Sunday, August 27, 2017

5 things to consider when buying a new car

Happy Sunday friends. The lease on my car is up in February so we'll be in the market again. I love my car now, but it doesn't have the room I need to be taking laundry back and forth to the shore (no washer/dryer there). I am by no means an expert on this, and have done very little research, so here's Dan Cormac on the subject. Dan is a freelance financial journalist who is is passionate about personal finance. Whether you hope to escape the chains of debt, to save for a house, or to retire within a decade, Dan explores the most effective ways you can achieve your financial goals. 
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There are many considerations to make before investing in a car, as the finances you have available determine the car you choose. Of course, you want to buy a car that matches your lifestyle and bank balance. Here are 5 things to consider when buying a new car.

The Monthly Car Payment
It is important to have a firm grasp of your budget before you invest in a new or used vehicle. Review your income against your living expenses such as your mortgage or rent, groceries, utilities, debt payments, fuel and disposable income. Look at your bank statement to identify if you are overspending on a product or service, so you can use the surplus money towards the cost of a car.
Generally, transportation fees should not exceed 20% of your monthly income. For example, if you earn $2,000 per month, your vehicle’s total expenses should not cost more than $400 per month. If your desired car costs more than 20%, return to the drawing board to find a more affordable vehicle for your budget.

Interest
It’s not only the price of the car that can affect your finances, as you will pay interest on a car loan. You must therefore factor in interest rates into your monthly payment, as it can determine the affordability of your chosen vehicle. However, you may be subjected to higher interest rates if you have a low credit score. Consider the interest fees attached to a vehicle before you sign on the dotted line.

An Affordable Vehicle
There are many vehicles designed with both quality and affordability in mind, which will allow you to experience a dependable vehicle for many years to come. Instead of spending a considerable amount of money on an over-priced vehicle, look for a car that has built up a strong reputation for providing luxurious, affordable makes and models, which you can find at Toyota Dunfermline.

Understand Your Trade-in Value
Are you trading an old car before you buy a new or used one? If so, you must understand the trade-in value of the vehicle before you trade in your used car. This will ensure you receive the best possible price for the car, which you can use towards your new set of wheels.

Consider Your Lifestyle
While a car’s style might sway your decision, you must select a vehicle based on your lifestyle. While that two-seater convertible might look great, it will prevent you from enjoying family days out or a road trip with friends. Don’t allow your heart to rule your head and select a car that is both functional and sleek.

Conclusion
There is nothing more exciting than buying a new car; however, you should never allow your emotions to stand in the way of your needs. You must therefore review your finances, understand the trade-in value of your current vehicle, consider interest rates and select a vehicle that suits your lifestyle.

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What's most important to you when car shopping?

Whatever today brings, I hope you enjoy it!


3 comments:

  1. I recently got great advice from a coworker - go ahead and finance at the dealership, then refinance at your local credit union shortly afterward. We recently bought a car and although we got a great deal at the dealership, we refinanced at a local credit union - saved $1500 total and lowered our payment duration by a year. Happy shopping!

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  2. These are all great tips! I'm on car 3 that I've ever owned in my life & the one that I own now I bought completely on m own 4 years ago. I was 24 years old & had never gone car shopping without my dad before so I was nervous but luckily he had taught me those same tips & I managed to walk out with a car at a fair price & low interest. Good thing too because I had barely got my car to start to drive it there to trade in. Now to just keep this car as long as possible before having to go through it again!

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  3. We're in the habit of only getting a new-to-us car when the current one has literally died its last death. Therefore, car shopping is more along the lines of what's available and 'we really should have been saving money so we don't have to make a car payment' and then signing on for whatever financing the dealer has.

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