There‘s so much to consider when buying a car that it’s easy to feel overwhelmed. How much can you afford to pay? What safety features are must-haves? Do you really need leather seats? Before you get decision-fatigue from considering all your options, start by asking yourself these four simple questions.
What is my total budget?
To find your dream ride, you’ll need a realistic budget that includes all the different costs associated with car ownership, including car insurance, gas, maintenance and, if necessary, parking. If you don’t already have a personal budget, there are many online tools that can help you get started. Don’t let a pushy salesperson convince you that a pricier option can fit your budget, if only you’ll extend the length of your loan. Long-term car loans that span six years or more are increasingly common; however, they can lead you to buy a more expensive car that you can afford and often mean paying more interest in the long-run. In addition, because new cars depreciate in value so quickly, you run the risk of finding yourself in a negative equity situation, where your car is worth less than the amount you owe on your loan.
Should I consider leasing?
If you’ve curious whether or not leasing makes more sense financially, one expert says that buying is almost always the better option. The main thing to consider is the equity that you’ll be losing by leasing instead of buying, but there are other factors that could help you make the decision. For example, if you’ll be racking up mileage on your long commute to work, you risk going over the limit set in a lease agreement and paying extra.
Should I buy new or used?
One estimate projects that 59 percent of prospective buyers will purchase a used vehicle this year, which isn’t surprising given that new cars can lose up to 50 percent of their value in the first four years of ownership. Since depreciation slows after a couple of years, buying a car that’s three-to-four years old could provide you with the most value for your money. If you decide to buy used, though, you’ll want to be diligent in your search. Ask to see the car’s maintenance records, consider paying for an independent inspection, and don’t skip out on the test drive.
Is an electric car right for me?
Electric cars are becoming more mainstream; for example, Volvo has pledged that starting in 2019, all its new cars will have an electric motor. Whether you’re motivated by the prospect of a greener ride, or just interested in this growing trend, you might be wondering if your next car should be electric. Although they’re becoming increasingly affordable, you’ll still pay more for an electric car than for a traditional gas-powered vehicle, but that cost could be offset in the long run when you consider the costs of fueling and maintaining a traditional engine. In addition, if you’re buying new, you’ll likely quality for rebates that help lower the price. Finally, remember that you’ll need a way to charge your vehicle – so factor in the cost of installing a charging station at home, and consider whether or not charging stations are readily available in your community.
Whether you’re looking for your first set of wheels, or trading in your current ride for something new, these four questions are a good starting point for narrowing down your list of possibilities. Once you have an idea of what you’re looking for, it’s time to start comparison shopping. Keep your budget and your list of must-haves close at hand – they’ll make many of the decisions for you. Finally, before you make a final decision, make sure you take a few cars on a test drive. All the time you put into researching vehicles will pay off in the long run when you’re finally driving around in your dream car!