Personal Finance Advice: Buying a Car

We all know – or should know – that buying a car involves a lot more than finding a make and model that suits your personal tastes. While it’s true that you don’t want to buy a car that you personally find to be hideous, there is so much more to buying the right car than choosing one that makes you look good and matches your favorite nail polish. The more overall finance and less fashion you can consider while buying a car, the better.

The most important thing to remember when buying a car is this: Be Prepared. Buying a car should not be an impulse buy.

Wrong: “Look at that cute car! Maybe I should go buy it.”

Right: “Look, there is that car that I spent a lot of time researching and have secured financing for. I’m ready to buy it now.”

If you wander onto a car lot without having taken the time to research your various financing choices and car options the salespeople are going to eat you alive. They know exactly how to maneuver a casual conversation with a potential customer into test drive which evolves into a credit check and a sale. Before you know what happened you’re driving off the lot with a new car. You can avoid this situation by doing a few things:

Don’t visit the lot until you’re ready to buy. You can get all the pricing information you need online or with a quick phone call to the dealership. If you do walk onto a lot without doing any research, don’t take your wallet with you. You can’t buy a car if you don’t have your identification with you.

Look beyond car lots. There is no rule that says you have to buy a car from a dealership. You can get a great deal buying from another individual, but be sure you have the car inspected by a mechanic before you agree to the purchase.

Get financing ahead of time. Secure financing through a bank or credit union before you buy the car. This gives you negotiating power while also ensuring you get the best interest rate possible. You should spend some time researching the best rate available to you. If the dealership can offer you a better rate then you can cancel the loan with the other financial institution.

Know how much the car is worth. The price a car is being sold for is not necessarily the amount of money the car is actually worth. Find out the actual value of a car before you spend your hard earned money on it.

Negotiate. You have the upper hand when you go to buy a car. You can tell the salesperson how much money you are willing to part with and demand all sorts of extras. If you get everything you want at the price you want to pay, then it’s a testament to your great negotiation skills.

Remember that you also have to take the time to research the various cars available within your price range. Find out which cars have the options you want and the safety features you need. Don’t forget to find a car with great gas mileage so you can continue to save money long after you’ve bought the car.