Friday, October 10, 2014

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.

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