Buying a car can be an exciting experience, but it’s important to keep everything in perspective when you do. Getting carried away can lead you into difficulties with finances later down the line or leave you paying more than you should. Here are a few essential tips to bear in mind when you buy a car, helping you to make your purchase in the smartest way possible.
Get a pre-approved loan before visiting a dealership
If you’re looking to use some form of car finance for your purchase, shopping around beforehand will put you in the best position possible. You can find the best car finance product for you and get your loan pre-approved before setting foot in a dealership.
This way, you won’t need to deal with getting a loan via the dealership which could have worse terms for you.
Avoid being sold add-ons you don’t need
While looking at the various models within a dealership and the trim options each car can be bought with, the member of the sales team will likely try to sell you on certain add-ons. These could be premium car features or additional products like extended warranties, tyre protection, paint protection plans, GAP insurance, etc.
The dealership will make a lot of money on these and they may be offering things that you don’t actually need – such as GAP insurance which might not be needed if your finance agreement covered the difference. Do your research on these add-ons before signing anything with a salesperson to ensure you actually benefit from them.
Keep everything as simple as possible
When you’re in the dealership, the salesperson will probably be firing a bunch of questions over at you while you’re making your decision. They might try to get you to discuss any vehicle you might be trading in at the same time as negotiating the price of your new vehicle.
Try your best to only discuss one thing at a time, or else the salesperson might leverage the extra information you give. Settle on a price for the new car you will be purchasing before discussing any trade-in vehicles so you can get the best price possible on both.
Be wary of longer-term car loans
If you are using a car loan to finance your purchase, avoid using loans that span into six or seven-year terms. This goes for both products arranged outside of a dealership and those offered by a salesperson.
With longer-term loans, it may seem like a great idea to spread the repayment as much as possible, so each repayment is lower and impacts your finances less each month. However, you’ll be paying interest for a very long time which will mean you’re paying considerably more for your car in the long term.
Used cars can be much better value
Although the prospect of a new car can be particularly attractive, they lose a considerable amount of their value the moment you drive it off of the forecourt. Searching out a good quality used car can give you a decent saving on your car purchase while still allowing you to get the car you want. So long as you take it for a test drive and are happy with everything, a used car can be a better option in the long run.
Keeping these five tips in your mind when purchasing your new car will help you to make better decisions surrounding your finances. Always consider your financial situation when making a big purchase such as a car and ensure you aren’t overstretching your budget.