So You Want to Buy a Car?

First of all, Congratulations!, because this usually means that you have been smart with your money and now have enough for a down payment to search for and ultimately purchase a car. Hopefully, you have already weighed the pros and cons and considered a variety of transportation options before making this decision.

I recently helped someone I know purchase a car and I just wanted to share my experience and what I learned.

Setting a budget

Getting a car should benefit you, so you should certainly set a budget with respect to the purchase price as well as what amount you would be willing to pay bi-weekly or monthly for your payments and other costs. There are a number of costs and payments that you need to keep in mind including the purchase of the vehicle, fees, gas and car insurance. The larger your down payment, the more you can spend on the purchase price.

Now that you have the money, you also need time

Buying a car requires a lot of time, whether you are spending time browsing car dealership websites or viewing ads posted by private sellers, there is no doubt that you will need to dedicate a certain amount of time to view potential vehicles that you would like to observe in person and test drive if applicable.

Research is key!

To start your amazing, yet sometimes frustrating journey, it is recommended that you do extensive research.

With the advancement of technology and the internet, including apps on smart phones, you may feel overwhelmed by the amount of information and methods to obtain information about vehicles that are available for sale. The methods we used were online sites, newspaper ads and smartphone apps.

On the internet, dealership websites allow you to access the inventory that a dealership has on hand, the listings online can change daily so you may need to check back often as it could change daily. Another way is through private sellers. These people usually post ads on websites such as Kijiji or Craigslist and given the increased risk for a scam and to avoid the headache, we avoided this option. Newspaper ads often display ‘blow out sales’ that dealerships are having. However, they are limited time offers and sometimes have a catch. Smartphone apps are good for searching on the go, when you don’t have a computer or laptop handy.

Which car?

So you have created a budget and now you can begin to look for cars that fit your criteria and meet your needs. Some questions to ask include the purpose of the vehicle: are you using it to commute to work and back home?, will you be using it to travel long distances? what kind of roads will you be driving on? what kind of climate/weather do you experience? who will be riding in the car?

Cars come in all different shapes and sizes, so it is important to establish a guideline and checklist about what you want in your new car. Create a checklist of features you would like to have in your vehicle, then rank them as ‘must have’, and ‘would be nice to have’ and look into vehicles that satisfy your list. Some of these include: driving train (AWD, FWD, RWD), Body type (SUV, truck, sedan), appearance, fuel efficiency, transmission type (manual, automatic), resale value, colour, safety, comfort and size, among others.

Vehicle Reviews

Once you have an idea of which vehicle you want to purchase, it is useful to research further into the different models and features that are offered in the vehicle and the line so you know what to look for when considering similar vehicles.

It is good habit to always do your research and homework when purchasing new items. It is especially important to apply this when purchasing a vehicle.

New or Used?

Cars come either new or pre-owned/used. There are definitely advantages and disadvantages to both types, so it’s up to you to really do a cost-benefit analysis and decide which works best for you. The only thing is that sometimes you will notice that the price between a car that is one year older i.e.) 2014 than a newer car i.e.) 2015, the price difference may not be as big as it is for other even older vehicles. At this time, it is good to consider the differences between the cars such as the number of kms that are on the used vehicle. There may also be differences in the features and accessories that are included that you should take into account.

There are several factors that determine whether it is worth it for you. Some of the more notable advantages of buying a used car instead of a new car is that it is generally cheaper to buy used. There is less depreciation, since the vehicle is not new and insurance tends to be cheaper for older vehicles. Of course, on the flip side there are also some disadvantages that you should think about when deciding what type of vehicle you want to purchase. Since the car is older, it could be a lemon that used to be someone else’s problem, which would require more frequent maintenance and potentially higher costs down the line. Another disadvantage is that newer models are often equipped with improvements to technology, safety and other features. Although it may not be a big deal to some people, used cars present limitations including the lack of certain features and a smaller selection of colour. Since the vehicle is not new, there may be little or no warranty provided.

