If you’re getting ready to buy your first car, you’re probably feeling a lot of emotions. It’s an exciting time in your life but is also fraught with uncertainty. You’ve never done this before! What do you do? What do you need? How can you make sure you’ll find the best car for your budget?
Even if it’s not your first car, you may feel some of the same trepidation if it’s been a while. Either way, follow these tips for buying the best car for you and your budget.
1. Your Money — How Much Do You Have?
In a dream world, you find a fantastic car, plunk down the cash and drive into the sunset. Unfortunately, for most, it’s just not possible. Most people have to finance their car purchases and make monthly payments. Before you look at anything, figure out how much you have and how much you can afford to spend.
If you’ve done your homework up to now, you’ve managed to save money for a down payment and maintained a good credit rating. The larger your down payment, the lower your monthly payments will be. And, the better your credit rating, the lower your loan interest charge will be. Both save tremendous amounts of money in the long run.
Figure out how much you can spend on monthly payments. Typically, the highest amount you can spend on a car payment each month is 20 percent of your take-home pay. If you have other loans, a large mortgage payment or other monthly expenses, you’ll want to pay far less than 20 percent of your pay. Run the numbers. Once you have an amount, stick with it.
Check with your credit union or bank about finance options available as well. Many financial institutions offer car loan preapproval and, in most cases, interest rates will be better or at least comparable with those offered at the dealer.
2. But I’ve Always Wanted a Sports Car…
Now that your money situation is clear, determine what type of vehicle you need to get where you have to go. Will the car be your transportation on a long daily commute? Will you drive to school every day? Do your pets travel with you? Are you starting a family?
Sure, you’ve always wanted a sports car. Or maybe a pickup truck. But if your dream car doesn’t fit your current lifestyle save it for later.
3. Research and Compare
Car buying research has gotten much easier. Kelly Blue Book is now online where you can compare brands, models, reviews and prices. Price comparison tools give you an idea of how much a particular model should cost.
“Research the safety ratings and recall information for models you’re interested in as well. You’ll also want to research fuel efficiency.” — Alex Perdikis
Some cars cost more to maintain than others. Use one of the many online search and compare sites to compare specific models and get a clear picture.
Narrow your acceptable list down to three or four models.
4. Go Local
It’s your first car and with that comes a little hand-holding from the dealer. Local dealers who’ve been in business for a while stake their reputations on happy customers. Buying from a local dealer also makes it easier to deal with problems if they occur. Visit several dealerships if possible.
5. Don’t Forget to Drive
All the research in the world won’t help give you one thing you need to know before buying and that’s how a car drives. How does the car steer? Is it comfortable? Can you adjust it to fit your body size? Take a test drive and try out all the features. A car may look good on paper but if it doesn’t feel good when you’re in it, it’s not the car for you.
Alex Perdikis, Koons of Silver Spring general manager and owner, lives in Chevy Chase with his wife and daughters.