Buying a new car can be an emotional road trip for just about anybody. Excitement and apprehension combine to wreak havoc with our rationality the moment we enter the showroom. But acting impulsively can cost you, so be sure to slow down. Just as you have to walk before you can run, you need to pace yourself before you drive off the lot in your new automobile. Here are seven steps to buying a car:
1. Decide if you really need one.
Though a car is a necessity for many people, it isn’t a great investment. On average, a car will lose 20 percent of its value in the first year after you buy it, so consider whether it’s a financial priority for you now.
2. Set a budget
So you still want to buy a new car? Then now is the time to decide what you can afford. Don’t forget to factor in gas, insurance and maintenance costs.
3. Pick three
Narrow the field of models you want to seriously consider to three. Any less than that could hurt your negotiating position. Any more than that will be too much work. Use the Internet and automobile magazines to figure out how much each should cost.
4. Cash, lease or loan?
Make some important financial decisions before you even enter the showroom. If you’re not paying cash, decide if it’s best for you to get a lease or a loan. If you want a loan, will it be an auto loan or a home equity loan? Getting pre-qualified for financing will help when it comes to negotiating with the dealer, which may make its own competing financing offer.
5. Finally, go for a drive
Now that you’ve girded for battle with that emotion-proof armor known as knowledge, you can finally go for some test drives. Bring your note pad to record the information on the invoice, as well as any details you want to remember about how the car itself drives. And remember: there’s no crying in car buying.
6. Go home
Promise yourself you won’t buy the first day you go car shopping. Head home and call, email or fax as many as eight to ten dealerships, asking them to quote you prices on the specific model you’ve chosen.
7. Close the deal
But make sure the deal you’re signing is the one you’ve negotiated verbally with the dealer. Don’t let anyone rush you through the paperwork, and carefully consider any extras (maintenance contracts, extended warranties) tacked on by the dealer at the last minute.
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