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9 Financial Factors On What To Consider When Buying A New Car

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Purchasing a new vehicle may be exciting, but it’s also involves a great deal of research and tireless test drives. Before you sign on the dotted line, there’s plenty of thinking that you have to do.

It may seem straightforward. All you have to do is identify the car that tickles your fancy and then go for it, right? Wrong. What are the vehicle’s characteristics? Is the dealer reliable?

I don’t mean to burst your bubble, but going with your gut doesn’t always work. This is especially true when it comes to financial matters.

Don’t gamble. Go online and find out as much as you can about your dream vehicle. If you’re not sure about what to type on the search bar, I’ve got you covered too.

Sit back, have an open mind and check out these pointers worth noting before buying that fancy car that you’ve always dreamt of.

1. Do your Research

There are plenty of smooth rides out there. It’s easy to get carried away and forget why you need a vehicle in the first place. That’s where getting your hands dirty comes in- not in a literal sense, of course.

As you’re carrying out your research, consider this: Do you want the car because it’s cool or because it’s worth your green? Be practical. It has to be a ride that you need, rather than something you want.

A perk of being practical is you slash the amount of cash you’ll spend on ownership costs. They include fuel expenses and routine maintenance.

Plus, you’ll spend very little money on car payments, could be a lot less than what you planned for earlier.

Also, your desired vehicle has to be safe. The last thing you’d want is to find out that the brakes aren’t working when you’ve made the big buy. Car dealers can identify someone with zero experience when it comes to cars. And, they can use this to their advantage.

Check out trusted sites like Consumer Reports and J.D. Power. They offer expert opinions and reliable reviews.

Finally, every dollar counts. After you’ve done your research, don’t settle on a vehicle from one dealer. Take your time to look around.

Compare prices. This helps you get the best and most affordable vehicle that’s easy on your wallet or purse.

2. How Much You Earn

This has to be the first factor in your mind. It’ll determine how far you can stretch on a financial basis to get your desired vehicle. Payment for a car requires you to have a specific amount of cash.

Learning your monthly income allows you to set aside an amount of cash that you can spare for the vehicle.

It also allows you to have a plan of how much money you’re willing to spend for your vehicle’s welfare. These welfare expenses include repairs and routine maintenance.

The key to scoring in the car purchasing sector is to pay a hefty down payment. It may sound ridiculous, but it’ll prove to be helpful in the end. It’ll help you get decreased payments each month.

3. Insurance Rates

You’ve identified a vehicle(s) that works for you. Excellent. Now, the next step is to put together all the cars you have your eye on and concentrate on them. Make the necessary calls or put your computer skills to use and find out how much they all cost.

Don’t forget to include your insurance cost each month in your budget. When getting insurance quotes, here are some details you should never leave out:

  • Your insurance history and driving record.
  • The identification numbers of the vehicles.
  • The model, year and make of your preferred vehicles.
  • The purpose of the vehicle -is it for pleasure, business or transportation?
  • Your social security number.

4. Consider Your Payment Options

Don’t have enough money to pay for your car? Don’t worry. As long as you’ve got your eye on the ball, it’ll be yours in the long run. The good news is you can opt to clear the balance in installments.

Although it’s an expensive choice, when compared to paying for the vehicle outright, it’s that or no vehicle at all. There are plenty of payment options that you can choose from, depending on your budget.

When choosing a payment option, choose one that you can work with with the greatest of ease. A great place to start is the bank.

Identify a bank that offers loans to people who wish to buy a vehicle. You’ll enjoy the offer of spending very little money on the later payments.

If you’ve chosen this option, it would be best if you identify as many banks as you can.  Afterward,  put their interest rates into consideration. The one with the least collateral or interests should be the perfect fit.

Also, please read the contract, twice or more times if you have to, before accepting to sign it. If there’s any part you need some clarification, don’t hesitate to ask. Most people ignore the reading part, assuming everything is in order. The results of this could be quit disastrous.

5. Your Credit Score’s Condition

Getting a new vehicle and all the stuff that comes with it can get pretty confusing, especially if you’re new to it all. One of those complicated things you should pay close attention to is your credit score.

Before going any further, let’s understand what a credit score is.

In simple language, it’s your gate pass to loans from banks. A high credit score increases your chances of getting a loan from a bank or two.

They’ll lend you the money because your ability to pay up in good time is visible in your score.

Several credit bureaus; TransUnion, Equifax, and Experian, come up with credit reports. Data analytics companies like FICO then create a score. The bureau calculates your likelihood of repaying money that you borrowed. They do this using the score from FICO.

