Financial Tips for Your Next Car Purchase

If you're a resident in the great Garden State, it's safe to assume that you rely on a car as your main form of transportation. You'll try to keep your car running for as long as possible, but will eventually have to get rid of your old ride. Getting a new car isn't just a major purchase; it's something that can drastically impact your financial situation. There are plenty of car dealers in southern New Jersey, but if you go in to buy unprepared you could pay more than you have to. If you're in need of a car and not a financial crisis, keep this advice in mind as you shop.

Learn the value of your old car

If you're getting a new car you probably think that your old one is piece of junk, but virtually every vehicle has some kind of value. Even if your old car is a bit beaten up, a charitable organization may still be willing to take it. You can also consider selling it to a scrap yard. The scrap metal business is booming, and you could take home a couple hundred dollars if you find a good deal. There are a lot of online sources you can use to determine the value of your current vehicle. The best source to find the value of your trade in South Jersey is your local car dealer since they buy and sell cars all every day.

Think about your budget realistically

If you're only making $35,000 a year, a car that will cost $20,000 may be out of your price range. When you take what you can afford into account, don't just think about the initial price you pay for the car – think about how much you'll pay for gas, insurance, and maintenance like oil changes. Suddenly, setting your sights on a $300 car payment for the most popular model can be a little unrealistic for today’s market.  You may need to weigh your wants & needs in order to get a vehicle that satisfies your needs and meets your budget.

Don't fret over the monthly payment

When some people shop for cars, they make the mistake of focusing too much on their monthly payment. Though it's important finance-wise, the amount of interest on your loan is equally important. If you find a car that has a low monthly payment, but involves a high-interest loan, you will be paying more in the long run and the deal may not be worth it. Remember when you are comparing prices dealer to dealer be sure to read all the fine print so you can compare apples to apples to ensure you are getting your best deal. There are many ways that numbers can be manipulated.

Try to sweeten the deal

A lot of dealerships offer incentives for their customers, such as free maintenance for a year or two or complementary oil changes for the first 10,000 miles. Sometimes, these services can be worth it if you're trying to be cost conscious. Always ask to see what they offer, and see if they'd be willing to throw in any services to sweeten the deal.

Should I Buy or Lease a Car?

A new car is usually the second biggest purchase most of us make, and the biggest for some of us. Since many shoppers have to finance their new vehicle, deciding whether to buy or lease it can be confusing, especially for first-time buyers in South Jersey. There are many different factors to consider before you decide whether buying or leasing is better for you, your budget, and your lifestyle. Here are some of the pros and cons of each.

Benefits of Leasing a Car

By leasing a new vehicle, many shoppers are able to get more car for less money. The car’s monthly payments are typically lower because you’re only paying for use of the vehicle during the term of the lease, and not the actual sales price. For example, on a $30,000 car, you’d finance the entire $30,000 purchase price with a car loan. With a car lease, you only pay a percentage of that. The car’s predicted future value is what it is expected to be worth at the end of the lease, which is its residual value. The residual value is subtracted from the purchase price and what’s left over is what you make payments on. So if the car’s residual value is 55 percent after three years, for example, that means the $30,000 car would be worth $16,500 at the end of the lease. You’d make lease payments on the remaining $13,500 and not the full $30,000, plus interest, taxes and fees.

If you have little to no money to put down, leasing may also be better for you. Many leases require anywhere from $0 to several thousand dollars up front, though the down payment is negotiable. Most advertised lease offers will promote low payments, but require a sizeable down payment, and do not include tax & tags. Tax & tags vary from region to region and must be excluded in advertisements. If you want to put as little down as possible, remember that your monthly lease payments will be higher.

Many leases last about three years, which is typically the length of many new-car bumper-to-bumper warranties. As a result, the car is usually covered under warranty for repairs for the duration of the lease. You still need to maintain the car, though, which includes oil changes, tire rotations and recommended maintenance from the manufacturer. Failure to properly maintain the car during the lease can result in fees when you turn the car in at the end of the lease.

