Buying a car or other automobile should be done after careful deliberation. It is one of the most costly purchases you may make in your lifetime, but at the same time it may be your most expensive depreciating asset. A few tips:
• Determine whether you really need a car. Would public transportation work. Would sharing a car work? How about a hitching a ride with a friend and paying them? Many people could use extra income and you save on car expenses. How about renting a car from time to time? If you decide you need a car, write down the reasons you needs a car and what features it needs to have.
• Do your homework on the cost, quality and performance record of the car(s) you are interested in. Compare prices by going online to Kelley Blue Book, Edmunds.com or NADA.com. ConsumerReports.org is even more informative and offers pricing, performance and in-depth analysis and ratings on new and used cars. Stay away from poor quality cars with poor performance history or high maintenance costs whenever possible. Determine your needs. Do you need a car for long distance or just around town. If it is the former, it needs to be much more reliable.
• Determine your budget on the car and stay within the budget. How much can you afford to pay per month? Include the monthly fees, potential maintenance costs and gas mileage over the period of time you expect to keep the car. Some cars may cost less initially, but may save you money in the long run to maintain and drive. For instance, a new Volkswagen Passat may cost more than a new Honda Accord, but the gas mileage and maintenance costs may make the Honda Accord more cost effective over the three to five years.
• Test Drive. This goes without saying, but thoroughly test drive and inspect the car you want to buy. Drive it during the day and at night to get a feel for it in different settings. How does the dash board light up and display? How is the lighting inside the car and when you need to look for things? Sit in the front and the back. If it has a third row, sit in the third row. If you have car seats, put them in to see how they fit into the car. Bring the kids along to see how the car fits them. Does it have all the conveniences you need?
• Lease or Buy. Determine whether you will lease or buy. If you want a new car, leasing has its advantages and disadvantages over buying new. I advise buying a used car in most cases over buying new or leasing new.
• Used or New. You can get a much greater value if you buy used. When buying a used car, you must be even more careful since you do not know the history of the car beyond the number of miles that have been put on the car. Has it been in an accident? What type of wear and tear has it gone through? What kind of condition is it in now? In some cases, maybe there is a vehicle report available on your car which should be able to provide you with a vehicle history. If you are not buying a used car from a reputable dealer that you trust (and even if you are), I advise having the car inspected by a mechanic you trust. There are also mobile inspection services that will go to the location of the car and evaluate the car for you. Also, inspect it yourself as best you can, including checking all the fluids (oil and antifreeze), check under the hood, under the car, the seat belts, all switches, radio, etc. You want to focus on quality and the estimated cost of maintenance for used cars.
• Paying for it. Do your homework on financing options, both at the dealership and outside the dealership. Consider your credit union and your bank. You should review several sources to see what is available. Of course the car should be within your budget.