If you’ve got a credit score that’s below average, the best move to make is to steer clear of opportunistic dealers.

Their deal may sound good at first. But, when you choose to work with them, you’ll be putting a significant dent on your finances now and in the future.

There are plenty of free tools that you can use to determine your credit score. Try any of these trusted ones:

U.S Bank CreditView Dashboard

This simple tool makes the checking process fast and easy. All you have to do is create an account in it if you haven’t got one already.

If you do have one, log in and choose the “Check MyCredit Score for Free” option. It’ll show you what your current score is.

Bank of America

The tool goes a step ahead in the convenience sector by allowing you to access your score. This is possible thanks to the sleek mobile app. You can also get your score online. The only catch is you have to have an account in the bank. Upon enrolling, you receive updated reports of your credit score.

Discover Credit Scorecard

This hassle-free tool makes checking your scorecard seamless. You also get an extensive record of your credit score at the present moment and over recent months as well.

It definitely will wow you to know that it identifies what’s putting a strain on your score. It also offers pointers that you can use to make it better.

USAA Credit Check

USAA Bank has discovered a great way to reward its customers. They have introduced USAA Credit Check.

Membership to the bank is mandatory. And the best part is no credit card is necessary for you to receive updates of your score.

Capital One CreditWise

All that’s required of you to view your score in it is to sign up if you’re new. If you’re already using it, you get to see your latest count, and all the math involved to achieve the final result.

6. Ownership Expenditures

Before buying that car, you have to understand that purchasing it doesn’t mean that payment for it stops. It sounds a bit confusing. I know.

Let me put that in a better way: There are more costs to meet after you make the buy. A dealer’s price for  the vehicle, for example, isn’t the final amount.

Most customers place value on a vehicle based on what it has to offer. For instance, a sleek ride with an average or low gas mileage and limited cargo space is an excellent choice for a few.

There’s more to cost than what meets the eye.

If you want to pay the right amount, a site like Intellichoice.com is the perfect solution.

The site has incredible 3-decade experience in data analytics and automated research. Plus, it gives you all the information you need on current rebates, safety and recalls.

It also gives you Cost of Ownership data. Plus, it offers real MPG that you can use to stay at the top of your vehicle-purchase game.

7. Your Budget

One of the most common expectations of a first-time vehicle buyer is their car should be cool. They also want them to have all those fancy gadgets that we see in James Bond movies.

That’s alright. It’s understandable. I mean, who wouldn’t want a fancy, super-wicked car?

Though it’s a desire for many, it’s time to get logical: it may be beyond what you’ve budgeted for by an infinite sum of dollars.

If you want to complete the process and come out unscathed with regards to finances, setting a budget is critical.  It helps you think clearly.

It also helps you to determine if the vehicle will be a dream come true or a nightmare for you both now and in the future.

Every new day welcomes an advancement in technology. This step forward in technology leads to an improvement in vehicle quality.

People are putting so many enhancements into vehicles that it would be impossible not to notice.

For most vehicle buyers, such enhancements are a kick in the gut. On the positive side, you don’t have to be a part of the mad rush.

All you have to do is stay in your lane and go for a ride that’s gentle on your budget. With time, when there’s an increase in your finances, it’s alright to get that better car.

8. The Cost of Petrol

It’s so easy to focus all attention on purchasing a vehicle. In most times, other essential aspects of the car seem invisible. One of them is the petrol required to get it moving.

Petrol may seem insignificant. But, a look at the current cost of a litre of the liquid will reveal how expensive it is.

Keep your hopes of getting a car alive. With a commercial vehicle that guzzles and runs on little fuel, you have nothing to worry about.

9. Is a Car Loan is Necessary or Not

 A car loan may be a no-no for most people. A headache that comes with repaying the money, not to mention the interest that comes with it, is too much.

But come to think of it, it’s something you should give a thought. It’s a fast way to get that vehicle you’ve always desired.

Car loans are also easier to apply for in comparison to asking for an investment in the bank. The entire process is smooth. It all depends on the type of dealer you’re working with.

And, you get the chance to start a partnership with the lender that could prove to be handy in future.

What’s more, most lenders offer flexible time rates within which you can clear the debt. If you choose to go for it, you’re sure to have the upper hand if you have some savings stashed up somewhere.

One of the main drawbacks of getting a car loan is the amount of time you have to wait. Processing the information and determining if you deserve the credit takes time.  Expect to wait.

