Often the experience of buying the first car is confusing and frightening for some people, especially for those who do not know the specifications they want in their cars, or who are confused a lot in choosing the right type for them, so you find them searching and investigating well before making the purchase, lest they regret it in the future.
Author Philip Reed said in a report published by The Grand Island Independent that he recently helped a family friend buy her first car. When Susan first called him, she had not decided to buy a new, used or rented car. She had no idea what her credit score was, and didn't know how to determine which monthly payment she could afford.
Below are the steps she took that ultimately led to the bargain for her first new car.
Set your budget
Susan was working full-time and well-paid, and unfortunately, she was living in Los Angeles, where the cost of rent is high, and he told her that the total payments for her car and all car expenses, like insurance and registration, should not exceed 20% of her wages, and accordingly Susan fixed a monthly payment of $ 350 with a down payment of $ 5,000.
Pre-approval of a loan
The writer made it clear that the hardest thing for him to do was to prevent Suzan from just heading to a car dealership and leaving herself at her mercy.
As a first-time car purchase, you should take as many steps as possible remotely, and that means using email, text messages, and phone calls to shop and bargain with the seller.
But the next step, after setting the budget, was to apply for a loan before going to buy the car, because:
You can find out the interest rate.
This reveals any problems with your credit report.
Pre-approval puts you in a stronger position to negotiate in the agency because you are not worried about funding.
Leasing allows you to drive a more expensive car in lower monthly installments (Shutterstock)
New, used or leased property
Since Susan planned to move to a new apartment soon, she needed her savings for a security deposit, and this made leasing an attractive option for her. Here are some other things she loved about renting:
Leasing allows you to drive a more expensive vehicle in lower monthly installments.
The rental car is under a 3-year comprehensive manufacturer warranty.
At the end of the lease, she had the option to purchase the car at a pre-set price.
In contrast, Reid mentioned that with leasing:
The mileage is often limited to a total of 36,000 miles over a 3-year period.
You can be charged for usage damages at the end of the lease.
After 3 years of making the payments, you will either have to rent the car again or buy it.
The rental is suitable for people who want to drive a new car every 3 years.
But in the long run, buying a good used car will save money.
Choose your car
Susan had no idea what she wanted other than a reliable and inexpensive car.
In this regard, he suggested that she use the car finder tool and then filter the options according to her preferences.
And since she had strong environmental concerns and wanted to reduce emissions and save gas, she reviewed all the hybrid cars on the market and eventually chose a Toyota Prius, this type of basic research is helpful, because it puts protective barriers around your research.
It is better to apply for a pre-approved financing application before choosing a car (Shutterstock)
Make your best deal
Susan ignored Reed's advice about remote shopping, and corresponded with him after visiting the local Toyota dealer. She saw a used Prius advertised for $ 18,795, however, when she got there, the salesperson told her that the advertised price didn't include a lot of extra charges and that The real price was $ 28,000.
Reed told her this proved this agency was untrustworthy and recommended her to leave.
However, Susan soon sent him a picture of a new Prius lease deal.The starting fee of the lease was $ 1,500 with a monthly payment of $ 298 and a total mileage of 36,000 miles, Reed told her to make sure sales tax and other fees were included in that payment. Monthly.
Keep your deal as it is
The writer told Susan that the Prius deal looked good as long as she turned down any additional fees at the Office of Finance and Insurance, and warned her that she might come under pressure to purchase a rental protection plan and guarantees for wheels and tires - these are high-profit items for the agency and seldom used by consumers.
The best advice learned
Let your budget lead you to the right car instead of increasing the budget to buy an expensive car.
Apply for pre-approved financing. You will know what you can afford and may be able to negotiate a better rate with the agency.
Use new online tools to purchase cars to avoid being under pressure at the dealership.
If negotiating intimidates you, shop on websites of online retailers who cannot bargain.
Above all, try not to be afraid of what some people might regard as authority figures, such as a sales manager or chief financial officer, and be prepared by doing thorough research, and let the knowledge support you.