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How to Choose the Right Car

Friday, December 28, 2012
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The first step in buying a car is determining what kind of car is right for you. There are a number of factors to consider when deciding which make, model, and buying style is the best fit for your life.

Realistic Needs

The most important factors you need to consider when deciding on the right car to buy are the realistic, day-to-day, needs for your vehicle. The car you buy needs to become a functional part of your everyday life and the most fashionable options aren't always the most functional. Consider where you will be driving most often, how many passengers you are likely to have, and the tasks you need to attend to while driving. For example, a sporty two-seater is not going to address the realistic needs of a family with two small children and a dog. Knowing what you need from the car you buy will help narrow the field to only the cars that have the right amenities.

Initial Cost

Take a look at your financial situation and determine the most you can afford to pay a month for your new car. Keep in mind the average interest rates people with your approximate credit history and income receive when calculating what price point fits your budget. Also, look at what you can afford to put forward as a down payment and the lowest amount you are likely to receive for any vehicle you are planning on trading in to the dealership.

Once you have a clear picture of your financial situation, you can determine whether a new or used car is the right choice. Used cars are usually less expensive, while new cars can be customized to your exact specifications and cost more.

On-going Cost

Every car costs a different amount of money to drive and maintain. When researching what kind of car is the right car for you, consider your monthly and yearly budget for car expenses. Insurance, registration, and routine maintenance costs vary based on the kind of car you own. You should take the time to research the on-going cost of ownership for each car you are considering.

While trying to determine what kind of car is the right fit for you it is best to remain realistic about your needs and financial situation. Careful consideration of these factors will narrow the shopping pool to a few likely candidates for test drives.


Tips on Buying a Car with Poor Credit

Tuesday, December 25, 2012
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The ability to buy a car you need for day to day life can be made more difficult by a bad credit rating. However, there are tips you can keep in mind while trying to buy a car that can help you overcome bad credit and get on the road.

Know Your Credit Score

Always have a clear picture of your credit rating and other financial realities before setting foot in a car dealership. Know how bad your credit score is and what kind of payments you can afford with your current income. Gather pay stubs and tax returns so you can show proof of your income, which can help qualify you for financing.

Research Interest Rates

Have an idea of current interest rates on financing offered by both dealerships you’re going to shop with and banks in your area. Bad credit will mean your interest rate with be higher than what someone with good credit would receive. This does not mean you cannot make an effort to haggle the interest rate down, and the first step is finding out what is, and is not, a fair rate.

Recruit a Cosigner

A friend of family member with a better credit rating can help you finance the purchase of a new car by agreeing to cosign your loan. A cosigner becomes a secondary responsible party for the repayment of the loan, which means your timely payments can have a positive impact on their credit as well. Keep in mind, however, that if you do not make your payments on time your cosigner will be held responsible and suffer a negative hit to their credit report.

Have the Down Payment

Make sure you have enough money saved up to make the down payment on the car you want to buy. Financing options that do not ask for a down payment will often not be available if you have bad credit, or will come with an astronomically high interest rate. Also, dealerships and banks are more likely to approve your loan if you are able to make a decent down payment.

Bad credit does not need to stop you from finding an affordable car you can purchase. Do solid research and know the reality of your financial situation in order to work around your bad credit history.


Advantages of Trading in a Used Car

Friday, December 21, 2012
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When you purchase a new car the question of what to do with your existing car always comes up eventually. There are a number of benefits to trading your used car in to the dealership when you purchase the new vehicle.

Help with the Down Payment

The value a dealership assigns to your car can often be used toward the down payment you need to make. Any amount of positive equity you have in the vehicle is put toward the down payment. Basically, whether you own the used car you are trading outright or owe less than the car is worth your down payment is reduced by the dealership accepting your trade. This means you need to have less cash on hand when you want to drive a new car home.

Unpaid Financing

As previously stated, you can trade in your current used car even if you still owe a balance on the financing. Once you trade in the car, the dealership will contact whoever provided the financing or loan for the car and pay the balance. The unpaid financing the dealership pays will be subtracted from the trade-in offer. In the event you owe more than the dealership is willing to pay for your used car, the overage will be added to the financing for the car you are planning to buy.

