With so many different vehicles on the market to chose from, it can be difficult to decide between the car you really want, or maybe, the car you really need. Whether you’re buying a car for everyday travel, something to assit with a personal business, or an additional car to drive during the summer months, the steps towards buying that new auto should be the same. Here are some tips:
1. Do your Research! It’s always a smart idea to know both the MSRP of a car, and the invoice. The invoice price is what the dealer paid for the car. MSRP is the “Manufacturer’s Suggested Retail Price,” which is what the dealer expects you to pay. Know the Difference! It can help you during negotiations. You’ll also want to research customer reviews of the vehicle and the cars safety record.
2. New or Used? Recently, used car stock has declined. Many people are holding onto their vehicles longer now before trading in. There are also programs available for people to dump their cars for cash resulting in less stock for buyers. When buying a new car, you should know that it depreciates in value much quicker when removed from the lot compared to a used car. Traditionally, a buyer could buy a two or three year old car and feel as if they’d made a better financial deal. But because stock is low on used cars, prices have gone up significantly. Furthermore, most vehicle purchases aren’t an investment. You buy a car to get you from point A to point B, or you buy a car for enjoyment. If you take care of the car, new or used, it should last a significant amount of time.
3. Spend some time shopping! As difficult as it may be, try and hold out before you finally make a purchase. Go to multiple dealerships and look at the same model. Don’t settle for the first dealership’s offer. You may be able to find the same car two miles down the road at a better price.
4. Be careful with add-ons and extended warranties. Add-ons are expensive and most of the time, they’re things you don’t need. Extended warranties are very pricey and in many cases, the coverage doesn’t protect you from issues that could cause a significant problem or even mechanical failure.
5. Plan your financing accordingly. Chances are, you’ll be financing your car for a term between four and six years. Your local credit union can help you with this. In most cases, dealer financing rates are higher than that of your trusted financial institution. If you’re eligible for membership with SourceONE, let us know when you’re in the market and we’ll be sure to offer you the lowest rate available.