Buying a Car Without Losing Your Shirt
by Brenda Estrella
So you’ve decided that you need to buy a car. You’ve already considered alternatives like catching the Metro, joining a carpool or signing up for a Zipcar, but those options don’t work.
Know What You Want
Before you go to your nearest car dealership, you should really get some idea of what type of car will match your needs. All it takes is a few minutes to create a list that will help identify your priorities when shopping for your car. On the top of a sheet of paper, write the following three headings: “Have to have”, “Would be nice to have” and “Don not need”. Now, you can start listing the features under each heading to have a clearer idea of what you’re looking for.
Features to consider are: standard vs. automatic transmission, two door vs. four door, air conditioning, cruise control, sunroof, CD player, driver and passenger side airbags, an alarm, leather and power or tinted windows.
Comparison Shopping
After the previous exercise, you’ll be better equipped to start comparing the prices of cars that have the features you’re looking for. Some people find it helpful to look at guides like Edmunds.com (New or Used) Cars & Trucks Buyer's Guide, the NADA (New or Used) Guide or The Kelley Blue Book. You can search for the different makes and models (by year) that include the features you’re looking for and get a good idea of the average buying price.
Publications like Consumer Reports and The Car Book are good places to find out about the performance, durability and reputation of different cars. It’s also helpful to check the classified sections of local newspapers to comparison shop and to see what, if any, promotions are being offered by car dealerships.
Used Car vs. New Car
In general, new cars are more expensive than used cars, but they do have low maintenance and repair costs, warranties, and usually a lower interest rate (if financing your car). On the other hand, if you are persistent and patient enough in your search, it is possible to find a used car in very good condition for a reasonable price.
Some questions to ask when looking at used cars are: What’s the gas mileage? What kinds of repairs have been made? Has it ever been in an accident? Can I see the records for this car? What type of warranty, if any, does it have? It’s also a good idea to get a mechanic to look at a used car before a purchase to ensure that it doesn’t have any serious issues.
Financing
Other costs that you need to consider, in addition to the price, are finance charges.. If you can’t pay for the total price of a car, then the rest will either be financed through a credit union, a bank or by the car dealership. A good rule of thumb is the longer it takes you to pay off a loan, the more interest you pay and the more expensive the car is. Try to avoid offers that emphasize very low monthly car payments because, in the long run, you may pay much more for the car than it is worth.
To find the least expensive loan, be ready to pay some of the money up front to get a better interest rate. Research online and call different banks and credit unions for an interest rate “quote”. Most likely, you can find a car loan outside of the car dealership that has better terms and interest rates.
Buying a car can be an intimidating experience for many people, but if you learn the basics about the process and what you should be looking for, your car-buying experience will be considerably easier, and maybe even fun!
