Buying a car can be one of the most exciting purchases we make in our lives. A car is more than transportation. It says something about us without words. When deciding to buy a car, you must consider more than comfort, looks, and style. It would help if you contemplated the most important factor in car buying, the financial impact. Here are 5 steps to purchasing a car that will save you money without sacrificing quality and style.
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Research
The first stage of buying a car will always be research. A car purchase should never be an impulse buy. It should be well thought out and researched heavily before another step is taken in the process. The two main sources for thorough research are the internet and personal relationships. While the internet can provide the most information on specifics such as safety, features, reviews, and cost, word of mouth can be the most valuable source of information on what car is best for you. During this initial step, you will also begin research on the next step, financing.
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Financing
While ideally, a car purchase could be made with cash, often that is not the case. Most often, cars are purchased through financing via loans. Before you shop for your vehicle beyond research, knowing how you will secure money for the car purchase will be important. Financing should not be decided when you are sitting in front of an eager salesman looking to make a commission. It must be established before you even walk in the door of a dealership or meet with a seller. You should know your buying power, credit score, financing options, and what you can afford. In some cases, you can even go to your bank or other financial institution and get pre-approved for a loan you have negotiated before you shop. This option would let you know how much you can spend and inform your choices.
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Shopping
This step is beyond the research stage. At this point, you should be aware of your preferences and have some options based on desires, financial capabilities, and practicality. It would help if you had all the power in your car-buying decisions, not the salesperson or seller. With the internet, you can often even shop specific cars, dealerships, or private owners without total in-person interaction. This is about retaining the power in your purchase.
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Negotiation
Though you should have made all the decisions before meeting with a salesperson or seller, you can leave room for negotiation. Keep the following in mind during the negotiation:
- Do not buy outside your means or buying power
- Remain in control of the process
- Negotiate the total purchase price, not the monthly payment
- Be aware of the interest rate and negotiate it to the lowest rate possible
Negotiation is often the point where buyers end up paying more for their car than they should. The salesperson or seller has a common goal of getting the highest amount they can. We can’t fault them for this, but we also cannot allow it to cost us money we could have saved.
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Closing
Once you make your final decision and have negotiated the best deal, its time to close. The following are what you need to close:
- Funding for the down payment (if there is one) and tax, title, and license
- Purchasing car insurance
- Ensuring all negotiated points are in the contract
- All documents needed to close
Next to buying a house, car purchases are the most expensive purchase we make. This should not be something we do with light consideration. Follow the 5 steps, and you should be driving away in the car you desire with the best deal you available.
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