3 Things You Should Know About Buying Your First Car
Few things are as exciting as buying your first car. It’s a big step in “growing up” or advancing to a new stage in life. Suddenly, you’re at a new level on the food chain – you’ve made an investment that will turn your life around. Now you don’t have to rely on friends or public transportation for a ride anymore, because you have your own car to come and go as you please. But before you rush into a dealership, let’s first look at the things you need to know about car ownership to prepare yourself for your new car.
In many cities, you need your own car, as public transportation is hard to access.
Buying a New Car: The state of car financing in the U.S.A.
Most of us can’t afford to buy a car cash – we just don’t have that kind of money lying around, so we rely on car loans. Most auto loan companies require a 707 credit score in order to approve you for a loan.There’s no shame in taking a loan to pay for your car; in 2017, more than 108 million people in America had car loans, to the tune of $1.129 trillion.
Most people apply for car loans through banks, which amounted to a total of $368 billion in open car loans at the end of last year. That’s enough money to buy 4.9 million Model S Teslas. Not far behind bank loans, credit union loans had the second highest amount of open auto loans, followed by captive auto companies and finance companies.
A car loan is a great step towards building your credit score, which will be helpful in your future. Depending on your credit score, you may qualify for lower interest rates and a higher lending limit.
Still, walking into a dealership can be somewhat overwhelming with the lure of shiny cars and smooth-talking car salesmen. It’s important to be prepared in order to avoid making a mistake.
What You Should Know Before Buying a New Car
When it comes to buying a car, there’s a lot people don’t tell you. Knowing what to ask and understanding how it all works can help save you money. Here’s what you should know.
- Used cars are much cheaper than new
Of course, everyone dreams about that new car smell and being able to show off your late model. However, today’s used-car market is highly competitive and dealers go the extra mile (quite literally!) to stock only the best pre-owned vehicles in the one- or two-year old bracket. Remember, a new car starts to depreciate the moment you start driving it. Therefore, it makes much more sense to look at the bottom line and not only the monthly payments.
- MSRP vs. invoice price
The Manufacturer’s Suggested Retail Price is an important aspect when you buy a new car. The MSRP includes commissions to the salesman as well as other incentives. By researching the invoice price (what the dealership pays) online, you’ll know whether you’re getting a good deal while still offering a profit to the dealership.
- Dealers like to upsell
Car dealers usually work on commissions, so they will do what it takes to earn it. They may convince you to buy a more expensive vehicle or to include certain upgrades and service packages. Know your limits before you walk into the dealership and say no to what you can’t afford.
Remember, you have the power to say yes or no. Don’t ever take a deal that does not suit your needs or your budget. Buying a car is an investment in your financial future, which means that you have the power to make the decisions.
Not ready to drive your new car home from another city or state? Let Nationwide Auto Transportation ship your car home today.