Going to buy a car?
Eight smart moves for car shoppers These strategies can help steer
you toward a vehicle and financing that will fit you - and away from
possible trouble.
If you plan to purchase a new or use dvehicle, there’re somethings
you should do before you make that major purchase.
Here are eight strategies that can help you save money and make the
process easier:
Consider buying a used vehicle
The inescapable truth is that any new vehicle loses at least 30% or
more of its value the minute you drive it off the lot. Though that loss
has less impact if you keep a new vehicle for at least five years, it
still should enter your calculations.
A vehicle that’s 2 or 3 years old and with low mileage might be a
better deal for you.
Weigh fuel costs
Although there’s no crystal ball to predict where gas prices are
going, there’s little doubt that prices aren’t going to return to $2 a
gallon. So look at vehicles with higher fuel ratings and give some
consideration to hybrids, even though some hybrids cost considerably
more than comparable gas-only vehicles.
Beware of low-cost lease deals
As manufacturers become more desperate to sell cars - 2008 looks to
be another down year overall, with sales of fewer than 17 million new
cars and trucks - you’ll see a lot of offers involving cut-rate lease
payments.
Though these appear attractive, they can trap you if you drive more
than the allotted mileage. Many of these leases allow only 10,000 miles
a year and charge as much as 25 cents a mile for every mile over the
allotment.
Be honest with yourself about how many miles you drive - it’s likely
more than most leases allow.
Get your financial house in order
The last thing most people do is check their creditworthiness before
going car shopping.
Also, check your credit reports for erroneous information, and look
for ways to raise your credit scores, such as by paying off credit
cards.
Remember, though, that closing credit card accounts after paying them
off can actually lower your scores.
Shop for the best loan deal before buying
One way to avoid getting burned on your next car purchase is to have
your financing in place before you set foot on a dealer’s lot.
A good resource should be your credit union, which typically has the
lowest rates. Another place to shop is the Internet, where lenders offer
essentially preapproved loan checks that you can take directly to the
dealer.
Build up your down payment
Too many people these days buy cars with little or no money down and
then are surprised that for the first three or four years of ownership
they owe more than their cars are worth.
A good rule of thumb is to put at least 20% down on any vehicle, in
cash or trade.
Clean up your trade-in
Look at the vehicle you own as if you were a shopper. Is it clean?
Does the paint shine?
Are there dings that could be cheaply fixed? The difference between a
car that looks well cared for and one that looks a little shabby can be
thousands of dollars.
Also, if you still owe money on your trade-in, make sure you can get
enough to pay off the loan. Don’t roll the balance into the loan on your
new car. |