What are the most important things to consider when buying a new car? Here are our top ten, plus some helpful tips and resources.
10. Your budget and cost of living:
After paying your bills, how much money remains to cover the monthly cost of a car, including car payment, car insurance, maintenance, parking, and gas?
9. Down payment and financing:
How much cash do you have to put down on your new car, and how much can you afford to pay per month if you get a loan?
Tips for calculating financing:
Kelley Blue Book says that for every thousand dollars you borrow for 48 months, figure $25/month. Or $20/month on 60-month financing. Every $10K borrowed is $250/month for 4 years, and $200/month for five.
8. Auto Insurance:
Car insurance can be more expensive for new drivers. Get a quote from several insurance agencies before purchasing a car. You also may be able to be added to the policy of a current driver, including a spouse or parent, for a reduced rate.
7. Your lifestyle:
What kind of car fits your lifestyle?
Some considerations include:
- Number of passengers
- Type of driving: highway, city streets, off-road?
- Typical weather conditions, such as rain, ice and snow
- Do you need all-wheel drive?
- Is the car for your daily commute, or more for play?
- Do you drive a long commute and need fuel economy?
- Is having an eco-friendly car important to you?
- How spacious is your garage or parking space?
- Do you have kids? Will you be using children’s car seats? Do you require additional safety features?
- Do you have pets? Do you need a back door or hatch? Easy to clean upholstery?
- How much cargo room do you need? Do you need towing capacity?
Reading online reviews and checking out ratings can help make sure you are getting the best car for the money.
Also take advantage of asking friends and family about their experience with the brands and models you are interested in. Your mechanic can also tell you more about how expensive specific cars are to repair and maintain over time.
5. Get multiple offers:
Once you know which cars you are interested in, you can ask for quotes. Traditionally, car buyers would visit multiple dealerships to compare prices. Shoppers now have the option of requesting quotes online. For instance, on KarFarm.com, you can connect online to local dealerships and get multiple quotes on the cars you are considering.
4. Take a test drive
Once you have connected with local salespeople, you can request a test drive. Typically they will require an active drivers license.
3. Determine what is a fair purchase price
Some useful terms:
- Fair Purchase Price (the price you should pay for a new car, falling within the Fair Purchase range)
- Fair Purchase Range (range of prices most people will pay for the car)
- MSRP: The list price, AKA the manufacturer’s suggested retail price, at which the manufacturer recommends that the retailer sell the product
See the KBB.com Price Advisor to determine the fair purchase price of the cars you are considering.
2. Trade in your old car
1. Remember, shopping for a car should be fun!