How to buy a car
Purchasing a car can be one of the more important decisions that we will make – so spending sometime to understand the main factors that influence our purchase decision can be the difference between a good buy and a bad headache.
We usually spend a lot of time browsing around looking at all types of cars before settling down to make the purchase which will hopefully be the one that we don’t regret. This article was written to help you take the guesswork out of your decision and provide you with a checklist that will guide you carefully through the process.
Things that we know about cars
What are the factors that we usually check about cars? The color, the specs, such as speed, horsepower, engine capacity, type of engine, what the steering feels like, comfort, type of music system, make and model and how well it does on gasoline. We are comfortable checking out these easy to assess factors but are not so comfortable or not aware of some other factors that are equally if not more important.
Lets now look at the some items that we obviously miss out on: – how to buy a car checklist
- Family Decision – If you have a large family buying a car is a family decision so get some insights from other members of your family. This could also determine the size and type of car that you want to purchase.
- Budget for the car – its always best to ensure that you know how much you can afford to spend on a car and if your planning to take out a lease always negotiate the best deal for yourself before making the purchase. Sometimes the financing cost could be more than the cost of the car. It is always better to use some of your savings to finance the purchase of your car and save a significant amount on interest costs that would otherwise have to be incurred. To be able to assess how much you will be willing to spend on a car always keep a tab on your day to day expenses and income using an app or a spreadsheet so that you know your cash flows and know how much you can comfortably budget.
- Check the legal status of the car – is something that can be overlooked by an eager buyer who has just found a good deal. The seller may not have the legal right to sell the car so always double check the legal status of the car with the relevant registration documents to ensure that no complications exists. Remember that if a deal is too good to be true then it usually is!
- Model and make of the car also implies that you should check out the performance history of the car – stay away from cars that have known problems and have been recalled many times. Check the service record of the car that you plan purchase to ensure that it has not been in any major collisions and free of mechanical errors.
- Educate yourself – on the latest technological innovations such as radar sensing, self parking, self driving cars and other GPS enabled services and whether these will affect your purchase decision. Purchasing a car that can be easily upgraded can be a considerable saving compared to purchasing a new car.
- Always think long term – I always assume that I will own a car for at least ten years – this has prevented me from purchasing a car based purely on emotion – i.e. helped me avoid impulse purchasing a car. If I assume that I will be saddled with a car over a longer period – I will ensure that I spend more time and buy the correct car
- Technology – New more energy efficient cars have considerably changed the landscape of what we usually look to in a car – Hybrid, electrical, different type of electrical cars, charging times, battery issues and performance are some of the issues that need to be considered before making the decision. New technology in cars are so great that coming to terms can be daunting but try to simplify things by creating a chart of pros and cons and how important each factor is to you.
- Tax incentives – switching to new zero emission technology could entitle you to tax breaks – so check with the local state tax authorities before buying a car.
- Resale value – most of us do not consider that resale value of a car when making the purchase decision we assume that a ready market exists for each car and can be sold quickly without any major loss in actual second hand market value. Nothing can be farther from the truth as some cars have much higher second hand prices than others. Usually European cars tend to have better second hand prices that other cars but this may not be true for all makes and models so check out the second hand market for the car you wish to purchase before making the purchase decision.
- Trade in options – ask your dealer about trade in options on cars this can sometimes save you a lot of money and hassle of having to sell your own car and also a good way to appraise the resale value of your new purchase – i.e. assess the second hand market value of the car you intend to buy.
- Buying used cars – buying used cars can be tricky as you need to assess the performance of the car and also predict maintenance and service costs which could be avoided by purchasing a brand new car. So here weigh the additional service costs against the cost savings of purchasing a new car. If you can get a new car at a bargain price it always better to choose that option rather than a used car. Consider your new car an investment.
- Running costs – some cars tend to be money pits – servicing some cars can be a nightmare as cost of gasoline increases keeping emissions low can cost a lot. Diesel fuel cars tend to require a lot of attention to keep emissions low. So ask friends and check out car forums on the internet before purchasing a car that could potentially be a money pit.
- Hidden costs – there are some hidden costs of car ownership such as opportunity costs, breakdown costs, replacement costs and hidden breakdown costs (such as car hire) – these issues are more difficult to assess but with experience buying a car that avoid these costs can also be a definite possibility.
It can also be helpful for you to give weights to each item to give more or less importance to each item in assessing your purchase decision.
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