Buying a new car is an experience filled with so many emotions. Excitement for your new ride mixes with the stress of finding the best financial institution or credit union for a new car loan, the confusion of considering an extended warranty and the uncertainty of dealing with a salesperson. It can get pretty overwhelming. Luckily, we’ve made a list of four tips that can make buying your new car go smoothly.
1. Research rates before visiting a car dealer.
Compare low-rate car loans online before chatting with a salesperson to find the lowest car loan rate possible. Your loan and interest rate will vary based on the car loan amount, your credit score and credit history, and the loan term. Ask dealerships if they take trades or if they would be willing to do a lease buyout on your current car. Check online lenders like Lendingtree, Bank of America, or Consumers Credit Union to get the best auto loan rate. Make a list of estimated rates for comparison purposes when you are ready to buy. As long as you do your research ahead of time and come prepared, you’re sure to get a good deal.
2. Find a reliable dealership.
Hondas are well-regarded as reliable cars made by a company known for excellent customer service. But not all Honda dealerships are created equally. If you’re in Ohio, and you want a dealership that can deliver on vehicle price on new and used cars, check out the Ganley Honda Dealership in North Olmsted, OH. This Honda dealership prides itself on fantastic customer service so you know you’re getting the best deal on your new car when shopping at Ganley Honda. To keep your new Honda in tip-top shape, talk to their service advisors while you are there.
3. Pad your budget.
If you haven’t already, begin to keep track of your household’s monthly budget. You can use sheet of paper, a computer spreadsheet, or any number of budgeting apps to keep track of things. Make sure to list all the bills you are currently financially responsible for and the amounts for each. If the bill fluctuates based on usages (like gas or electricity), use the figure you have paid the most for in the past year to give yourself plenty of leeway in your budget. Do not forget subscription services like Netflix or Apple Music. These smaller subscriptions that are $10 to $15 add up in your monthly budget quickly.
Realistically account for the number of groceries purchased each month and add a small percentage for additional flexibility. In general, it’s recommended that your food budget for the month should be 11% of your income, including money for dining out. Most importantly, if you haven’t already, continue contributing to your emergency fund, which should have six- months of expenses per person in your household.
Once you’ve calculated these costs you’ll know how much you can really afford when considering a loan amount for a new car. Take into consideration the car’s other expenses like registration, insurance, and any services costs. Make sure your monthly car payment on your new car loan does not detract from the amount you are putting into your savings or emergency fund for the complete life of the loan.
4. Do your research.
Start by using your most powerful ally: the internet! Go online and compare the cars you like. Many aggregation websites have filtration features that allow you to search for the make, model, and year of the vehicle you like. You can even shop by overall price or monthly payment price. For this, use the car payment you calculated during your budget building step.
As you do your research, make sure to check the EPA Mileage Ratings for mpg information and be sure you can afford the gasoline. Find out the MSRP of the car you like and what the dealership has the retail price set. Look into the application process or consider speaking with an online lender to get pre-approved for a car loan before meeting with a participating dealer. Remember, a car dealership wants to negotiate with you, and shopping the internet is almost always cheaper because dealerships know you can see their competitors’ prices easily. A salesperson over the internet will give their best price without the annoying haggling.
While buying a new car can be a whirlwind of emotions, driving your new car home for the first time is always exciting! Remember these tips and contact a sales assistant for a test drive when you are ready to shop.