Whether you are shopping for a new or used vehicle, luxury or budget model, compact or SUV, the car buying process largely remains the same. A lot of the work can – and should – be done before you step foot onto a car dealership lot. Here are three ways to prepare for the car buying process.
Set a Realistic Budget
A new vehicle is likely to change your financial situation, and most of the time, buying a vehicle is likely to add or increase a monthly car payment. On occasion, someone may trade in an expensive car for a cheaper model, which may cut down the person’s monthly payment. Online payment calculators are useful for calculating monthly payments, depending on the cost of the vehicle.
In addition, be sure to take into consideration other costs that come with purchasing a vehicle. Depending on the model and gas mileage of the vehicle, your gas costs may increase or decrease. Consider the cost of maintenance and repairs – some car makes and models can be particularly expensive to fix or require special parts. Your insurance rates are also very likely to be affected. Most insurance companies are able to provide an estimate quote for a particular make or model. After taking into consideration all of the potential costs of a new vehicle, create a realist budget for your car purchase that will work for you now and over the next 5 years.
Pull Your Credit Report
Your credit score and overall credit history has a significant impact of your ability to get auto financing and the interest rate of that financing. Knowing your credit score, obtainable from all three credit reporting agencies, will give you a clear picture of what you can expect to hear when you talk financing at the dealership.
Arrange Financing Ahead of Time
No matter what your credit score is, you may want to consider alternative financing options. A local bank or credit union may be able to offer customers with good credit lower interest rates than the dealership’s rate. More online lending companies have been established recently to assist buyers with less-than-desirable credit. Be sure to be do your research before signing with a company.
Whether this is your first or tenth car buying experience, heed these three tips for preparing before hitting the dealership. Doing your preparation ahead of time will help ensure a smoother buying process.