Buying a car is one of life’s most exciting moments. It is both thrilling and scary, especially the first time around. Whether it is your first, or your third, whether you’ve just got your driver’s licence, or you finally saved enough to manage a car payment – this is a huge milestone for everyone. And there is no better than the thought of cruising down the streets in the driver’s seat of your new car. No more carpools or reliable transport, just you, your new ride and endless possibilities. There are however several essential steps that you should take into consideration before buying your first car. These steps will ensure you get a great car at a price that won’t hurt your finances. However, it takes a little time and effort to make your highway dreams a reality – there are steps that you can follow to ensure you buy the car that’s best for both your lifestyle and your finances.
Below is a step-by-step approach to buying a car that’s right for you.
The first thing you do before making any large purchases is to make yourself a realistic budget considering both your income and expenses. Analyse how much money you bring home each month and subtract your normal monthly expense to evaluate if you have enough money left to manage a monthly car payment. Be realistic about you want and what you can afford, this way you can sustain the rest of your monthly expenses without sacrificing your financial health.
Shop Your Options
Once you have worked out the magic number you can afford to spend on a new car its time to start shopping. This is one of the best steps when it comes to buying a new car but with all the different options out there picking the right car can feel daunting. You need to consider your lifestyle and what you hope to get out of having your new car – do you want 4X4 able to do long distance for driving through the Karoo? or a Sedan that gets you to and from work? Start by researching cars that meet both your budget and lifestyle, weighing up the pro and cons of all your considered options. Until you have a short list of all the desired cars that meet both your lifestyle and budget requirements.
There are two payment options when it comes to owning a car; leasing or buying, therefore it is imperative to consider all contributing factors before deciding whether it is best for you to buy or lease as both options have several benefits and downsides. You need to evaluate your reasoning for purchasing the vehicle – your budget and your spending behaviour. You need to consider how much you plan to drive and how often you would like a new car. Both options are reasonable but only one is the right one for you and your finances.
Your Credit Score
Knowing and understanding your credit score is essential when it comes to buying your first car – as your credit score has a great influence on the monthly repayments you pay when financing your car from the bank. Being up today on the status of your credit score will give you time to correct any errors or missed payments so you can take the necessary steps to correct them before applying for your vehicle loan. Empowering yourself and improving your credit score can help reduce your monthly repayments.
It is recommended to put a sizeable down payment on the vehicle to help reduce its overall expense. It is recommended to put at least 10% of the cars valued amount down on a used car purchase and 20% down on a new car purchase. Remember the larger the down payment the lower your monthly repayments, the smaller the amount you will need to pay to finance the car and the lower your interest rate will be. Meaning you need to plan ahead of time before purchasing your vehicle to allow yourself some time to accumulate a substantial amount saved.
For the majority of the countries car buyers, buying a car also means taking out a personal loan. Car loans are not difficult to come by, but you want to ensure you get the best possible interest rate, as well as some, save money. This means research and more research. If you are a smart car shopper you will empower yourself as best you can, be reading and researching all the possible terms and conditions for a car loan. Instead of simply going with the first one you come across or the one with the lowest monthly repayment.
Visit Dealers – Lots of Them
Once you’ve picked the car of your dreams and secured a loan its time to start visiting your local dealers – and lots of them. Keep a look out for any special deals or discounts that are being advertised and utilise them. Be prepared to make more than one visit to the dealership before finalising the car of your choice.
They say never judge a book by its cover, and the same saying applies to your new car. While the ideal car may look great in pictures, if you don’t like the way it drives – you’re going to have problems. Get a feel for your favourite car models you’re considering buying by taking them for a test drive – in a variety of different driving and weather conditions.
They don’t call them DEALER-ships for nothing – what you may not know is that the majority of car dealers are open for price negotiations. Use this to your advantage and try your very best to negotiate a better more affordable deal.