Top 10 car buying tips

Buying a car, whether new or used, is a major financial decision. With hundreds of vehicles from an equal number of manufacturers, buying a car could often be a confusing, frustrating, and overwhelming experience, especially if it’s your first car. Every dealership will claim that it’s offering you the best possible deal, which may later turn otherwise.

So what are the things to keep in mind while buying a car? Here are 10 car buying tips that will serve your purpose.

1. Determine your budget

While you may have your eyes set on a specific car, your budget may not fit. The thumb rule is not to spend more than 25 percent of your monthly family income on all cars that you own. This includes loan repayments, fuel, insurance costs, and other associated expenses. The monthly loan repayment shouldn’t be more than 15 percent of your income.

2. New or used

A used car will be obviously cheaper than a new one. Certified pre-owned cars, on the other hand, are in a much better condition than used ones and they often come with a short warranty. If it’s your first car, it may be a good decision to buy a certified pre-owned one. But if it’s your second car you may go for a brand new one.

3. Narrow down your choices

After setting the budget and the type of ownership, check the cars that fit into your criteria. Visit manufacturer websites to check the features and maximum price. If you know someone who already owns one or more of your shortlisted cars, you can inspect the vehicle personally.

4. Assess your ownership costs  

Calculate the cost of fuel you have to buy based on the number of miles you monthly drive. Get an insurance quote on the cars you’ve shortlisted. Also, give the insurance agent the exact car model, engine specification, trim level and other relevant information to get an accurate quote.

5. Weigh the financing options 

Dealers are not only eager to sell a car, they want to arrange your loan too. They typically get a commission on every auto loan they facilitate, irrespective of whether it has been availed from the manufacturer or an institutional lender. Compare their interest rates with those in the market. A pre-approved loan is often a better idea while buying a new or certified pre-owned car.

6. Check the fine print

Even if the loan offered by the dealer seems attractive, don’t grab it unless that fits into your monthly budget. Some super-low interest rates are meant only for specific customers, like members of an auto club or a similar association. In case you qualify for the offer, it’s advisable to take the manufacturer’s cash rebate and get the balance financed from a bank.

7. Get a detailed price quote

Ask your dealer for a detailed breakdown of the price. The breakdown should separately mention the vehicle’s on-road price, registration, taxes, levies, and other charges. Feel free to ask about anything which is not familiar to you. As a customer it’s your right to know what you have to pay for a product.

8. Research on possible discounts

Manufacturers and dealers often give discounts to clear their old inventory. That aside, they announce annual sale events. Special discounts are often available for military personnel, students, government employees and even customers of a bank or financial institutions. These discounts can be combined with cash rebates depending on the car chosen. Check with the manufacturer website and specific dealer for available discounts.

9. Take a test drive

While taking a test drive, ensure that you are driving the exact same vehicle you have chosen. Never rely blindly on salespersons. Take time to drive the car and check all the claimed features first-hand. Overall, the car should offer a pleasant, comfortable driving experience. Remember, taking a test drive doesn’t mean you have to buy that car. It’s your money and you are free to invest in any car you want.

10. Negotiate smartly

Negotiate hard with the dealer. If you’re exchanging your old car, get the highest possible price from the dealer. Compare the price being offered by various dealers. Research in advance about the fair on-road price of the car. Competition is high among all automobile manufacturers and dealers. Take full advantage of it. 

Also read: 10 Easy DIY Car Modifications