Buying a car for the first time can be a daunting prospect, but taking a methodical and strategic approach will pay off for all the years you own your car. Before you set foot on a dealership lot, it's important to get pre-approved for a loan. This will help you keep the process simple and straightforward when you arrive. When it comes to financing, Reed suggests a five-year loan for a new car and three years (36 months) for a used car.
This is because if your used car breaks down and it's not worth fixing, you're more likely to have repaid the loan by that time. The easiest and most economical way to buy a car is to buy it directly with cash. Buying from an owner can be one of the best ways to buy a car, but there are a few things to keep in mind. Start by researching the vehicles that have caught your eye.
Visit car manufacturers' websites and independent automotive information sites to evaluate the features that are important to you. Consider MSRPs (Manufacturer's Suggested Retail Prices) and invoice prices, then check local inventory listings to see what's available in your area. Many car manufacturers offer discounts to students, members of the military, and even members of certain credit unions. These discounts can be cumulated and combined with any model cash back, which must be deducted after negotiating the price.
When it's time to sit down and talk about pricing, be prepared with the research you've done. Check to see if other dealers offer better deals for your vehicle and look for a price match with your seller. Leasing offers convenience, but only if you're willing to endure restrictions such as mileage limits of 12,000 miles per year or sometimes 10,000 miles per year, diligent vehicle maintenance and care, and in some cases early termination penalties. Leasing is ideal if you prefer to have a new car every few years and put limited miles on your car.
Another advantage for some is when you can cancel your car lease as a business expense.If you want to lower your monthly payments and little or no down payment makes leasing seem like a great deal, consider that it may be beyond your realistic ability to make payments. Try to think seriously about selecting a less expensive vehicle if that's the case.Buying a car can be an exciting experience if you take the right steps. Get pre-approved for a loan before you start shopping around, research vehicles that have caught your eye, take advantage of discounts offered by manufacturers, and consider leasing if it fits your needs.