5 Things You Should Know Before Buying Your Next Car

 

So it’s time to buy a car again. Your old ride had a good run, but now you need to get something new. Before you put money down on that next vehicle, though, you’ll need to arm yourself with facts about the car-buying process.

Here are 5 things you should know before buying your next car.

1. How Much do You Owe on Your Current Loan?

If you still owe money on your car loan that you used to purchase your current vehicle, then you’re probably going to get a lot less cash for your car than you think. Any money you get for selling or trading in your car will first go to pay off your car loan before you see a penny.

That’s something you need to know as you consider the next car purchase.

That will take money away from the down payment you want to use for the new car. If you’re using one of the many car buying services available, be sure to make that clear to up front so you’re not surprised when you see your final bill.

2. What’s the Trade-In Value of Your Current Car?

What’s the trade-in value of your current car? If you don’t know the answer to that, then you might be in for reverse sticker shock when you take it to the dealership and some crafty salesman tells you how much it’s really worth. You won’t be happy with that number.

Consult Kelley Blue Book to get an idea of your vehicle’s current value. That way, you’ll have some negotiating power when you go to the dealership and somebody tries to misrepresent the value of your car.

3. What Are the Interest Rates on Car Loans?

Do you know about the current interest rate climate? What can you expect to pay in interest for a car loan?

If you don’t know the answer to that, then that’s a key question you need answered before you start test driving new cars. Higher interest rates mean more cash out of your pocket every month if you finance your new car. You might find that the current interest rates put you over budget.

Also, keep in mind that interest rates are dependent on your credit score. If you have poor credit, you might end up paying a high rate even in an economic climate where interest rates are fairly low.

4. Have You Thought About Buying a Used Car?

If you have ‘t thought about buying a used car, then now is the time to do so. As we’ve seen, cars tend to depreciate quickly. That’s especially true of new cars.

Save yourself some of that depreciation expense by opting for a used car. Just be sure it’s offered with a used car warranty.

5. What Current Deals Are out There?

This is the Information Age. Have you done any online comparison-shopping to see what kinds of bargains are currently on the market? If not, then take a few moments to browse around all the dealerships in your area from the comfort of your home office. You might find that some of them are offering very attractive specials right now.

Buying your next car doesn’t have to be a stressful event. However, you’ll want to exercise some due diligence before you plunge headfirst into the car-buying process. Otherwise you could end up going over budget and spending too much money on a new ride.