6 Easy Steps to Buying a New Car
Don't even consider approaching a dealer until you know how you're going to pay for the car. Otherwise you're wasting everyone's time, including your own. You do, however, have several choices. To begin, there's that good old-fashioned token of exchange called cash. If you've got it, pay it. No interest charges, no monthly payments, no humungous payouts at the end of a lease.
If there are better ways of investing your money, well then, by all means do so.
Most of us, unfortunately, don't have a lot of ready cash sitting in our accounts, and cars these days are expensive when all the extras are included; thus we're forced to take out a loan or finance through a dealer. Which has made those zero-percent manufacturer loans very appealing. (Normally a heavy rebate is offered as an alternative, in which case you'll pay regular interest rates but get some cash back after the purchase.)
The Achilles Heel in these deals is that such loans are only made to buyers with Class-A credit ratings. Even if your credit is nominally okay you may still end up making a down payment and coughing up interest every month. Further, with so many low-interest deals out there, heavy discounting leads to greater depreciation. The car you buy today may be worth less than you expected tomorrow.
Bank loans have always been considered a better bet and in order to remain competitive, those financial institutions have had to lower their rates on new automobiles. Leasing, of course, is common as a method of reducing monthly costs and for business use where an automobile is a tax-related expense, it makes sense.
But beware: high excess mileage charges at the end of a lease can turn into an unpleasant surprise. As well, deals are harder to find now because financial institutions have taken heavy losses on leasing during the past couple of years.
As we said at the start of this step, whatever method you may use for buying a car, be certain of your ability to get the money before you begin the negotiating process.
Next: Step #4, Finding Your Chosen Car
If there are better ways of investing your money, well then, by all means do so.
Most of us, unfortunately, don't have a lot of ready cash sitting in our accounts, and cars these days are expensive when all the extras are included; thus we're forced to take out a loan or finance through a dealer. Which has made those zero-percent manufacturer loans very appealing. (Normally a heavy rebate is offered as an alternative, in which case you'll pay regular interest rates but get some cash back after the purchase.)
The Achilles Heel in these deals is that such loans are only made to buyers with Class-A credit ratings. Even if your credit is nominally okay you may still end up making a down payment and coughing up interest every month. Further, with so many low-interest deals out there, heavy discounting leads to greater depreciation. The car you buy today may be worth less than you expected tomorrow.
Bank loans have always been considered a better bet and in order to remain competitive, those financial institutions have had to lower their rates on new automobiles. Leasing, of course, is common as a method of reducing monthly costs and for business use where an automobile is a tax-related expense, it makes sense.
But beware: high excess mileage charges at the end of a lease can turn into an unpleasant surprise. As well, deals are harder to find now because financial institutions have taken heavy losses on leasing during the past couple of years.
As we said at the start of this step, whatever method you may use for buying a car, be certain of your ability to get the money before you begin the negotiating process.
Next: Step #4, Finding Your Chosen Car
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