Published on November 22nd, 2016 | by admin0
How to Buy a Car
In a sense, buying a car is very easy – assuming you have some money behind you or some method of borrowing some.
Getting a car that isn’t going to bankrupt you though is quite a different challenge and one that many of us find tricky. That’s sometimes linked to the fact that we’re often vulnerable to letting our eyes rule our wallet!
Incidentally, we’re speaking here of cars purchased from dealers. The issues associated with buying from a private individual would be different in some respects.
Here are some top tips about how to avoid getting in over your head to begin with:
- don’t start even looking at cars until you’ve worked out just how much you’ll be able to easily afford each month by way of loan repayments. Be very realistic in this and not over-optimistic;
- think about how much you’ll have available by way of a cash deposit up-front. True, some car dealerships might offer zero deposit type deals but remember they may be available only on restricted models. You may end up paying considerably more in your final ‘struck deal’ price than might have been the case had you had a deposit or cash in your pocket;
- unless you’re flushed with cash, incline towards used or ‘nearly new’ vehicles rather than new ones. Very roughly, many new vehicles depreciate in value by around 20% the second you start them up for the first time. So, why not buy one that’s perhaps only 12 months old and save that 20%? It’s worth thinking about.
At the risk of stating the obvious, remember that the cost of your vehicle doesn’t end with your car finance repayments.
If you need to be careful with money, consider:
- buying a smaller, more economical and perhaps also more environmentally-friendly model;
- do your research on reliability statistics. Without mentioning the names of any particular marques, the online statistics clearly show some are far less likely to have you writing big cheques for repairs than others;
- do the same for insurance rates.
Drive a hard bargain
Car salespeople have a reputation of being ‘sharks’. That’s unfair but do remember that they’re not interested in being your friend, confidante, advisor or anything else.
They’re not out to do the best deal they can for you at the outset either and their only objective is to persuade you to buy one of their vehicles and at the highest possible price. Take note of that!
Do remember though that it is you that’s in the driving seat (or you should be) in terms of the negotiation.
Give yourself the maximum amount of clout in driving a hard bargain by:
- removing any confusion of roles by relying on the salesperson to ‘do you a favour’ on financing – particularly in situations where you’re a non-standard borrowing case. You’re always likely to drive a harder bargain if you have the cash or its equivalent in your pocket before you enter the showroom. You can also walk away much more easily than you can in situations where you’re asking the salesperson to find you a deal;
- if you’re not sure of your ability to get a car loan due to bad debt histories or the shortage of a deposit, consider talking to a car finance broker. It’s not a bad idea anyway as your first port of call, even if you have a good credit history;
- don’t make up your mind to buy a given car in a saleroom before you’ve got the deal you want. The sales guys will spot that a mile off and that will be your negotiating position fatally undermined;
- walk away if you don’t get the deal you want. There will be another one somewhere.
Buying a car is, for most of us, our biggest single purchase after our property. Do your research, be firm-minded and make the right decision to maximise just how far your money will go.