What can i afford?
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Having your eye on a specific car is no help if you
can't afford it. Allocating no more than 20 percent of your monthly household
income for all the cars in your household is a good rule of thumb for car
buying. This figure should include not only the monthly car loan payment, but
all the costs to operate them, including gasoline costs and car insurance. Use
Bank rate's home budget calculator to help you determine your monthly bills and
necessary savings
Decide between new or used.
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Used cars have been in high demand for several
years now, making prices higher overall, while there is a wider array than ever
of inexpensive new cars.
As a result, you may want to consider new and used
cars that fit within your budget. There are trade-offs with each. Buying used
means you can get a more expensive car for your money, but the trade-offs
include not knowing the car's history, a shorter warranty period during your
ownership and higher interest rates.
Buying a new car means you'll get less car features
for the same money, but you get the benefit of the full warranty as well as
often free maintenance and roadside assistance, not to mention lower interest
rates.
Put your buying choices on preference.
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Take that list of cars you've noticed while driving
around town or at your local auto show and start researching them online. Visit
the automaker websites and independent automotive information sites to assess
the car's features that are important to you and get an idea of inventory
available in your area.
Read More From autogeria.com
Don't forget to note the manufacturers' suggested
retail prices and invoice prices when car buying. Choose cars that are at least
5 percent less than your monthly budget to give yourself some room to cover
costs such as fuel, insurance, repairs and maintenance. Create a traditional
paper or electronic file for your research, but don't rush off to the
dealership for a test drive yet
Assess total cost to own.
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Once you have a handful of cars in mind, see if you
can afford them by estimating the ownership costs for each. An independent auto
information website like autogeria.com will help you with cost of ownership
data for your area, but remember that these numbers will vary depending on your
personal situation. Use these numbers to get the best calculation, but do your
own calculation for fuel based on the number of miles you drive annually and
for insurance by calling your car insurance agent to get a quote for your
household. Be prepared to tell the agent the exact car, including model, engine
and sometimes certain options to get an accurate quote.
Consider suitable interest rate.
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While you may be drawn to a certain car or brand
because of an ad for a low interest rate, it's of no use unless you qualify,
and only about 10 percent of car buyers qualify for the zero-percent and
low-interest-rate deals automakers offer. Even then, you may be better off
financially by taking the cash rebate offered and getting financing elsewhere.
Don't visit a dealership until you've researched the best interest rate you can
get. Current interest rates and also check with local lenders, including credit
unions, which are 1 percent to 2 percent lower on average than conventional
banks.
Read More
From autogeria.com
Don't assume dealership financing is the best deal.
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Don't let your eagerness to test drive the cars
that interest you find you at the dealership too soon. Dealers don't just want
to sell you a car. They want to get you to sign a car loan, too. Dealers
typically receive a set fee or a commission on the car loans that they
coordinate, regardless of whether that loan is from the manufacturer or a local
lender they work with. Also, use caution if that offer seems too good to be true
based on your credit or other loan approvals you've received. Dealers will
sometimes indicate they can get you a great rate to get you to sign a contract,
only to gloss over the section that says the car loan rate is contingent on the
loan approval.
Know the invoice price.
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Your car research should have included the invoice
price for new cars or wholesale price for used cars, as well as the
manufacturer's suggested retail price for new cars or the dealer's asking price
for used cars. While invoice pricing on third-party information sites isn't 100
percent accurate, it is a good indicator of what the dealer paid for the car.
And, it's the best place to start your negotiation. Aim to reach an agreement
on the sale price that is close to that number before any applicable discounts
are applied. But, keep in mind that the dealer needs to make at least a few
hundred dollars profit to cover the costs of running the dealership.
Research all discounts.
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You've probably seen automakers touting
"cash-back" deals in advertisements, and these incentives should be
factored into the price you pay. In addition, many automakers also offer
discounts based on the person that is buying the car as well, such as students,
members of the military and even members of certain credit unions. These discounts
can be combined with each other as well as with the cash-back rebates on the
model. In addition, manufacturers sometimes offer dealers $1,000 or more as an
incentive to sell cars that make up an unusually larger inventory. Use a
vehicle information source like copart.com to
see what incentives are being offered to dealers on the models that you are
considering and then ask the dealer to share that cash incentive with you by
further discounting the price.
Be a savvy negotiator.
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When you have done your research and are ready to
visit dealerships, call and ask to make an appointment for a test drive with
the E-marker or fleet manager. That way, if you decide you are ready to buy,
you will be working with someone who is less likely to strong-arm you into a
deal. When you do start to discuss price, keep in mind all the discounts you
researched and forget about trading in your car as part of the deal for the
moment.
It's easier to get the best price for each if you
negotiate the sale price of your new car and the trade-in value of your old car
separately. Make sure you do your research about your current car's value
online in advance so you know whether you are being offered a fair price.
Don't rush the test drive.
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To get the most bang for your buck, you'll want to
keep your car for five years or longer, so take a thorough test drive to make
sure you'll be happy for the long term. Take extra time with the car parked to
adjust the seats and experiment with the controls and the car's other features.
Make sure all of your typical passengers and cargo fit well and the passengers
are comfortable -- even if that means spending some time installing a child
safety seat or putting your golf clubs in the trunk while you're in the
dealer's lot.
Finally,
think about your life five years from now and try to imagine if this car will
suit your needs then in terms of people and cargo.
For more info: Visit www.autogeria.com;
Call us: 08149990999, 08187030888
Headoffice: 26, King George V rd, Onikan Lagos Island, Lagos
