Buying a car is never an easy process. For something we depend on on a daily basis you’d think we’d be more educated on the topic, but too many of us are woefully unprepared both when it comes to picking out the right car for our needs and the process of buying that car once we find it.
To at least partially remedy this communal lapse in our knowledge, today we’ve gathered a few of our favorite tips when it comes to buying a new car. These tips won’t shatter your world but they’re undeniably effective. Let’s dive in!
The most important weapon at your disposal when you go into a negotiation is a clear idea of how much you’re willing to spend. With a clear number you can weather almost any negotiating tactic or strategy a car dealer will throw at you so long as you don’t move too far from the number you’ve decided you’re willing to pay. How do you come up with that number in the first place, though? The place to start is with knowing your own monthly income and budget.
We’ve written before about how to most effectively create a budget, but there are a variety of apps out there like Mint that can make the process simple and painless. The rule of thumb when it comes to car payments is that it should be no more than 15% of your total income, so calculate what that number is, and you’ll know both how much you’ll be spending each month and what price range of car you can afford.
Different cars cater to people with different needs, and one of the most important steps to picking the right car to buy is knowing what your needs are. Have six kids? You’ll want a minivan at least. Live somewhere where the roads are regularly icy and windy? Four-wheel drives will be your friend. Commute every day? Mileage will be king.
For some, this will be a simple process, but if you’re having difficulty identifying your particular needs, the best way to discover them is to draw up a journal of where you’ve recently been, how many people were in the car, what the conditions were, etc. Try and pick out any commonalities or recurring trends to get an idea of what your new car will have to endure.
One of the least known uses for a car is actually one of the most useful: using it as collateral for a title loan. Cars are expensive things, and too often that value is just left to rust in the driveway most of the day. A title loan is one way to leverage that value in a proactive way for your financial health. In general, the better the condition your car is in the higher a loan you can secure (up to $10,000), so consider all the tips in this article to serve double duty.