Buying your very first car should be a joyous occasion. Even with the ominous clouds of COVID-19 hanging over our heads, you can easily purchase your own set of wheels and enjoy the moment.
Buying a car is a long term investment. To get the best possible deal, you need to do your homework before signing the papers. After all, you don’t want to put your hard-earned money to waste.
So, in this blog, we have outlined some insightful tips to get you started on your car-buying journey.
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- Decide on a budget
Investing in a car will take a significant bite out of your savings and income. Amid the pandemic when times are tough, and the job market has been hit relatively hard, there’s no guarantee of the months ahead. So like all your other investment decisions, you need to consider the risks and plan wisely.
Before you begin to search for the vehicle of your dreams, you need to allocate a budget. More importantly, do you have sufficient funds, or will you need to apply for an auto loan?
The golden rule of investing in a car is to keep your car expenses within 20% of your take-home pay. So when you take into consideration the total car expenses, such as insurance, gas, and repairs, the auto loan payment itself should be between 10 and 15%.
Tip: If you plan on taking out a loan, consider putting a 10% down payment and paying it off within three years.
- Choose a model and make
Once you have a budget in mind, browse online to identify which automobile fits well in your budget, family needs, personal tastes, lifestyle choices, job requirements, etc. Finding the perfect vehicle may be overwhelming, but you need to be flexible.
Tip: You want to buy a vehicle that won’t keep you tied up at the garage every month. Since a brand new automobile isn’t everyone’s cup of tea, a well-maintained second-hand car can be just as good. A pre-owned vehicle that’s up to ten years old is a good bargain.
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- The time of year matters
Just like the seasons influence our choice of clothes, the value of a car fluctuates depending upon the time of year. For example, sports cars are in peak demand during the spring and summer when weather is ideal for outdoor activities, family outings, road trips with friends, and much more.
But as fall turns the corner and the winter chill sets in, trucks and 4x4s are more in demand, making them safer options for traveling on snow and ice.
If possible, wait until the end of the season to buy a car. For example, a convertible has low resale value in the winter. Private owners and dealers will want to get rid of them before the weather changes, and they have to make arrangements to store the car for the winter.
So the best time to purchase one would be at the end of the summer.
Tip: Waiting for the right month can help you save thousands. But did you know that your Costco membership can help you save on a pre-owned car? The Costco Auto Program allows members to purchase used cars from participating dealerships at a discount. Ask about other discounts you can avail of. Every penny counts!
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- Wait for an upcoming holiday
Car dealers offer attractive discounts to promote sales on holidays throughout the year. Make the most out of these opportunities and use holiday sales to your advantage. Watch for exclusive promotions during the holidays, especially on New Year’s Eve, Black Friday, Memorial Day, and Independence Day.
If you don’t find the car you’re looking for in the sale, you can wait for the next one. Remember, a big investment like purchasing a vehicle requires patience and monitoring the price. It will help you recognize when it’s the best time to make a purchase.
Tip: At some time in your car-buying journey, you will need to make an appearance at the showroom. After all, very few people will invest in a car without inspecting it personally. Mondays, Tuesdays, and Wednesdays are usually the best days of the week for a visit.
You’ll be able to get more one-on-one attention from the sales representatives. Moreover, you are in a better position to negotiate favorable terms. So avoid going during the weekend when the dealership will probably be crowded.
- Shop for the current year’s models when next models arrive
You’ll be amazed at how quickly the value of automobiles depreciates. If you wait to purchase your car when it’s on closeout, you’ll be able to secure a better deal. It is because dealerships have limited space. So when newer models roll out, they need to sell off the older stock quickly.
Tip: As the effects of the pandemic are subsiding, factories and assembly plants are reopening. Auto production will catch up by late summer or early fall. Manufacturers will increase rebates by late summer, and dealers will want to clear out older models from their lots.
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(Without relying on your husband and even if are super busy)
- Mode of payment
It hurts to dip into your savings and pull out money to pay for a car. But buying a car on cash has its perks. Often, paying with cash helps you negotiate a better price. So while you can get great discounts, it also means you won’t have to take out a loan or pay interest.
Tip: If you don’t have the cash to pay upfront for the car, then you can look for dealerships that offer alternative payment modes like a car loan, lease, etc. Some dealerships even offer the option to buy cars with cryptocurrency.
These dealerships offer finance plans that are customized to your needs so that you can easily pay for the car. For example, you can negotiate the monthly installments and the period of payment as per your financial limitations.
- Lease turn-ins are great investments
New cars aren’t great investments as they’re expensive and depreciate quickly. However, a well-maintained lease turn-in car is a great alternative. They’re in excellent shape and are generally under five years old. As lease returns are crowding used-car lots, you’re sure to find a good deal.
Tip: You want the biggest bang for your bucks, so don’t forget to bargain. Whether it’s the interest rate or the price of your trade-in or the lease turn-in you’ve fallen in love with, you can negotiate on every step of your car-buying journey.
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Congratulations! You’re on your way to buying your car, the smart and informed way. Owning a car comes with a bundle of responsibilities. You’ll have to maintain the car regularly and pay monthly auto insurance premiums. But don’t let that cloud your joyful moment. It’s all part of the package.
Due to the COVID-19 outbreak, interest rates have been lowered, bringing down the costs of automobiles. Moreover, several automakers have announced flexibility for initial payment plans for new cars. You can make the most of this opportunity.
For now, go ahead and enjoy your ride.
Evie harrison is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences and express herself through her blogs. Find her on Twitter:@iamevieharrison