Ready to hit the car lots and get yourself a new set of wheels? Pump the brakes! Diving into the car buying process without a plan is like stepping into a dealership with a “please take my money” sign. It’s easy to get swept up in that new car smell or the latest tech features, but there's a smarter way to cruise through this major financial decision.
Here is some road-tested advice from financial guru Dave Ramsey on what to do and more importantly, not to do while buying a car.
Setting A Car Budget Wisely
Think twice before buying a new car — they plummet in value like a rock dropping off a cliff, losing 60% in the first five years! Unless you’re sitting on a million bucks, stick to a used car. Before you shop, figure out what you can pay in cash. Yes, cash! If you can't buy it outright, you can't afford it. If you’re not there yet, start saving.
Picking The Right Car
Once you’ve got your budget, sift through your options. Start online at local dealerships or sites like Craigslist. Focus on what fits your budget and needs — safety, fuel efficiency, and how it handles different weather conditions. Just because it's affordable doesn't mean it's the right choice for your lifestyle.
Do Thorough Research
Found a few cars you like? Dive deeper. Check the Kelley Blue Book value to ensure you’re getting a fair deal. Obtain the car’s history report using the Vehicle Identification Number (VIN) to learn about past accidents or issues from sites like Carfax or VehicleHistory.com. Even free reports can flag major concerns.
Don't Skip the Insurance Quote
Before you finalize, understand the insurance costs. The type of car impacts your monthly premiums. Chat with your insurance agent to get quotes or shop around for the best rates.
Take It for a Spin
Test driving is crucial. Don't let flashy salespeople upsell you. Stick to what you need and watch out for signs of trouble like odd noises or a rough ride. Make notes on anything amiss to discuss during negotiations.
Get It Inspected
Always have the car inspected by a reliable mechanic before you buy. This step uncovers hidden problems and ensures you’re not buying a money pit. If the seller hesitates at this, consider it a red flag.
Time Your Purchase
Timing can be everything. Shop during holiday sales, at the end of months, quarters, or during the year when dealers are desperate to meet quotas. Late summer and year-end are prime times for deals as dealers clear out old stock.
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