If you enjoy having the newest high-tech features, leasing could be better for you. Since you’d be leasing every few years, each new car you lease will have the latest and greatest technology and safety features. Sometimes you can even get out of your current lease early by using your leased vehicle as a trade in on a new car. If you’ve fallen in love with your leased car and want to keep it, you can generally buy it at the end of the lease by paying cash or by taking out a car loan to finance the balance. Be sure when leasing that you look for the best lease deals in Southern NJ.

Drawbacks of Leasing a Car

Automotive lease contracts limit the number of miles you can drive. You need to estimate how many miles you drive per year so you can determine how many miles to purchase. If you go over that amount, you’ll pay a fee per mile at the end of the lease when you turn the car in. These overage charges can be very expensive so be sure to Contact NJ Car Dealers and consult with a leasing professional.

With leasing, you can sometimes make minor alterations to the vehicle that can be reversed before you turn the car back in, but you generally can’t make any major alterations. Make sure you read the lease contract carefully before signing. 

Another potential downside to leasing is that usually only shoppers with good credit scores will qualify for a car lease. If your credit score is less than perfect, you may want to consider buying a new economy car or waiting to lease until you can clean your credit up and increase your credit score.

Benefits of Buying a Car

If you want to keep your vehicle as long as possible or you drive more than 15,000 miles a year, buying is probably better for you. When you buy, you own the car when the loan is paid off. Until the loan is paid off, the lender owns the vehicle. As you continue to make loan payments, you’re gaining equity in the vehicle.

Another benefit to buying a car is that on most loans you can make additional principle payments on your loan and reduce the interest you pay over the life of the loan, without penalty. When leasing the amount you pay for the lease is pre-determined and does not change even with early or additional payments.

One of the biggest benefits that buying has over leasing is that there are no mileage restrictions. If you have a long commute or do a lot of driving in general, buying is most likely better for you. If you plan on buying a car, be sure to look for New & Pre-Owned Vehicle Specials in South Jersey.

Drawbacks of Buying a Car

When you buy a new car, you roll the dice a bit with its resale value. It’s hard to determine what the vehicle will be worth when you’re ready to trade it in or sell it. With leasing, that future value is predicted up front and put in writing on the contract. If you look at the car’s residual value, which is used to calculate a lease, this will help you determine what it will be worth after a few years if you plan on buying. Sometimes, a buyer will owe more on the car loan than the car is currently worth, which is known as being upside-down on the loan. This is only a drawback if you plan on selling it or trading it in. This makes it more difficult to get rid of the car because you’ll have to come up with the extra money sometimes just to sell it.

Another potential drawback of buying is a sizeable down payment. Many lenders require about 10 to 20 percent down when taking out a car loan. On a $30,000 vehicle, this is $3,000 to $6,000. This can vary based on many factors, though, including your credit score, income, level of debt and more. If you’re not able to save up a sizeable down payment, consider waiting to buy, buying a cheaper car, buying a used car or leasing a new car.

One other downside of buying is that for some people’s budgets, lower monthly payments are a must-have. To get the monthly payments down to a smaller amount, lenders can stretch the car loan out longer. Auto loans can last five, six or even seven years. Remember that you’ll typically pay more in interest the longer you pay on the loan, so if you can pay it off early or take out a shorter three- or four-year loan, you might be able to save some money. A larger down payment will also help lower your monthly payments when you finance.

Make sure you sit down with a calculator and consider your budget, driving needs, lifestyle, and credit history before you decide whether to buy or lease. There are auto lenders who can provide you with financing that works best for you, whether you decide to buy or lease your next vehicle.

Top 3 Financial Tips for Buying Your Next Car

If you’re one of millions of people that call the great Garden State home, it’s very likely that you use a car in your daily commute.  Whether you’re trying to get to work or school, or dropping family members off for their day, a vehicle is essential for getting around New Jersey, as it’s nestled in between two major metropolitan areas (three if you count Washington D.C). Thankfully, there are plenty of used cars in southern New Jersey to choose from. 