Convenience

Trading in your car with a dealership is easier and more convenient than trying to sell it on your own. When you choose to sell your used car privately you need to take on everything that comes with selling a car. Advertising, time spent waiting for a buyer, dealing with the strangers who come to check out the car, and handling payment issues are all part of the private sale of a used car. On the other hand, when you opt for a dealership trade in, you let the experienced professionals take on the sale of your car.

The reasons to trade in a used car to the dealership you are purchasing your next car from make your life easier and save you money in the process. Whether you own your car or are still paying off financing, trading in your used car is usually the best option.


Reasons to Buy a Used Car

Tuesday, December 18, 2012
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Used cars are becoming increasingly popular among car shoppers looking to stretch their budget. Modern car technology has extended the functional life of cars, making used cars a better value than they once were. Keep the benefits of buying a used car in mind while deciding on your next car purchase.

Lower Initial Cost

Generally speaking, a used car will be substantially less expensive than a brand new car. There is also more room to negotiate down the purchase price of a used car, depending on the dealer you are working with. Not only will the purchase price of a used car reduce the initial cost, the other expenses associated with buying a car can be lower. Several states relate the fee associated with registering a vehicle with its purchase price, which is lower when you buy a used car. Also, insurance rates are widely based on the value of the car you own.

Late Model Looks, Used Car Price

A two year old sports car looks a lot like the newest model of the same make. When most car buyers think of used cars, they picture the cliché of mismatched passenger doors and rattling engines. The increased durability of newer cars and knowledge base of the car owners has improved the overall quality of the used car market. In reality, it is possible to find a used car with all the style and aesthetic appeal of a new model.

Full Disclosure

The contemporary car buyer has access to all of the information needed to avoid surprise issues when buying a used car. In the past, all you had to go on was what the seller told you about the history of the car. You now have the ability to look up accident, ownership, and repair work history using online search services. While it is still advisable to both test drive a used car and pay a mechanic to check the engine before buying, the advent of these information services makes it safer and easier to find a worthwhile used car.

Used cars are less expensive to purchase and provide many of the same amenities as a new, late model vehicle. As long as you do research into a used car’s history before making the purchase, a used car can meet your needs while sparing your budget.


Common Mistakes When Buying a Car

Friday, December 14, 2012
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Cars are an indispensable part of most people’s everyday lives and every driver will inevitably need to purchase a car. There are mistakes you should do your best to avoid when buying a car or you may wind up with buyer’s remorse.

The Wrong Car

Every driver has a different set of needs and wants for the car he or she owns. One of the most common mistakes people make when buying a new car is not considering what they realistically need from a car before driving off of the lot. The car you think looks the coolest or most fashionable may not be the car that fits into your daily life. Ask yourself what the car you buy needs to do and make sure whichever model you choose fits those requirements.

Ignoring Used Options

A new car immediately depreciates in value and should not be looked at as a financial investment. A used car that is less than five years old and came from a good owner can offer all the amenities of a new car at a substantially lower purchase price. Long term or extended warranties also make buying a used car a practical option.

Monthly Payments Vs. Total Cost

A lower monthly payment does not mean you are paying less for the car or that the car is a budget-appropriate option. While shopping for your next car, remember that the salesperson is not trying to save you money. The salesperson is trying to sell you a car. As negotiations progress, remember to figure out how much the total cost of the car works out to. Do not make the mistake of focusing entirely on the monthly financing payments.

Cost of Ownership

Beyond the purchase price of a car there are costs of ownership you should keep in mind. A serious mistake people make when buying a car is completely overlooking how much money it will take to keep a car on the road, insured, and filled with fuel. Even if you can easily afford a luxury vehicle’s ticket price, be sure you are willing to keep up with the ongoing cost of ownership. Check to see if repairs, gas and other routine maintenance will cost more on the car.

The worst mistakes you can make when buying a car are all related to overlooking the true value of the purchase. Always stay focused on getting the most out of the deal while still driving away in the right car.