Purchasing your first car can be overwhelming. There are so many options available to you with a simple click of a button. How do you know whether to get a new or used car? An SUV or a sedan? Gas, electric, or hybrid? It is important to have a clear understanding of what vehicle you are interested in buying before you go to the dealership. Doing the research beforehand will help you find the car that best meets your needs and aligns with your financial situation. Here is everything that we recommend you consider before signing the paperwork and driving your new car off the lot:
- Price: For many people, price is the deciding factor when it comes to purchasing a car. According to Kelley Blue Book, the average price of a new car today is $48,008. Before you go to the dealership, figure out how much you can spend a month on car payments. It is important to factor in taxes, registration fees, insurance, and maintenance, in addition to the sticker price of the car. If the fees in your state are too high, you may want to opt for a car with a lower sticker price.
- Loans: While taking out a loan can help you pay for your car, it is recommended that you put a downpayment of at least 20 percent. Experts also recommend saying no to longer-term loans (60 months+) and opting for shorter time frames instead. With the longer loan payments, you end up paying more than the car is actually worth. The quicker you pay back your loan, the less you pay back in interest in the long run.
- New vs used: There are both benefits and drawbacks to buying a new car versus buying an older one. A new car may be more reliable, need less repairs, and will come with a warranty. New cars typically have a greater resale value and lenders charge a lower APR. However, used cars will have lower monthly payments. If you are interested in a vehicle with up-to-date technology features or plan to sell the car eventually, a newer vehicle may be for you. However, if you are on a budget and don’t plan to resell, a used car is the way to go.
- Residence and use: Consider your location and how often you will be using the vehicle. Do you live in a walkable city and only need a car occasionally? Do you live in the suburbs and have an hour commute to work each day? If you only plan to use the car to escape the city once in a while, think about a more affordable, used vehicle. If you plan to use the car for your commute on a daily basis, consider purchasing a newer, more reliable car with good gas mileage. Additionally, if you live in a place with long, snowy winters, a car with all-wheel drive and additional safety technology might be necessary.
- Size: If you are on a budget and only need a car to transport yourself and another person, there’s no need to buy an eight-seater Escalade. If you have or are planning on having children, a car with ample seating and storage would be best.
- Type: Consumers now have the option to choose between a gas, electric, or hybrid vehicle. Electric and hybrid cars produce lower emissions and have lower fuel costs, but finding a charging station can be difficult for electric vehicle owners on the road. If you are interested in reducing your environmental impact, but don’t want to deal with charging your car, a hybrid may be the perfect fit for you.
- Test drive: Whether you are at a dealership or are meeting a seller from Craigslist, it is important to test drive the car before you buy it. You want to make sure you are comfortable in the vehicle and that you like the way it drives. Test driving the car will also allow you to a get a feel for its technology. For instance, if you are interested in a motion sensor for switching lanes or Bluetooth pairing, you will be able to test these features out on your drive.
The process of buying a new car can be made easier if you explore your options and figure out exactly what you want/need in a car before stepping foot in a dealership. You may not be able to buy your dream Porsche this time around, but you can definitely find another car that suits your situation with a little research and determination.