Important Tips When Buying a Car

Important Tips When Buying a Car

Need some important tips when buying a car? Purchasing a vehicle is very exciting but can also be stressful or a little overwhelming if you’re unfamiliar with the process. However, Real Simple Car Loan is here to help! Following these tips will make things easier and could make you more confident with your purchase.

  1. Know Your Budget: Before you ever begin shopping, it’s important to know your budget and how your new car payment will fit into that. Once you have determined how much you can afford on a car loan, it will help to narrow down options and let you know which price to shop for.
  2. Find the Right Car: Once you have established what you can afford, it’s time to shop for a vehicle that fits both your wants and needs. It’s necessary to consider your current lifestyle, as well as any changes that could be coming in the foreseeable future, when deciding which car would best suit you.
  3. Familiarize Yourself with Key Terms: Learning and becoming familiar with the key terms used in auto loans can help you better understand the car buying process and make you feel more secure in your purchase.
  4. Know Your Credit Score: Before you begin applying for financing, it’s smart to check your credit score so that you have time correct any error and can shop for loans with a more accurate sense of the rates you may qualify for.
  5. Get Pre-Approved for a Loan: When you get pre-approved, you give the seller more motivation to make you a deal, as they now have to meet or beat the offer you were given in order to do business. It’s also helpful to know how much of a loan you qualify for before you start shopping. Luckily for you, you’re already in the right place!
  6. Avoid Long Loans: The longer the loans, the more financially risky they become. Most longer loan terms come with a higher interest rate, leaving you paying substantially more interest over the entire term of the loan.
  7. Buy Based on Purchase Price: It’s important to make your purchase based on the total purchase price rather than monthly payments, as there could be multiple fees, taxes, or other costs included in the total purchase price. Buying based on monthly payments could lead to unnecessarily long loan terms.
  8. Take Realistic Test Drives: If you are buying your car in person, it’s likely the dealer will have a pre-planned route in mind. However, it’s better to test drive along your regular commute, or find similar roads to the ones you travel daily. Ensure you’re completely comfortable in the car, as it won’t get more comfortable as time goes on. It’s also helpful to bring car seats or any other large items that are frequently in your car to ensure they will fit into your new vehicle.
  9. Know Your Trade-In Value: Having a close estimation of what your current car is worth can help keep you from losing money when it comes time to trade-in. It can also be beneficial to not mention the trade-in until you have already been given an offer, as the trade-in could then help lower your offer even more.
  10. Keep Your Transactions Separate: When negotiating the price of a car, the seller may try to bundle the price of the car and the value of the trade-in, however it is more beneficial to the buyer to do these transactions separately. This could give you a lower offer on your new car and more money on your trade-in.
  11. Don’t Put Add-ons, Warranties, or Taxes on Finance: Including any add-ons, extended warranties, taxes, or fees into your financing will increase the total amount of your loan, meaning higher monthly payments and more interest paid over the life of the loan. Paying these in cash will save you money in the long run.
  12. Consider Refinancing Your Loan: Interest rates fluctuate frequently. So, a few months into your loan term, it may be beneficial to review the current loan market to see if you could get a lower interest rater by refinancing.