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What to Remember When Buying a New Car

 buying a new carCar salespeople can have bad reputations. When you’re making such a large and important purchase, you want to have every assurance that the salesperson is giving you the information you need to make an informed decision. The salesperson though, doesn’t have buyers’ best interests at heart. He’s employed by the car company to sell cars and you, the buyer, have to negotiate against a person who negotiates all day long. The business model sucks but we can try to protect ourselves before we go car shopping.

Decide Before You Shop

Before you step foot in a car dealership, you’ll need to decide on a few things. There’s no sense in falling in love with a Ferrari when you can only afford a Chevrolet.

Although leases have a lower monthly cost than purchasing a vehicle outright, you could have an unpleasant surprise once the lease term is up. Leases are extended rentals with mileage allowances. Go over your mileage and you’ll have to pay for each extra kilometre. Small scratches and bumps you might otherwise never care about? The car company will charge you to fix each one of those when you return the leased vehicle.

When deciding your budget, don’t forget about the other costs associated with car ownership. Call your insurance company for quotes and look at fuel mileage to estimate monthly fuel costs. Research car loan interest rates to see how much your car debt will cost and look into rebates and incentives offered by the different car companies.

Before You Buy

Today, car companies will offer long loans to help people afford more expensive cars. That might not be the right option for you depending on how comfortable or uncomfortable you are with debt. Once you’ve figured out how much you can afford in monthly payments and figured out for how long you’re comfortable being in debt, you can calculate backwards to find out how much car you can afford.

With that total cost in mind, go shopping! Look at each of the dealerships online to see what they have for sale. Choose a couple that you like and can afford and then research them until your fingers fall off. Read online reviews, talk to owners of those vehicles, call dealerships – do everything you can to get as much information as possible about the vehicle before you visit a dealership.

At the Dealership

When you’re satisfied with your research and feel ready, visit a dealership for a test drive. Although you might think you know what car you want, you can’t know for sure until you sit in the driver’s seat. Once you’ve got the keys, take that new car for the ride of its life. Test every bell and whistle, drive the car for as long as you’re able and drive to places you would ordinarily go.

City drivers will want to test out parallel parking to get a sense of the size of the car, while suburban folk might try to convince the salesperson to let you drive it home to see how it looks in your garage.

Don’t shy away from older cars – although brand new, last year’s models can sometimes be sold at a substantial discount to the current year’s models. Cars don’t change enough from year to year to make a big difference on anything other than being able to tell people you’ve got a current year car.

Finally, when it comes time to negotiate, use your hard-earned research to your advantage and never pay the list price! Tell your salesperson what your research has shown in terms of sales data and what the competing dealerships offer. Fudge a little with your budget and tell him you can’t afford his price. If he is unwilling or unable to offer you a good price, be prepared to walk away.

Beyond all else, have fun! Shopping for a new car is time-consuming and buying a new car is expensive. The upside though is that you get to test drive a bunch of different cars, find something that’s perfect for you and enjoy that new car smell for months!

About the author

TK

TK is a Certified Financial Planner with over 15 years of experience in the banking industry. She started blogging in 2009 after the market crash. TK enjoys helping people plan their retirement, pay off debt, invest wisely, live on a budget and enjoy happy financial lives. You can see what she’s up to on Twitter @TahnyaKristina.

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