Buying a new car is a big deal. It is the second most expensive purchase next to your home. It will not last as long as your new home, making a repetition of the buying experience a necessity every few years. Buying your first car can be especially daunting. Most everyone considers themselves a savvy negotiator, and car dealerships recognize this and welcome these customers with open arms. The unfortunate truth is that the best way to buy a car is to arm yourself with information and get some professional help as well.
It may seem odd to address financing before choosing what new car you want, but arranging it in advance can save you a fortune in interest and fees. All car dealerships offer financing. Most of it is third-party financing through banks and other services. Some used car dealers offer in-house financing. You will likely pay a higher interest rate at a car dealership even if you have good credit. Interest is boosted on loans to provide a higher return for the car dealership. It may be a small increase, but it is money out of your pocket. Arranging for financing in advance through a credit union or bank lets you know what you can really afford before you go searching.
Choosing the Vehicle
If you have no budget constraints, then the sky’s the limit for buying your first car. However, for the majority of car buying consumers, there is a budget for car buying. Some people choose based on a monthly payment. Others set a dollar amount not to be exceeded. However, this often fails when at the car dealership. The next better looking model may only be a few hundred dollars over your budget. Then, another feature catches your eye or an added dealer option seems worth it, and in no time you are way over your budget. Remember that every dollar needs to be repaid and is coming out of your pocket.
Everything from the new car smell to the pristine look of the interiors and exteriors of the vehicles in the dealer showroom are the equivalent of what kids see in candy and toy stores. Surprisingly, adults can lose rational decision-making skills when going out to buy a new car. It is best to pick the brand you want, then look at specific models at different trim levels. If you find one you really like, go home and think about it, returning the next day for a second look. If there are other decision makers in the car buying process, talk it over with them. Ignore pressure tactics from sales personnel. The models and trims you see at one dealer can be found at others, even if the one you are looking at is sold to someone else.
Consider Buying Used
The used car market encompasses everything from used car departments at major new car dealers to small used car dealers and even private owner sales. Buying used can avoid taking the hit of thousands of dollars of depreciation that instantly comes off a new car as soon as it is driven off the lot. New car dealerships typically have the best looking and most reliable used cars. Most come with the remainder of a factory warranty still in effect. Other used car dealers may rely on auctioned cars that come from new car dealer trade-in vehicles they do not consider worth selling. The best car for first car buying experiences is often a late model used one with low miles and plenty of factory warranty left.
If you dread the thought of sitting down with car sales personnel who have seen every type of customer at their desk, then hiring a professional from a car buying service may be to your advantage. They can also help if you are unable to dedicate the time you wish into searching dealerships for the car model and trim you really want. Often, when you go into a dealer and hit them with specifics for make, model, trim and color, you will be presented with a few other cars the sales person has in mind. Seeking the help from new car brokers or buying service professionals can get you exactly what you are looking for at a pre-negotiated price.
Dealer Add-On Services
Car dealerships greatly increase their profits with additional services such as exterior sealants, interior fabric protection and even rustproofing. Most, if not all, of these things are not worth what you spend for them. The same goes for most extended warranties. The cost for the warranties are just too high to justify their expense. The salesperson may advise it is only a few dollars more per month on the loan, but the full cost should be considered as well as the interest you will be paying by tacking on the extra stuff to the loan. New cars do not need paint sealants, fabric protection or an extended warranty.
In wrapping up any deal you make, get whatever is offered or promised in writing. Even though verbal contracts are binding in some states, they are almost impossible to prove. Get the deal in writing, and take all the time you need to review all of the documents before signing. Ask for some privacy while you read over every line. Use a piece of paper to write down any questions you come up with. Buying a financed car comes with up to six years of payments now. It is not a decision to enter into lightly. Unlike most other retail products, cars cannot be returned for your money back.