However, needing a car and being able to afford a car are two completely different things.  A vehicle is a major financial investment, regardless of if you’re buying it new or used, and it can be difficult to afford.  If you’re thinking about getting another vehicle soon, keep these tips in mind to make sure that you get something you can afford.

Consider your financing options

If you’re going to be taking out a loan to get your car, you can get financing at the dealership or at your bank before you shop. If you go to a bank and get an idea of what they’re willing to loan you, you’ll be able to start shopping within your budget as soon as you start going out to the lots.  It’s usually not that simple though. Most banks will require you to provide them with a VIN for the vehicle you are interested in to tell you whether you would be approved or not. This starts a cycle of back and forth from your bank to the dealership for days, costing you time and money. Although a lot of sources tell you to secure financing before you shop for a car, you will save a lot of time, frustration, and money by securing financing at the dealership. Most dealerships today have secure online credit applications so you can get pre-approved for an auto loan, usually within one business day.

Consider the whole cost

When most people think about purchasing cars, they only think about the initial cost of the vehicle.  However, it’s important to also consider how much money it will take to fuel your car.  Some cars that don’t get good gas mileage, or need a higher grade of gasoline, will end up costing more to drive.  Think about the maintenance tasks you’ll have to perform, and if you’ll need to do anything out of the ordinary to keep it running.  Once you take all of that into account, you’ll have a better understanding of how much your vehicle will truly cost.

Don’t become swayed by low monthly payments

Some people are more than willing to buy a car they can’t afford because of a low monthly payment, but a low monthly payment doesn’t necessarily mean that you have a cheaper car.  Low monthly payments don’t make the car cheaper; it just means that you’re paying less out of pocket on a monthly basis.  In some cases, your low monthly payment can add a lot of interest onto your car, and in the end that could make your car even more expensive in the long-run.

Driving Tips for Jersey Teens

This fall, there aren't just a lot of teenagers going back to school – there are a lot of young people that are getting their licenses for the first time. Most young drivers are just starting out with their financial independence so most are driving less expensive used cars. Some parents and drivers are concerned about safety when they think about driving. There is concern over how safe the driver is and how safe their used car is. If they purchased a Quality Certified Pre-Owned Vehicle in South Jersey, then drivers have one less concern to worry about.

If you live in New Jersey, it's safe to assume that you've heard every joke about the Garden State being one of the worst places to drive in. Teen drivers may feel a little intimidated when they're on the roads but, luckily, teens and parents don't have much to worry about. A recent study ranked the best and worst states for teenage drivers, and New Jersey is the 12^th best place on the road. If your teen is feeling a little apprehensive about driving, these tips may help them feel a bit more at ease behind the wheel:

Be aware of other drivers

New Jersey is the most densely populated state in the country, and over 1,200 people inhabit each square mile. This unique situation means that the roads will be full of people, so it's easy to feel overwhelmed by the amount of traffic. Make sure that you pay attention to the cars around you. Your attentiveness can help make up for someone's carelessness, and that can mean the difference between having and preventing an accident. 

Don't fear the highways

When you're a new driver, going on the highways can seem a bit scary but they're often the best way to get around the state. If you need to get to the shore, hopping onto the AC Expressway is the easiest way to reach the beach. The Garden State Parkway is the best way to get up and down the coast. If you need to go from the northern end of the state to the southern or vice versa, the New Jersey Turnpike will usually get you there fast. If you don't like having to pay tolls, use 295 in South Jersey or 287 up north. Once you get used to being on the highway, you'll wonder why you ever bothered with side streets.

Don't panic if you get lost

There's nothing scarier than missing an exit or turn when you're driving, but when that happens you should remain calm. A missed exit in other states can sometimes mean an extra half hour added onto a trip, but luckily New Jersey drivers don't have to worry about that much. Everything is so close together that missing an exit or turn is a minor inconvenience. Also don't be afraid to use your GPS or map to find a different road if you're stuck in traffic; you'll probably be able to find another faster route without any trouble.