What To Think About Before Financing Your New Car

Posted by: KHTS Articles in News Articles December 12, 2019 - 9:38 am 0 212 Views

The decision to buy a new car is a big one and isn’t something to take lightly. A car is an expensive asset that begins decreasing in value the moment you drive it off the lot. If you’re considering a new car, there are certain things you’ll want to think about before heading to the dealership.

Is it really time to upgrade

A common reason that people begin considering a new car is that they’re worried about the condition of their current car. They may not necessarily want a new car, but they might feel as though they need one. If you’re in a position where you are debating between sticking with your car that is puttering along or buy a new car, consider the following.

There are certain car problems that a mechanic can fix for you at a lower cost than what a new car would cost. If this is your first time your current car is giving you problems, it could be worth visiting a mechanic to get an estimate of how much it would cost to get your car running smoothly again.

However, if you find yourself repeatedly visiting the mechanic for small problems or if you’re starting to experience larger problems with your engine and transmission, it could be time for an upgrade. Signs that your engine and/or transmission are about to die completely include your vehicle guzzling gas, unusual pinging noises coming from your engine, or your car struggling when it shifts gears.

Reasons why you want a new car

Of course, there are other reasons that you may want a new car, other than your current car breaking down. Plenty of people change cars every few years instead of holding on to older cars.

Newer models of cars are often more reliable than older models. If you have a long commute or if you travel frequently, you need a reputable car that isn’t going to die on you. Newer cars also often have safety features that older cars don’t have. You may decide that you want a car that has adaptive headlights or blind spot detection. Parents, in particular, often want the safest car to help protect their children.

Other people might like the style of newer cars over older cars. If you like the style and you’re able to finance it, there is no reason that you shouldn’t treat yourself to a new car.

Speaking of finances, some people actually find purchasing a new car a better financial decision than holding on to their old car or purchasing a used car. Newer cars often come with warranties and are more efficient on gas. Some dealerships will even offer incitatives, such as a year of free oil changes or a tax credit.

The differences between leasing and buying

Some people decide to lease a new car instead of buying a new car. When you lease a car, you put down a small down payment and then make monthly payments that are in accordance with the lease. The payments for leasing a car are lower than buying a car, but you don’t actually own the car. When the lease expires, you have the option of buying the car or returning it to the dealership.

There are people that feel like leasing a car is a waste of money. However, if you aren’t sure if you actually want to purchase a new car or if you want a new car every few years, leasing could be an option for you. With lower monthly payments and lower sales taxes, Lincoln lease deals can actually save you money, especially since cars depreciate in value so quickly.

Leasing a car isn’t for everyone, however. If you’re planning on keeping the same car for years to come or if you’re interested in reselling the car in the future, you’ll want to buy instead of lease. If you’re having trouble deciding between leasing or buying, consider talking to the dealership or to a financial advisor.

How you’re going to finance

Once you decide that buying a new car is your best option, you’ll want to think about finance options before you go to the dealership. Looking over your finance options will provide you with an idea of what you have to spend so that you can look for vehicles that are within your budget.

The first step is to determine what type of auto loan you’re able to secure. You can either work directly with your bank to secure a loan or you can work with an online lender. Getting estimates through various online lenders is a good way to find the best loan option for you. Don’t forget to compare the various interest rates.

Some people wait until they’re at the dealership and then finance through the dealership. However, securing a loan in advance of going to the dealership allows you to explore various options, some of which might be more budget-friendly than what the dealership offers you. Having an idea of your budget can also allow you to successfully negotiate with the dealership.

What kind of car you want

Once you have an idea of what your budget is, it is time for the fun part: trying to determine what type of car you want. Before you go to the dealership, look up models that are of interest to you. Think about what features you want in a car. You might want certain safety features, or you might want something that is environmentally-friendly, or you might have a certain color in mind.

Once you have an idea of what you’re looking for, start shopping around on the websites of the dealerships in your area. Find out what models they currently have on the lot and if any of them match what you’re looking for. You may be able to rule out certain dealerships if they don’t have the type of car you want.

If they do have the car you want, ask the dealership if you can take it for a test drive. You may want to test drive several vehicles to get of how they’ll feel while you’re driving it. Some people make the mistake of only test driving one vehicle and end up overlooking vehicles that could be more comfortable. Going for a test drive will also allow you to discover any flaws the vehicle might have.

Will it impact your insurance

Even after you know what car you want, you shouldn’t immediately jump into buying it. There is a possibility that your new car could be more expensive to insure than your old car. Your insurance company will take into account your driving record, but they’ll also take into consideration the model of your car, what safety features the car has, and how much repairs to the car will cost.

There are many different factors when it comes to figuring out car insurance. You’ll want to talk to your current provider about how purchasing a new car would impact your plan. You might even want to talk to other insurance providers to see if you can get a cheaper rate elsewhere. The reason you’re going to want to consider insurance before you make the purchase is that it could impact how much you’re paying towards the car each month.

You will need proof of insurance before the dealership will let you take the car off of the lot. It is your responsibility to make sure your insurance company is aware of the purchase and to make sure that your policy is adjusted.

Can you afford the cost of ownership

Keep in mind that your car payment and your insurance aren’t the only amounts you’ll be paying. There are also ownership costs that you’ll want to consider.

Think about whether or not you’re going to be able to afford the cost of gas for the vehicle. Most newer cars are more fuel-efficient than older models. However, if you’re switching from owning a car to owning a truck, you may find yourself paying more for gas.

You’ll also want to factor in the maintenance of the vehicle. Routine maintenance includes oil changes, tire rotation, checking your battery, replacing your windshield wipers, and more. While you can do some of this maintenance at home, some maintenance will need to be completed by an automotive specialist.

Also, don’t forget to factor in unexpected costs, such as your windshield cracking or getting into an accident. Ideally, you’ll be able to set aside some money each month. That way, if something does happen, you have the funds to cover the repairs. If financing the unexpected would cause you hardship, you might want to consider taking on a lower car payment so that you can begin creating a savings.

Final thoughts

Purchasing a new car is a huge financial responsibility, but if you make smart decisions, you can make your dreams a reality! If a new car isn’t a possibility at the moment, don’t be discouraged. Consider buying a used car or leasing a car instead.