Tips on Buying a Car

1. Make sure you are getting the right vehicle.  

This seems obvious, but you could wind up an unhappy car owner if you haven't thought carefully about how many people and how much luggage or gear you need to carry. 

2. Assess the worth of your old car. 

Whether you plan to trade it in or sell it, your current car can be an important factor in your budget. Checking the right Web site and maybe your local newspaper will give you a realistic valuation. Selling it directly instead of just trading it may also mean a sizeable difference in what you get for it, though it may take a while longer to reap the proceeds. 

3. Decide whether new or used is best for you. 

Cars are built better now than in the past, so used cars make a lot of sense. But if you get a rebate or other cost break, the math may be on the side of a new vehicle. 

4. Consider whether leasing or buying makes more sense. 

Leasing provides lower monthly payments than buying with an auto loan. But it's not for everybody. If you don't have money for a down payment or if you trade your car every two or three years, you may be a good candidate for a lease. 

5. Do your homework and set your target price. 

The Internet has made it easier than ever to find out the dealer's cost for each vehicle and its options. That's the first step to getting the best possible deal. 

6. Shop for money before you shop for the car. 

If you plan to buy with a loan, check your credit union or local bank quotes online to find the lowest rate. Getting a pre-approved loan will give you added confidence in negotiating a good price. 

7. Negotiating a lease. 

In the complicated world of leasing, the dealer will have the upper hand unless you learn the jargon and how to negotiate the various segments of a lease deal. 

8. Negotiate a purchase. 

If you are doing it yourself, get bids from several dealers, keeping the focus on the dealer's invoice price, which you will know from your research. You may also be able to get bids without going to showroom after showroom. 

9. If you hate haggling, consider using a car-shopping service. 

Auto-buying services, such as Web sites or discount clubs, make things easy with pretty good, no-haggle prices. But with most of them, you get quotations from only one dealer. Consumer services that shop several dealers near you may deliver even better prices. 

10. Don't let the deal-closer close out your savings. 

The finance manager isn't there just for the paperwork. He or she wants to sell you high-profit financial and mechanical add-ons. These are seldom worth the money. 

Avoid These Mistakes When Buying A Car  

Many people (especially first-time buyers) get so excited at the prospect of owning a new car, they fail to do their homework and end up not getting the best deal they could have or may even get scammed. You must be cool, rational and prepared. Avoid making the wrong decisions by steering clear of these common car purchasing mistakes: 

1. Buying based on wants, not needs

It's too easy to buy the hottest-looking car on the lot. To avoid this temptation, spend a few rational moments writing down how you'll actually use the car. Consider how many miles you drive, and the weather conditions that your car needs to be equipped for. This exercise should help you determine what kind of car would be bestl for you. 

2. Budget based only on monthly payment

Put together a budget to decide exactly how much you want to spend on a monthly basis. Don't stop there-it's all too easy for a finance manager to put together a loan package that gets you a low auto loan payment. The problem is that you'll be making payments well past the day that your shiny car isn't so shiny anymore. Instead, decide how much money you're willing to spend overall, and how soon you'd like to pay it off. 

3. Start talking trade-ins right away

If you want to trade-in your car, don't tell your sales person until after you've negotiated the price of the new car. If you let them work it into the deal earlier, you can bet the final numbers will be factored against you. 

4. Not investigating car dealer

Do as much research on the car dealer as you do on the car. Find out if any of your friends or family has done business with the dealer you have in mind. Check with the Better Business Bureau, as well.   

5. Sticking with one dealer's loan

If you've got the right dealer and the right car picked out, take a few extra days and make sure that you've got the right car loan. Shop around for the best rates and fees, and go with a reputable lender. It need not be the dealer selling you the car.  

6. Letting Them Know In Advance That You Want To Apply for A Car Loan   

Always negotiate the price before you reveal that you are thinking about applying for a car finance loan. If they know ahead of time that you plan on wrapping up the deal with a car finance loan, they will frequently try to create a dilemma for you by giving you a lower rate on a higher price or a lower price at a higher finance rate. If you decide on a car finance loan through the dealer, you can negotiate the interest rate. Dealerships usually have several loan sources, including local banks and the manufacturer's credit company. Each source sets their rates to the dealer.

In summary, take your time, and carefully assess each move that you make. Keep this list of common errors handy, and review them throughout the process. Take it slowly and do it right. In the end, you'll have the car you need at a price you'll love. Driving the wheels you want at the deals you want will make for smoother, happier driving.