For anyone looking to purchase their first vehicle, Kelley Blue Book has compiled a Top 10 list of tips to make the process easier and safer.
For starters, KBB recommends that first time buyers establish a realistic budget. If at all possible, it’s best to pay cash for your new ride, in order to avoid financing charges. If purchasing a new or late model vehicle, the transaction price may make this impossible. In this case, calculate your existing monthly expenses, including housing, food, utilities, and miscellaneous expenses. Next figure the monthly cost for fuel, insurance, loan payments and maintenance and repairs. Be honest about all of these expenses in order to avoid getting in over your head on your new vehicle purchase.
As a baseline to help you in figuring your monthly car loan expenses, KBB suggests an estimate of $25 per month for every thousand dollars you’re borrowing based on a 48 month loan. The price drops to $20 per month if you’ll be financing your loan over 60 months. Remember that this is just the cost of financing your purchase, and does not include fuel, insurance and regular maintenance and repair costs.
You should also consider your exact transportation needs. There are a lot of fun, sporty new vehicles on the market, but do they really meet your day-to-day needs?
It’s also easy to think too big. Don’t consider purchasing a full sized pickup truck or SUV on the chance that you might need the hauling or towing capacity at some future date. Unless you actually plan to do a lot of regular hauling, it’ll be cheaper in the long run to rent a truck for those occasions when you do. Put quite simply, KBB cautions, “don’t buy what you don’t need.”
Making your first car or truck purchase is an exciting milestone in your life, and as long as you’re being truthful and realistic about your needs, there’s nothing wrong with also getting what you want in a vehicle. According to KBB, “If getting what you want costs $40/month more, spend it.” You can always make up for a little additional expense by tightening your belt a little in other areas. This is a much better situation than suffering buyer’s remorse over not having some of the features that really matter to you.
Be sure to do your due diligence when it comes to research. There is an amazing amount of information available to car buyers, so use it. Read reviews in auto industry magazines and online, and check out forums and social media to hear what others have to say about the choices you’re considering. KBB also recommends talking to friends, and even strangers you happen to see in the parking lot of your local grocery or gas station, about their ownership experiences.
Don’t be afraid to visit your local dealerships and “kick the tires.” Car salesmen are notorious for being pushy but in most cases you’ll find that they’re just regular people. With few exceptions, they’re genuinely more concerned you being satisfied with your new car purchase than they are about simply making a sale; and with good reason. Auto salesmen and dealerships rely on satisfied customers for referral and repeat business.
When comparing dealerships, be sure to consider factors beyond the sticker price. A good deal from a dealership that doesn’t honor its warranties or delivers inferior customer service after the sale is not a good deal in the long run.
Once you’ve decided on the specific vehicle and options that meet your wants and needs, it’s time to consider price. When it comes to discussing price, have a definite number in mind and stick to it. A good way to do this is by getting pre-qualified for financing from a bank, insurance provider or credit union ahead of time. This doesn’t mean you can’t consider the dealer’s offer, and these days a lot of them are, but it’s always a good idea to have another option from a third-party institution.