3 Steps to Take Before Buying a New Car

Introduction:

If you haven’t already, at some point in your life you are going to want to buy another car. Either your old one has completely tuckered out or you’ve just decided you need an upgrade. Either way, I need you to take a moment to do these three things before you do. These three things can save you a ton of money, keep you from making major mistakes, and help prepare you for what you can look forward to. So let’s jump right into it.

Step 1

The first step to take is to do your homework! I can not emphasize this enough. Please take the time to go to Edmunds.com or a similar website that will allow you to find out the ratings and performance for the car you want. It will tell you common issues, show reviews, and give you all the specifics associated with the vehicle. This will save you from finding out after your purchase that this particular car had transmission issues for the year, make, and model you purchased. So do yourself a favor and check out the car you’re interested in here before you buy! Also please check your CarFax report as well for the vehicle you settle on. Often times your lender will provide free access to this to protect their interests in the purchase as well of yours.

Step 2

Speaking of lenders, that brings me to the next step in the process. Make it your business to get a pre-approval from your bank or credit union. I prefer the credit union personally because it has been my experience that they offer the lowest interest rate more often than not. The reason I say get pre-approved is because you stand a better chance of not being taken advantage of at the dealership. The salesman’s job is to make money! That is it. Most will not be on a mission to save you interest, aka money, or get you the best deal. I know that is what they say, but honestly at the root of that is how much money can he or she make. Once they determine you don’t have financing already, the games begin. You will hear the question “How much do you want your payment to be?” a lot in those conversations which is a ploy to get more out of you. You can focus on total cost of the vehicle only when you walk in with your pre-approved check. So your goal here is to save yourself as much money as possible. You want the best interest rate for your financial position and the least amount out of pocket in total.

Step 3

Finally the last step is to try to purchase a car that is at least three to four years old or more. The logic here is that vehicles lose the bulk of their value in the first three years of operation. When you pay $30,000 for a brand new car, it will lose 20-30% of its value by the end of the first year or $6-9,000. That means you will owe that much more on the loan than the vehicle is worth. That is what it means when you hear people say they are “upside down” on their vehicle. They owe more than the car is worth at that point.

I hope this help you on your journey to buying your vehicle. There is so much more I can share on this. If you would like, I can post a video walking you through the process and what to look out for as well. Comment below if you are interested in a video about how to save in the car buying experience.