Midway Review

Posts Tagged ‘buy’

Used Car Purchase

When considering purchasing a used car, there are additional steps to take in comparison to a new car purchase. With purchasing a used car there are risks involved such as buying a car that has been previously wrecked, a car with mechanical problems, or a car that may need reconditioning even after the purchase. Obviously these risks increase the older the car may be. Nonetheless, I would recommend taking any used car you are considering to not only a mechanic shop for an inspection, but also to a body shop to guarantee that the car has not been involved in a previous accident. The dealership will offer a carfax or an autocheck to reassure you of this problem, but I have seen cars that have been wrecked that will not show up on these particular reports. So, do you yourself a favor and invest a little extra money prior to the purchase and you could potentially save yourself a lot of money and heartache down the road.

Financing:

Financing your new or used car can be a huge part of the buying process if you do not know how to properly address this crucial step. I always recommend that prior to the purchase that you sit down and figure out what your monthly budget allows you for your new vehicle. Also decide if you are in a position to put any cash down toward the purchase, which will only benefit you. I also recommend going to your local bank or credit union and sit down with the loan officer, which will assist you in deciding what you can afford based on your income and situation. Once the monthly payment has been determined, the loan officer can come up with the best term that fits your needs.

Term, which is the length of time you will be financing, is very important in this process. The longer the term, the more money you will pay for the car and the more likely you will be in a negative equity situation. Negative equity is when a person owes more money on something than it is actually worth. Typically, doing business with your local financial institution is better than doing business with the dealerships financial department. I only recommend doing business with them if the manufacturer is offering a special rate such as 0%. The finance manager at a dealership makes his or her commission on the interest rate he provides to you and also on the inflated prices of services he may try to add to the contract such as extended service plans.

New Car Purchase

Purchasing a new car is typically easier to buy versus a used car because there are not as many issues to research prior to the purchase. When buying a new car, you as the consumer are in the drivers seat because there is typically more than one new car manufacturer in your area. The first thing to do is obviously selecting which car best fits the needs of you and your family.

The best way to accomplish this goal is the Internet. Do not select a car based on looks alone! Narrow down 4-5 cars that interest you and research the safety ratings, resale value, and initial quality ratings of all the cars selected and compare. Once you have narrowed these cars down to a shorter list then you are ready to check prices.

You can also go to the homepage of the manufacturer to which you are considering. The next step is to make contact with the dealership you are considering doing business with and there is usually an Internet manager that you can email to make an appointment. Having a contact at the dealership prior to the sell will significantly reduce the level of stress involved in the purchase of your new car. When you get to the point of working numbers with the salesman it is a good idea not to be rude or unwilling to negotiate. You must remember the salesman is doing his job and this is how he makes his living. A good rule of thumb to getting a fair price on a new car would be to pay invoice price minus any rebates that apply. Anything less than that is even better, but I would not recommend going over the invoice price.