Every person reaches a time period in their life when they feel the need to buy a new car. Maybe their vehicle has had trouble and isn’t worth maintaining any more. Maybe they have grown tired of the vehicle and just feel that they need a new one. Maybe their vehicle dies suddenly and they have to buy a new one out of necessity.
When this moment comes, it’s often an exciting yet anxiety producing moment. Buying a new car could be necessary for a job. It may come with all the new technology. It may come with heated seats or leather seats, neither of which were had before. But there’s also the price tag.
Every person should think about the following steps before they buy a car.
First, what is the amount that I can spend?
Second, how do I find which car type I’m looking for?
Third, how do I approach the dealership?
Taking the first one, what is the amount that I can spend? To answer that, the person will need to take a look at their finances. Do you they have any outstanding loans or debt? Do you have a mortgage payment or credit card that has been maxed out? Answers to these questions will be helpful.
Generally, there’s a certain amount of risk that a person can take on based on their income. That risk is generally titled as “debt” and comes from loans and credit cards. If the person has an existing car loan, a mortgage, or a large credit card balance, it may be difficult financially to take on a large car loan.
The second part of that question is to look at assets. It’s possible to look at existing income from a job or from investments. It’s possible to look at hard assets like the cost of anything material that is appreciating in value. It’s possible to look at refinancing loans to consolidate debt, which would create assets.
Once the person has figured out this part, they are ready to move to the second question.
The second question is, how do I find which car type I’m looking for? A person may have a certain car type they’re looking for which is very broad, such as a car, a truck, or a van. But they may struggle with getting that category narrowed down to a few car types to choose from.
The answer is to research online. Find the car type specific to watch you’re looking for by going through online sites (car dealership sites even) to determine which type of car you’re looking for specific to that category. Some may have more technology than others. Others may have better gas mileage.
But getting it down to that correct range could help the person when they go to the dealer.
And finally, how do I approach the dealership? That is a tricky question. First, look at the following facts about cars in America:
- The F-250 comes standard with a 6.2-liter V-8 engine that reaches 385 horsepower.
- The Prius Eco gets up to 58 mpg in the city and 53 mpg in the highway.
- In 2016, certified pre-owned sales reached a record 2.6 million units.
Approaching the car dealership is a trick question. In part, because they are going to throw statistics like the first two at you in hoping you bite. The key with the car dealership is leverage your capacity to deal. What that means is that you should never tell a car dealership salesperson you’re staying with this dealer no matter what.
That puts you at disadvantage when it comes time to state your terms and for the salesperson to state theirs. It’s important to go to a car dealership armed with information as well. Having that will let you make more informed decisions, such as whether to buy used Ford or used Toyotas, depending on what you think.
That is, rather than what the car dealership salesperson is saying.
It is possible to go to many dealers, such as going to a Ford dealership and then a Toyota dealership. It is possible to go between new cars and used cars. Any way you choose, as long as you’re making an informed decision, rather than just by emotion after getting carried away drive…you’re good.