Purchasing a automobile can be quit a daunting and sometimes even a exciting process, next to purchasing a home, it is typically the second largest purchase a person makes in their life, so attempting to keep up with your neighbors when they buy a new or new -used car would not be the smartest thing to do. The only times that you should look to purchasing a new, new-used car would be when your family situation has or will be changing, for example you might be expecting and addition to your family, or your current vehicle is over eight years old or is breaking down and in need of constant repairs, becoming a money pit or more seriously becoming dangerous. When one of these occasions arise then one should do their research before purchasing either one.
What can you afford? Establishing a reasonable budget is critical. The money you have available for a down payment, of which 20% would be optimal, and your potential, budget, for making monthly installments on a loan will determine your car choices.
As a driver, you are probably budgeting for college, a home or other pursuits, so it is important to work with your family to set a realistic target. In doing so, consider whether this is a car just to see you through the next couple of years or whether it will be your traveling companion through 5 years or more. That distinction will determine how new and reliable the car must be.
No question, the best way to save money is to buy used, or new-used as its called nowadays. By purchasing used, you can buy more car, meaning you could afford, say, a mid-sized sedan rather than a tiny econ-o-box. A new car loses almost half its value in the first five years, on average but still has more than half its useful life left. Letting someone else take the depreciation hit is a smart bet. But try to buy the newest car you can, in order to get the most up-to-date safety features. And
If you are a new buyer, financing will be a challenge. Lenders are typically looking for adults with a good credit score, 660 and up, steady employment history, and financial assets, such as a five-figure bank account or a house. So if you're not already established, then in most cases, that will mean a parent or other family member will have to act as a co-signer or even take the loan in their own name.
So, if you are a new buyer and have little to no credit, then the best solution may be to borrow from a family member, repaying them a fair interest rate that they would have seen from their savings account. That would save paperwork, keep the money in the family, and hopefully allow payment flexibility.
Do not run your credit unless you are very serious about an upcoming major purchase. If you wait and run your credit at the dealership or bank, then it will affect your score each time it has been ran. In other words, do not rush into a dealership and run your credit, this is what many salespersons will attempt, they want to run your credit and check if you have a trade that they can steal. Simply bring the copy of your report that you received for free, this should suffice enough until you are satisfied enough to complete the deal, then let them run your report. To save time and also to insure that you look like you know what your doing then you'll need to take the following items in with you:
Do your homework. Now that you have a budget in mind, now comes the fun part: creating a short list of target vehicles. Focus on practical choices—cars that will minimize ownership costs and suit your needs for the next few years.
To right-size your costs, resist the temptation to target sporty, luxury, or large vehicles. They can be costly to maintain and insure, and tend not to get good fuel mileage. The last thing you want is to raid your savings to cover car costs. Instead, look to small sedans and hatchbacks from mainstream brands, or even better, mid-sized sedans. Here's a brief list of vehicle types with their most practical use;
Often times it can be tempting to lust after a high-horsepower car or one with the latest-and-greatest high-tech features, but be practical. Money may be made from trees, but it sure doesn’t grow on them.
To reduce the risk of purchasing a trouble-prone vehicle, identify models with a good reliability record before you begin shopping. Consumer Reports collects data on more than a million cars a year to present reliability information covering the past decade. Such data can point you to cars that have been shown to hold up well over time. Reliability is a key factor, as it speaks to potential costs and inconvenience. At a minimum have the dealership run a CarFax.com on the vehicle that you're interested in. Also note that more often than not the CarFax does not have everything listed that might had happened to the vehicle such as if it was in an accident and it was not reported to the insurance or police department then it will not be disclosed on the report.
Read online reviews of the cars you’re considering from both automobile publications and owner forums. Balance the different perspectives against your preferences, and use the feedback to highlight aspects that warrant closer attention. For instance, complaints about the seat comfort or ride quality can be evaluated on a test drive. Your opinions may differ from those held by others. And ultimately, it is you who will live with the car.
What can you afford? Establishing a reasonable budget is critical. The money you have available for a down payment, of which 20% would be optimal, and your potential, budget, for making monthly installments on a loan will determine your car choices.
