the purchase.
    • Ask questions and know everything about the history of a used car:
      • Number of previous owners
      • If the car was ever in an accident
      • Any previous mechanical problems
      • The maintenance history of the car
    • Have the car inspected by an independent mechanic with a good reputation, preferably one specializing in that brand of cars. If you’re buying from an individual, you can get the car appraised at CarMax and they’ll tell you if they find anything wrong with it.

4. Where do you find a car?

  • Car dealerships
  • Used car websites
  • Classifieds/Craigslist

5. At the dealership:

  • Be sure to have already done some research to try to figure out how low the dealer is willing to go on price. Don’t be afraid to negotiate. Every salesman’s goal is to get you to pay more than the bottom-line price. You may even have to walk away and wait for them to call you back. To the fearless go the best prices.
    • You can find out what dealers pay for a vehicle for $14 from Consumer Reports. Use this information to your advantage.
  • The best times of the year to buy a car are at the end of December and between July and October.
  • If you’re looking for financing, know your credit history. Get a credit report before going to dealers to make sure you’re all on the same page.

6. Before making the purchase:

  • If buying used, get a full inspection from a reputable mechanic before buying .
  • If buying used, obtain a Vehicle History Report from CARFAX.com. It will enable you to determine whether the car was ever salvaged, stolen, or recalled, the number of previous owners, whether it ever failed inspection, and whether someone has tried to create a fraudulent odometer reading.
  • Be wary of signing an “as is statement for a used car dealer. You are paying more to a dealer than you would to a private party, so you should demand at least 30 days to make sure the car is in good condition.
    • On the other hand, when you purchase a car from an individual, signing an “as is” statement is standard practice. That’s why it’s imperative to have the car thoroughly checked out before you buy it. If nothing’s wrong, you’ll get a better deal versus going through a dealer.
  • If you’re obtaining financing from a bank or credit union, have your loans finalized.




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