Introduction to Buying a Car
For most people car is third largest purchase they'll ever make,next to house and an education.For this reason,it's worthwhile to spend a substantial amount of time on the process, to confirm that you end up with the best car for at the best price you can get. Before you start,however,it's good idea to ask yourself whether you really need a car.If you already have a car and just think that it's time to get new one,be sure that the purchase really makes sense before proceedings. Is there anything else that you could do with the money that would provide you with the more value? If you are borrowing in order to pay for the car,do you really want to go into debt in order to get a better vehicle?
Once you have decided to get a car,be sure that you understand that car is NOT an investment. There are exception to this rule, such as some antique and collectible cars which can appreciate in value. But for virtually all other cars,their value depreciates with every mile you put on them.So look at the car as an expense rather than an investment. Befor deciding how much you want to spend on the car,first determine how much you can afford to spend.This calculation will depend on your overall financial condition,which you can determine by putting together a buget. Also factor in the estimated value of a trade-in,if you have one.When calculating that cost of the car,include not just purchase price,but all of the associated and ongoing cost:property taxes,insurance,repairs,gas,oil changes,parking meters,tolls,registration,and other miscellaneous expenses.Once you know how much you can afford to spend,you should look at this as a maximum;don't feel compelled to buy the most expensive car you can afford,if sometimes significantly less expensive meets your needs. Most people spend 10-15% of their total monthly budget on all their car-related expenses,but we recommend aiming for10% or below unless there's a good reason to do otherwise.
We are not trying to persuade you not to buy a car,or to buy a less expensive car than you have been planning to.But given that many people spend more money on cars than they should,and end up regretting it,we want to be confident that you've fully through the decision when you decide to take the plunge.
Once you've decided that you definitely want to buy a car and you have an idea of your budget,you should follow these 7 steps:
1. Decide whether to get a new or used car.
2. Decide whether to buy or lease.
3. Arrange for financing,if necessary.
4. Research your options.
5. Conduct test drives.
6. Decide where you'll buy the car.
7. Buy the car.
Once you have decided to get a car,be sure that you understand that car is NOT an investment. There are exception to this rule, such as some antique and collectible cars which can appreciate in value. But for virtually all other cars,their value depreciates with every mile you put on them.So look at the car as an expense rather than an investment. Befor deciding how much you want to spend on the car,first determine how much you can afford to spend.This calculation will depend on your overall financial condition,which you can determine by putting together a buget. Also factor in the estimated value of a trade-in,if you have one.When calculating that cost of the car,include not just purchase price,but all of the associated and ongoing cost:property taxes,insurance,repairs,gas,oil changes,parking meters,tolls,registration,and other miscellaneous expenses.Once you know how much you can afford to spend,you should look at this as a maximum;don't feel compelled to buy the most expensive car you can afford,if sometimes significantly less expensive meets your needs. Most people spend 10-15% of their total monthly budget on all their car-related expenses,but we recommend aiming for10% or below unless there's a good reason to do otherwise.
We are not trying to persuade you not to buy a car,or to buy a less expensive car than you have been planning to.But given that many people spend more money on cars than they should,and end up regretting it,we want to be confident that you've fully through the decision when you decide to take the plunge.
Once you've decided that you definitely want to buy a car and you have an idea of your budget,you should follow these 7 steps:
1. Decide whether to get a new or used car.
2. Decide whether to buy or lease.
3. Arrange for financing,if necessary.
4. Research your options.
5. Conduct test drives.
6. Decide where you'll buy the car.
7. Buy the car.
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