Smart Car Buying Tips
Buying a car can be a source of tremendous joy. It can also trigger a great deal of woe. The difference lies in how well you plan and execute the purchase. Let’s take a look at some smart car buying tips to help you maximize joy and eliminate woe.
- Be Real with Yourself
Too many people see a car they want and move heaven and earth to get it. In other words, they let the way they feel determine the way they act. This can set the stage for great deal of despair.
In many cases, caring too much about how they are viewed by the outside world drives this. In other words, they allow the car they own to dictate their worth as a human being.
As you can imagine, this often pushes them to overextend their finances.
- Count Your Money
You’re always going to need food, clothes and shelter. That means you’re going to also need to cook, clean your clothes and maintain a home. All of these cost money.
If you took out loans to go to school or used credit to acquire different things, you’re going to have to meet those obligations too. Meanwhile, you should also be saving for your future needs.
Ideally, you’ll accomplish all of the above with money left over to buy a car.
However, those things should come first.
Subtract the monthly cost of all of them from the amount of money you bring home each month. Keep in mind there’s more to having a car than just making the monthly payment. You’ll buy fuel, pay car insurance, encounter maintenance costs and pay registration fees.
With all of those factors calculated, you’ll have an idea of how much cash you can put toward the monthly payment to buy a car.
- Assess Your Credit Standing
Federal law mandates you be provided with one free copy of each of your three credit reports (one each from Experian, Equifax and Transunion) every year. Get them, look them over and correct any errors they may contain. These can include accounts listed as balances owed when you’ve paid them in full. In extreme cases, you might also find accounts you did not open of which you had no prior knowledge.
Make every effort to get them cleaned up if you find errors. Check your credit score once you’ve done so. Most banks will help you get yours for free — or a small fee.
This will help you determine the interest rates for which you’ll qualify. The higher your credit score, the less interest you’ll have to pay. You can find current interest information at the U.S. News & World Report website.
- Get Pre-Approved for a Car Loan
Now you’ve determined how much you can put toward a car payment and you have an idea of the interest rate for which you qualify. Look at how much cash you have saved to put toward a down payment for a car.
Plug those numbers into a good car affordability calculator and you’ll learn what you can afford to pay for a car. The calculator will also ask you how many months you’d like your loan to run. Keep it to 60 months or less. Anything longer can get you into trouble in a number of different ways.
Once you’ve determined what you can comfortably afford, shop some lenders to see who’ll give you the lowest interest rate for the amount of months you want. Apply for pre-approval only with the lender with which you want to work. Filing too many applications can diminish your credit score.
- Begin the Shopping Process
Now that you know exactly how much you can afford to pay, you’re in a better position to begin shopping for your car. Having a pre-approved loan will help you stay in the appropriate price range and give you a bargaining chip to get an even better interest rate from the dealer.
Shop with your lifestyle and your needs into consideration. In other words, Corvettes are off the table if you have a family and this will be your only car. However, you can find any number of cars capable of providing a visceral experience while also serving your responsibilities. These smart car buying tips will help you do so, while ensuring your choice fits comfortably into your budget.
