Is Buying a New Car Right for You?
The options for buying a car seem endless and that can be overwhelming. Your first decision will be buying a new car versus buying pre-owned. Everyone has a unique set of needs and in some situations, buying brand new is the best option, but when is that?
When buying a new car may be the best option:
Are you the type of person who drives a car “until the wheels fall off”? Buying a new car is a great option if you plan to drive your car for a lot of years. It’s a well-known fact that new vehicles take a big hit on depreciation as soon as you sign the paperwork and drive off the lot. You’ll lose a lot of additional value in the first year as well. In the following years, though, that depreciation rate slows a lot. So if you plan to sell or trade-in your vehicle within a year or two, buying a new model car may not be the best option, but if you plan to pay off the loan and drive your new car for many years to come, the benefits of buying new are likely worth it!
Buying a new car is a good option if you have great credit.
Manufacturers and dealerships often offer great discounts and interest rates to buyers with excellent credit. With good credit, you may even want to consider leasing options. If you like to upgrade your vehicle every several years, don’t plan to drive a lot of miles, and have a tendency to keep your vehicles in great shape, consider all your options.
It’s the season!
If you’re shopping for a new car early in the calendar year, you may be able to snag a great deal on a shiny new vehicle in the previous year’s model. If it’s the first few months of 2021, any unsold 2020 models sitting on the lot are likely to be available at liquidation pricing. Another great car buying season is tax season! Dealers stock up on inventory and offer great deals during the time of year that people are putting tax refunds to use. If you can wait until one of these prime shopping seasons, it’s definitely worth it if you have your eye on a new model!
Safety and modern features are important to you.
Everyone has different wants and needs in a car. When deciding what’s most important to you, you may decide that safety and modern features top the list. These include things like backup assist and rearview cameras, additional airbags, or navigation, and some new features that just offer a ton of convenience. If you live in a state with cold winters, you may prefer the auto-start and seat warming options available in newer models. Decide which features are best for you and then compare the availability of those options in a new model versus those from previous years.
You’re worried about possible repair costs.
Many people, when setting their budgets for buying and maintaining a new car, are concerned about the potential of used vehicles needing costly repairs. Buying a new car means you’ll have a manufacturer’s warranty to cover any unexpected repairs and that brings peace of mind to a lot of buyers. If possible repairs are a concern for you and your family, buying a new car might be the best option!
Buying a New Car – Do’s & Don’ts
Navigate the new car buying process following just a few simple do’s and don’ts and you’ll find yourself behind the wheel, stress-free, in no time at all!
Do your research.
As with any major purchase, do your research when preparing to buy a new car. Information is your best friend and there are tons of websites available to arm you with more information than ever! Look for new car rankings, owner reviews, and YouTube test drive videos. Check into shopper experiences and feedback for the dealership you plan to buy from and research the value of your current vehicle if you plan to trade it in. The more prepared you are, the more confident you’ll be when you’re ready to make your purchase!
Set your budget.
Set a strict budget for yourself for buying a car and then stick to it! Never let a car dealer or anyone else tell you how much car you can afford. Don’t forget to factor in insurance and planned maintenance. Also, consider the cost of any potential aftermarket upgrades like bike racks or premium sound & wheels that you may want to invest in after you buy.
Secure financing before you buy.
When buying a new model vehicle, most people plan to finance. If you aren’t planning to pay cash for your new car, then you’ll want to secure a financing offer before going to the dealership. Today’s car dealers generate a lot of their revenue in their financing offices. As they are taking a cut of any auto loan they offer, they may not always have a buyer’s best interest at heart. Visit your bank or credit union and secure a pre-approval. That way, if the dealership you decide to buy from wants to offer you financing, they’ll be forced to make you a better offer!
Don’t just look at the payment!
Car dealerships like to focus on your monthly payment, but you’ll want to look at costs over the length of the loan. Consider interest payments and fees and always pay close attention to the length of the payment terms. Saving $20 a month may sound like a good plan, but not if you’re stretching payments out over an additional 6 months to get there. Also, don’t be fooled into buying addons based solely on their low cost per month. Paint protectant sounds like a bargain at $8 per month, but over the course of a six-year loan, it will cost you $576 plus interest! Focus on the big picture and not just your monthly budget.
Hopefully, during your research phase, you came across some great reviews and vehicle selections, likely at more than one dealership. Don’t be afraid to shop around and use geography to your advantage. You may find that driving a little farther to another dealership will save you a bundle. The car, truck, or SUV you want may have weaker sales at another dealership than the one that is closest to your home. Most dealers keep inventory up to date on their websites, so do some online comparison shopping and you just might find a great deal!
As exciting as buying a new car is, it can also be overwhelming. Once you’ve done your research, secured your financing, and you’re ready to make your purchase, give us a call, and we’ll make the insurance buying part of the process smooth and easy!