GRAND RAPIDS, Mich (WOTV) – If you’re thinking about buying a vehicle, it’s time to start planning and budgeting. Car buying can be costly, and it’s typically the second most expensive purchase most people make next to a home. To avoid spur-of- the-moment decisions, follow these tips for car buying and make sure you get pre-approved before you car shop. Know before you go.
To keep your auto costs in check, a good rule of thumb is to plan to spend no more than 20 percent of your monthly household income on car-related costs for all the vehicles in your household. Remember that the 20 percent number includes all costs associated with your car, such as repairs, maintenance, auto insurance and your car payment. Use the loan calculators like the ones on the Adventure CU website, Auto Loans page, to determine what fits your budget.
Assess your needs
As much as you might like to dream about what you want in a car, it’s best to think more about what you need — not just now, but in the future, too. Functionality should trump flash. Here are some practical considerations to keep in mind:
- How many passengers do you need to carry?
- What type of driving do you do: highway, surface streets, off-road?
- Will you drive in ice and snow?
- Do you have a long commute and, because of that, is fuel economy important to you?
- Do you need all-wheel drive?
- What safety features are important to you?
- Do you need a lot of cargo capacity?
- Will you be using children’s car seats?
- Will you be doing any towing?
- How much garage or parking space do you have?
Best loan for you
Start by getting pre-approved for your loan. With a preapproval, you know what your monthly payment will be and how it fits in your budget. You will also know how much of a vehicle you can afford so you can compare the deals, negotiate on the purchase of the vehicle instead of stressing about what you qualify for. Stay in control of your money.
Know all the costs
You probably have a pretty long list of possibilities for your new car at this point. To narrow it down, look at each car’s ownership costs on independent car-pricing websites. You’ll probably find a wide range of actual ownership costs, even with cars that are priced similarly. Keep in mind that these costs are averages and that your actual costs may vary dramatically, especially for car insurance and fuel. For a more accurate calculation, run your own calculations on car insurance by getting quotes based on your area and driving record.
Weigh the Costs of Ownership
Some cars may be cheaper to buy but more expensive to own. Why? Even if two cars have about the same price, one might depreciate faster or cost more to insure and maintain. Before you commit to a car, estimate its long-term ownership costs. These include depreciation, insurance, maintenance and fuel costs.
All Prep Work Can be Done from Your PC, Tablet or Smart Phone
You can do all your homework without leaving your house. Back in the “old days” you would waste hours at many dealerships. Now you don’t have leave the comfort of your couch. There are many great sites that allow you to relax, research and get quotes.
Know all the rebates and discounts that apply to you
Automakers often tout cash-back rebates in advertising that apply to all buyers, but frequently there are “personal rebates” that only some buyers qualify for that are not as easy to spot. Some examples include savings offered to students or recent grads, current or former military personnel, members of certain credit unions, or other member- based stores. There are also discounts for current owners of the brand they are buying, called a loyalty discount, or a competing brand, called a competitor discount. Traditional cash-back rebates that apply to all buyers are usually offered in lieu of manufacturer financing, so make sure you know all the details and read the fine print before you commit.
Be thorough in your test drive
It’s likely you will own your next car for many years, and that means logging a lot of time in the driver’s seat. Make sure you’ll be comfortable and happy with your car for the long term by ensuring your test drive takes you through all the typical driving situations, and don’t hesitate to ask for more time if you need it. Allocate extra time with the car parked to fully review the seating position, controls and all of the other features. If you carry specific cargo regularly or use car seats for your kids, do a test of those items to ensure a good fit.
Check the car’s history even if it’s new
Check the reliability ratings for the car you’re buying so you’re aware if the model has a history of problems. Then, once you’ve settled on the exact car, get its vehicle identification number, or VIN, and run a vehicle history report, even if it’s new.