Getting a new car with all of the latest features can make you feel like a million bucks. It can also make it seem like you need to spend that much to get everything you want on some vehicles.
Americans are paying record balances for new vehicles today, with some terms lasting six or seven years. That means the average amount borrowed to get a new set of wheels is above $32,000. Even if you have excellent credit, a 4% interest rate will cause you to pay a lot more than the MSRP.
If you need a new car and a used vehicle won’t meet your needs, then these crucial points are essential to consider.
Best Tips to Follow When Buying a New Car
- Buy a car that you can afford right now.
If you have a current car payment that you make each month, it can help to wait until that vehicle loan gets paid off before purchasing another car. You can even save what you think the monthly payment would be for a year to create a better down payment for the next vehicle.
- Don’t be afraid to negotiate.
Start with a lower number than you intend to finalize with – an easy way to find some middle ground is to ask for a 4-year loan at the monthly payment of a 5-year or a 6-year lending product. Be prepared for some back and forth to hopefully come to a price you can be happy with paying!
- Talk to lenders about pre-financing options.
You don’t necessarily need to obtain financing at the dealership. New car loans from your bank or credit union can get you quotes on financing as well, and it could be beneficial to get their loan rates as well as those offered through the dealership to compare your options.
- Don’t forget to factor in the cost of insurance.
Your new car may come with a higher monthly insurance cost. Getting a great deal on your vehicle can make it easier to manage this expense, but it is also forgotten about quite often during the negotiation process. You’ll want to try to get at least 2-3 different insurance company quotes to save as much as possible, and getting insurance quotes on the type of vehicle you are considering before purchasing can help figure out final totals.
Buying a new car doesn’t need to be a headache. When you walk into a dealership with a plan in mind, then you can walk out with the vehicle you want at an incredible price.