As a driver, you are probably budgeting for college, a home or other pursuits, so it is important to work with your family to set a realistic target. In doing so, consider whether this is a car just to see you through the next couple of years or whether it will be your traveling companion through 5 years or more. That distinction will determine how new and reliable the car must be.
No question, the best way to save money is to buy used, or new-used as its called nowadays. By purchasing used, you can buy more car, meaning you could afford, say, a mid-sized sedan rather than a tiny econ-o-box. A new car loses almost half its value in the first five years, on average but still has more than half its useful life left. Letting someone else take the depreciation hit is a smart bet. But try to buy the newest car you can, in order to get the most up-to-date safety features. And
If you are a new buyer, financing will be a challenge. Lenders are typically looking for adults with a good credit score, 660 and up, steady employment history, and financial assets, such as a five-figure bank account or a house. So if you're not already established, then in most cases, that will mean a parent or other family member will have to act as a co-signer or even take the loan in their own name.
- Federal law requires that a individual has the right to see, review their personal credit ratings annually at no charge, you can go to http://www.consumer.ftc.gov/articles/0155-free-credit-reports for more information and a link to the reporting services to receive your report, you may also dispute any of the information if it is incorrect whereas if it is shown to be incorrect then the reporting agencies must update your reports with the corrections at no charge.
So, if you are a new buyer and have little to no credit, then the best solution may be to borrow from a family member, repaying them a fair interest rate that they would have seen from their savings account. That would save paperwork, keep the money in the family, and hopefully allow payment flexibility.
Do not run your credit unless you are very serious about an upcoming major purchase. If you wait and run your credit at the dealership or bank, then it will affect your score each time it has been ran. In other words, do not rush into a dealership and run your credit, this is what many salespersons will attempt, they want to run your credit and check if you have a trade that they can steal. Simply bring the copy of your report that you received for free, this should suffice enough until you are satisfied enough to complete the deal, then let them run your report. To save time and also to insure that you look like you know what your doing then you'll need to take the following items in with you:
- POI or better known as Proof of Income, bring two 2 three months current pay stubs
- POR or better know as Proof of Residence, bring two forms such as; bank statement, electric/water/gas/cable bill, or telephone bill and they must have your name and current physical address on them
- References: Ten names with current addresses and telephone numbers of friends and family
Do your homework. Now that you have a budget in mind, now comes the fun part: creating a short list of target vehicles. Focus on practical choices—cars that will minimize ownership costs and suit your needs for the next few years.
To right-size your costs, resist the temptation to target sporty, luxury, or large vehicles. They can be costly to maintain and insure, and tend not to get good fuel mileage. The last thing you want is to raid your savings to cover car costs. Instead, look to small sedans and hatchbacks from mainstream brands, or even better, mid-sized sedans. Here's a brief list of vehicle types with their most practical use;
- Coupe/Sports Coupe - 2 door vehicle typically used by single or couples because access to rear seat not important
- Sedan/Sports Sedan - 4 door vehicle typically used by families of three or more
- Mini Van - 4 door vehicle used my families of four or more
- Full size Van - Used by families with older children
- Compact - Mid-size SUV - Sports Utility Vehicle - used by families of four or less, singles and couples
- Full size SUV - used by families of five and up to eight
- Trucks - generally used by everyone, but not normally as a primary family vehicle
Often times it can be tempting to lust after a high-horsepower car or one with the latest-and-greatest high-tech features, but be practical. Money may be made from trees, but it sure doesn’t grow on them.
To reduce the risk of purchasing a trouble-prone vehicle, identify models with a good reliability record before you begin shopping. Consumer Reports collects data on more than a million cars a year to present reliability information covering the past decade. Such data can point you to cars that have been shown to hold up well over time. Reliability is a key factor, as it speaks to potential costs and inconvenience. At a minimum have the dealership run a CarFax.com on the vehicle that you're interested in. Also note that more often than not the CarFax does not have everything listed that might had happened to the vehicle such as if it was in an accident and it was not reported to the insurance or police department then it will not be disclosed on the report.
Read online reviews of the cars you’re considering from both automobile publications and owner forums. Balance the different perspectives against your preferences, and use the feedback to highlight aspects that warrant closer attention. For instance, complaints about the seat comfort or ride quality can be evaluated on a test drive. Your opinions may differ from those held by others. And ultimately, it is you who will live with the car.