5 Things to Remember When Buying a New Car

The end of the year is rapidly approaching, and with December being one of the best months to a buy a car, it might be time to consider trading in your ride. After all, haven’t we all had that dream of walking out on Christmas morning and seeing a brand new car with a big, red bow? While the thought of a new car may stir up excitement, the reality of this large purchase can be overwhelming. That’s why you need to go in with a plan.

Here are five things you should remember before buying a new car:

1. Determine your budget

With low interest rates on auto loans, it’s a great time to buy, but first you need to set a budget. Decide how much you want to put down upfront and then what you’d feel comfortable paying monthly. It’s important not to just consider the price of the car itself; you also take a look at all the costs associated with the car. Be sure to factor in the cost of gasoline, maintenance, and auto insurance. You also should investigate the cost of repairs and tires.

Your budget also will be important in the way it affects your credit score. You likely already know that your credit score will have a great effect on your interest rate. But you might not know that it also will affect your auto insurance. Car insurance providers consider credit to be an indicator of your risk of filing a claim – the better your credit, the lower risk they assign to you.

That means it’s a good idea to keep your finances under control for several months leading up to your purchase. Pay your bills on time, and watch your debt to income ratio. Luckily, if you’re credit isn’t amazing, you can use a service such as DriveTime.com to help you buy a car and then get to work on improving your finances.

2. Decide whether you want to buy or lease

Before you go to the dealership you’ll need to decide what type of car you need and what it will be used for. This will help you determine if it makes more sense to buy or lease. If you plan on putting only a small amount of miles on the car, leasing may be a good option. However, if you plan on driving a lot and keeping the car for more than five years, you should probably go with buying the vehicle.

3. Do your research

Start researching at least two cars before heading to the dealerships. Look online for things like price, standard features, MPGs, and safety ratings. Check out Consumer Reports or a similar service to get detailed reviews of the cars you’re considering. It’s a good idea to also research any deals or discounts currently being offered so you can have them on hand at the dealership. Again, check into operating costs, too.

4. Don’t buy right away

The first time you visit a dealership, don’t plan to buy anything. Just look at the cars you are interested in, maybe take a test drive, ask questions, and get information. After your day or two of visits, you may want to do more research or simply discuss your options. When it comes to a large purchase, you don’t want to make an impulsive decision – no matter what a salesperson says about the car’s availability.

5. Protect your ride

Once you decide on the vehicle, you want to be sure it’s protected. Call your current car insurance company to let it know you’ve purchased a new vehicle so it can be added to your policy. If you don’t currently have auto insurance, then you need to purchase a policy before you drive off the lot. Your lender likely will make this a condition of your car loan.

The dealership may offer you a GAP insurance policy; if you are buying brand new or leasing, you should consider purchasing this coverage – though you often can find cheaper coverage than the dealership will offer. GAP insurance covers the difference between the cash value of the vehicle and the remainder you owe on the loan or lease.

The dealership’s finance manager likely will try to sell you other add-ons as well. Again, it’s best to research whether you can get the same features for less from somewhere else. You can always opt for it later if you can’t find a better deal.

Give Low Rate Insurance a call at 817-635-0375 today for all of your Grand Prairie auto insurance needs.

(Source:AutoInsurance.us)

5 Things to Remember When Buying a New Car

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