Buying a new vehicle can be exciting, but there’s a lot to think about before you sign on the dotted line. In order to make sure that you’re getting the best deal possible on your new car, follow these simple but effective car buying tips.
- Pay Attention to Interest Rates
How much you’re paying in interest plays a big part in the overall cost of your car. A $5,000 car may sound like a great deal, but if you’re paying 10% interest over the course of a 5 year loan, you’re going to be paying roughly $1,500 in interest alone.
The best way to get good interest rates on an auto loan is to have good credit. Obtain a copy of your credit report a few months before you go car shopping and make sure that all the information on it is accurate. Negative items can be disputed and may be able to be removed, giving your credit a boost before you start shopping for auto loans.
Before you agree to a loan, shop around for the best interest rates. The car dealership may be offering you a higher interest rate than what you could get from a financial institution, so compare loan providers as well. If your credit is less than fair, you may want to consider obtaining your car loan from a federal credit union. Credit unions will also base your interest rates on your credit score, but may take into account other extenuating information that traditional lenders and car dealerships might not.
- Scope Out the Best Discounts
There are many different ways to get a discount on a new car. Often, dealerships give their salespeople incentives at the end of the month, based on how many cars they have sold. By waiting until the end of the month to visit the dealership, you’re more likely to be able to get a deeper discount than if you were purchasing a car at the beginning of the month, simply because the salespeople are more eager to meet those sales goals.
You may also want to wait until the end of the last month of a quarter, or even the year. Many dealerships have big quarterly and yearly sales goals, and salespeople are highly driven to meet those goals in order to get their bonus. If they’re one car under the goal, they won’t qualify, so salespeople tend to get very aggressive with their discounts at the end of the quarter or year to make those goals. You could be on the receiving end of those big discounts if you time your car purchase just right.
- Test Drive the Car
The golden rule of buying a car, especially if it is a used car, is to take it for a test drive before you agree to make the purchase. Not only do you want to drive it to ensure that you’re comfortable behind the wheel, but you also want to make sure there are no major problems with the car. Edmunds.com suggests checking to ensure the car accelerates and decelerates smoothly, the engine and tires don’t produce a lot of noise, that the brakes are able to stop the car smoothly and don’t “grab” suddenly, and that the vehicle is responsive to steering and handling. If you’re experienced with cars or have a friend who is a mechanic, arrange to take a quick look underneath the hood to make sure there are no obvious problems with the car before you buy it.
- Buy With Confidence
Once you’ve done your homework and have gotten the best interest rates and maximum discounts, and have gotten a good feel for the car by test driving it, you can buy your new vehicle with confidence.
Few things are more frustrating than purchasing a car you love, only to find out that you are paying a lot more interest than you planned or there are serious mechanical problems with the vehicle. Be smart about buying your car by following these easy tips and you’ll feel great about your purchase until you’re ready for a new one.