A great way to increase your chances is to send your personal information to more than one lender. The faster you get a lender, the better for you. It’s crucial to get a lender a week before visiting the dealer.

A crucial point to note when applying for a car loan is that you have to be honest. They’ll be tons of questions that touch on your employment history and finances. Offering false information can prove to be detrimental in the long run.

You could attract a punishment of clearing the entire debt at once from the lender. Chances of any lender approving your application will also be nil.

One huge blunder among the long list of car-buying mistakes of mistakes is letting the dealership to handle the financial bit. It may get the entire purchasing process over fast, but it makes you appear too reliant on the dealers. There are plenty of reasons why this is wrong.

A car loan is convenient, especially if you have it in check before purchasing the vehicle. Here are some pros of having a car loan with you:

It’s a confidence booster

Imagine showing up at the auto shop, and you’ve got nothing to contribute. The dealer dominates the deal and has the final say. Whatever he says goes.

Even if you’re not too pleased about it, there’s nothing you can do, except wait for it to all end.

Now let’s flip that coin and let you be on the dominating side. With the approval of your lender, you can get the deal done, control the whole process.Plus, should the dealer dispute, guess what? You’ve got the advantage of going to another auto shop.

The manner in which you get into the shop and conduct yourself is different. Even though you may not have the whole experience of getting it done, you know what you want. And you aren’t afraid of getting it.

Your Details are Intact

Getting a car loan from a dealership entails more than you can imagine. No matter how discreet you may be, there’s no guarantee that the dealers will practice it too. It’s even worse when your details aren’t limited to you and the dealer.

Most dealerships do their financial plans via a third party source. This means that your most secret details are at the mercy of some stranger as well.

As compared to a lender, or bank if you don’t trust people, you can rest knowing that your financial details are safe.

If you’ve worked with the lender or bank before, it’s better. This is because you’ve established a business relationship with them already.

You Get a Reasonable Financing Deal from the Dealer

It’s all in the money. A dealer’s perception of you changes when you’ve got some money to get the buying done. You don’t need their money, so they’ll have to treat you as a business partner.

A dealer’s main aim when financing the entire buy is to reap a nice sum. In most times, the sum is more than the standard amount you should pay back. The extra amount is in the loan.

If you’ve got a car loan, they’ll have no choice but to go easy on you. Who knows? You could get an even better deal.

Having a car loan allows you to stay alert and pay only for what you owe. You should not quench some greedy person’s desire for money.

You’ve got a voice

This pretty much sums up why you should have a car loan. Second, to respect, a car loan earns you the right to speak and drive a point across.

The dealer seems to have it all together. This is because they provide the money and car and help out in the down payment department.

If you can get most of the tasks done, you get an advantage over the dealer. You’ve got an unshakable bargaining position and a nod from them.

A car loan shows that you’ve earned the buyer qualification right in an honest way. And you’ve got the lender’s approval to prove it.

You Get the Opportunity to Get Your Credit in Check

 Having credit issues isn’t something that you’d want to walk into an auto shop with. It not only taints your image, but it also makes your chances of getting a ride dim as well.

Choosing between getting a loan before purchasing a vehicle has an advantage. It enables you to put your financial house in order.

An organized credit score gives you the power of getting an excellent deal when purchasing a car.

It’s Got Plenty of Added Benefits

Many times, going to a company for a car loan may have some hidden benefits in it. This is especially true if they’re the same ones selling you the car.

It’s a possibility that they may inspect your vehicle before you can own it. Most of these benefits would have cost you. They also make the loan that you’ll repay worth it.

If you’ve been holding on to the belief that a car loan is a risk, it’s even riskier putting your trust in dealers. From the above points, it’s easy to see that getting a car loan is the way to go.

It may seem confusing at first, but with time you’ll appreciate taking the step in the first place. Remember to be wary of whom you choose as your lender.

Getting the Car of Your Dreams is Possible

If you’ve been putting off that dream to have a car because of finances, or because you don’t know what’s involved, now you do. Sometimes, the best way to achieve what you want is by going for it.

If you need some advice or help, you can get in touch with a professional. There are also many sites available to help you find what you’re looking for.

Finances don’t have to be a hindrance. If you’ve got a source of income, no matter how insignificant it seems, choose to save up towards buying a vehicle. Chances are it may take a while before reaching the desired amount.

Here’s a thought; follow each of the tips above to the letter and do your part. Before you know it, you’ll get that car that you’ve always wanted.

No matter how impossible it seems, with a positive mindset, anything is possible.

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