With many people downsizing and switching their cars for more economical models, itís worth considering what to look for when purchasing a car.
1) Shop Around
Donít walk into the first dealer you see and buy the first vehicle that catches your eye as you could be missing out on some great offers or discounted prices. Shop around to get a feel of what type of car sells for what prices. There are hundreds of websites, newspapers and magazines that advertise cars on a regular basis, so you can easily find the average price for the model and make youíre looking at.
2) New and Used Prices
Buying cars brand new can be a time bomb where the vehicle depreciates from the moment itís out of the showroom. Depreciation is the value lost over a period of time and within the first year of ownership the car will have depreciated by up to 20%. A new car should never be viewed as an investment as they need regular maintenance and care.
3) The Warranty
Many new cars come with great introductory offers such as a 5 year warranty or in some cases 20 years. Donít let a salesperson distract you with initial great deals. Find out what the warranty covers and what happens when it runs out. Look at the small print and get an additional person to go through it as one sales personís account might not be sufficient. Find out what is excluded from the warranty beforehand.
4) Shop Around For Loans & discount
Most manufactures will offer some sort of discount deal when buying a vehicle new. Enquire about any deals that you might to able to get with the trader or shop online for discounted cars. If you are going to borrow money to buy a car, itís worth shopping around to find the best loan available to you. You should determine how much you can afford and ideally you should aim to pay it off within three years. Contact your bank and a credit union to see if they will approve a loan. They tend to have lower interest rates than other types of personal loan companies.
5) Compare Car Insurance
Once youíve bought your dream car you will need to be insured to drive it. Car insurance has shot up dramatically over the last year and young drivers in particular have a high margin. Get various quotes to see what would be best for you. Car insurance depends on many different factors such as where you park it at night and where you live. Prices can also fluctuate depending on your lifestyle and how often you use the car.