Buying cars can be trickier than you thought. Next to houses, cars have an average cost of $36,000.00. Consumers should be forewarned about issues that could arise at car dealerships that could include packed payments, dealer preparation fees, low trade-in values, low credit rating, and so on. Aside from the financial obligation, buyers should always perform their own due diligence.
Consider the following factors when buying a car:
Consider your budget first. Your financial situation should determine the car to purchase, not the other way around. If purchasing your dream sedan will cause financial stress , consider looking for other car models.
2. Shortlist At Least Three Car Dealers
Compare and shortlist car dealers. When you buy new or used cars, keep at least three options based on your set criteria, which could cover affordability, service, and financing options.
Thankfully, these days you can sit comfortably at home and shop for cars online without the in-person commitment.
You can also visit the dealer’s website or use available online comparison tools. Edmunds, a car comparison tool, enables you to filter categories (e.g., price, vehicle type, dimensions, warranty, etc.).
3. Explore Financing Options
Shop around not only for cars but also for financing options. Compare interest rates, modes of payment, refinancing options, extended warranty offerings, and pricing schemes.
Explore all financing options and see where your budget suits you best.
4. Know Your Credit Score
Know your credit rating. Different financing institutions will give you different credit ratings, which are used to determine the interest rate and loan terms.
The average credit score for loan approval of new cars is roughly 700. For used vehicles, it is around 650. A person with a credit score below 600 may obtain loan approval with a higher interest rate .
Knowing your credit score from an independent source in advance sets your expectations and gives you leverage. You can negotiate with a dealership if the loan terms do not seem fair or favorable with your independently acquired credit score.
5. Research About the Car’s Trade-In Value
If you have a trade-in, do some research regarding the car’s trade-in value in advance to help you assess whether any offer price is reasonable. Maximize the use of available online tools (most of which are based on Kelley Blue Book values).
Remember that cars depreciate over time. Knowing the trade-in value of either a new or used vehicle further helps you decide if you can resell it in the future.
6. Ensure the Car is in Good Condition
Perform vehicle checks to ensure that it is functional and in good, working condition. Is the car worth buying? Besides checking the trade-in value and performing history reviews, schedule for a test drive.
7. Check Warranty Features
Ask for the services covered and warranty features. Both new and used cars need maintenance, albeit the latter demands more attention.
Be aware of the routine maintenance that the dealership covers to maximize savings. Remember that these shops may have the right to refuse a consumer for routine checks when the car in question has been serviced by another party.
Go over the details of your default warranty. Also, ask about extended warranties.
Personal loans for new and used cars from Mariner Finance
Need a loan to help with a down payment or to buy a new or used car? A personal loan could come in handy to cover costs.
Apply for a personal loan* , from the comfort of your home.
The information provided in this article does not constitute financial advice and is provided for educational purposes only without any express or implied warranty of any kind. This article is not intended as legal, tax, investment, or any other advice, and Mariner Finance does not offer credit repair services. Consider talking with an appropriate qualified professional for specific advice.
Blog posts are for informational purposes only.