Many people take owning a car for granted until they don’t own one. Having your own mode of transportation is ideal because you don’t need to depend on someone else to drive you around. You don’t need to live your life according to bus schedules. You can go places whenever you want.
If you’re thinking about buying new or used wheels, here are several key considerations and tips to help you make a financially sound decision.
Decide if you’re going to purchase a new or used car. It’s important because there are pros and cons to each option. A new vehicle is less likely to have mechanical problems and, as a new vehicle, will be accident-free. With rare exceptions, a new car will cost more than its used car equivalent.
A new vehicle will also depreciate as soon as it’s driven. Used vehicles have far less depreciation.
New Car? Used Car?
If you plan on driving a newly purchased infrequently, a used car might be a better option. But if you’re buying a vehicle for dependability, such as commuting to work, the increased cost of a new vehicle is a smart choice.
Decide how much you can afford to spend on a vehicle. Don’t waste time looking at vehicles outside of your budget. Make an honest assessment of how much you can afford and keep the commitment.
When considering how much you can spend on a vehicle, take into account your earning and expenses, including your predicted car payment.
If you’re buying a used car, chances are you’ll also have to get the seat covers refitted and replace some of its accessories to make it look and feel new again. The good news is that there are many places where you can get custom-fit accessories for a specific car model for affordable prices.
Get a copy of your credit report from all of the major bureaus and ensure the documents’ accuracy. It is crucial you verify all of your credit report information before submitting loan applications. Erroneous information on your credit report could cause your credit score to drop and affect your chances of qualifying for a loan.
If you need financing for your vehicle, borrowing from a friend or family is a good option. However, if you opt for a loan from a bank, credit union or other financial institution, discretion is imperative. Compare rates and other financial terms. The differences among loan institutions can be severe.
Another suggestion is the use of an auto loan calculator. It can help determine your monthly payment.
Carefully read all of the fine print on your loan agreement. Never sign a legally binding agreement without having a complete understanding of what you are signing. Never assume the details of the loan agreement. Ask questions and consider a legal opinion.
Have a mechanic inspect a vehicle you’re considering since some sellers are more forthright than others about the condition of the vehicle. A trustworthy mechanic will inspect all parts of a vehicle to ensure it’s in proper working condition. If a mechanic discovers problems with a vehicle you’re considering buying, the seller should be responsible for the repair.