Lease, Finance or Purchase

When it comes to purchasing a car there are different options that you can use from a financial perspective. You can either lease, finance or purchase the vehicle outright. Leasing isn’t common as there are negative connotations associated with it; that it’s a rip-off. It is safe to say that most people will finance their vehicle.

Since most people cannot afford to pay the full purchase price in cash, you will probably need to apply for a car loan which depends on your salary, credit history, score and what interest rate you get approved for.

Other things to consider: if you have an existing vehicle, you can often ‘trade-in’ your vehicle for some money. The goal is to obtain the lowest interest rate or minimize your payments and do whatever works best for you, financially.

The Car of your Dreams

So your research has paid off, you have found the right vehicle for you and all that is left to do is to visit the dealership in person, so that you can physically see the vehicle and assess its features and take it for a spin.

Be open to similar vehicles that may be older and offer better features; do not be stuck on one vehicle.

Test Drive

To get a real time feel for how your potential vehicle operates on the road, it is necessary to test drive the vehicle. Bring a friend of family member with you and have them sit in the back seat as you drive, then ask for their opinion, i.e.) comfort, smoothness of the ride, space and overall feel and impressions.

Your Future Car

After taking a few vehicles out on the road, you decide that this is the right car for you. You know how much it will cost you and get in  touch with your bank or the financing department about what rate they can offer you. In my experience we narrowed down our options to two (2) vehicles, one was a brand new base model and the other was a year old, higher model with very low kms. The next step was to crunch all the numbers.

Crunching the Numbers

Now that you have a rough idea about how much you can afford for everything i.e.) how much the vehicle will cost you and how much your payments will be as well as how much you can finance, it is time for you to crunch the numbers and determine what works best for you.

Different Types of Salespeople

Ultra Aggressive – out of the four (4) dealerships that we visited, there was one salesman who was quite aggressive, we looked around the showroom and inquired about some of the vehicles that we saw on their website. He was happy to show us around and provide us with more information. He even convinced us to take it for a test drive. We were running short on time and explained that we would need to come back another day. His attitude towards us went from priority to not even looking at us. It was quite the change in behaviour, but he just approached another potential customer and chatted them up.

Kind and informative – this type of salesperson is very warm and informative, cracking jokes here and there. This salesperson makes you feel comfortable and puts you at ease, making it hard to say no if the deal does not work for you. There are definitely several other types of salespeople out there, but no matter which type of salesperson you encounter, each and everyone wants your business. they will constantly follow up with you and try to get you to come in to check out ‘another vehicle’ or to test drive additional vehicles. So with that being said it is important to not fall into any of their sales tactic traps.

Deal or No Deal?

After all of the time and energy spent researching different vehicles and going to several dealerships, you have your eye set on a vehicle that matches your needs and is within your budget. The next step is to negotiate a good deal and to pay less than what the advertised price is. The dealership will make you an offer, which you can counter by presenting another offer, leaving room for some negotiation. Being able to negotiate with the dealership i.e.) getting them to throw in some freebies or extras without paying more, such as installing a remote starter or taking a few hundred dollars off the purchase price, it is always about how to get more bang for your buck.

When to say No

At the end of the day, business is business. It is helpful to keep your emotions out of your transaction. Although it is easier said than done, if you let your emotions cloud your judgment, this can actually work against you. Bring a family member or friend along with you, so that you have another person’s opinion to help you make a decision.

If you are unsuccessful in negotiating a better price or you feel that the salesperson is persuading you to make a deal that would not be best for you, do not be afraid to walk away. This shows the salesperson that you should be taken seriously and that you do not have a problem in taking your business elsewhere.

A Few more Things

Once you have negotiated a deal, you just have to pay a deposit and confirm your financing details. After that you need to confirm proof of insurance and wait for the okay from the dealership.

Done Deal

Everything is done, all you need to do is sign all the necessary paperwork, pay the rest of your down payment and finalize any last minute details then look forward to picking up your new car!

Congratulations and happy driving!

Have you bought a car recently?

Do you have any tips or tricks that you can share that may help others who are thinking of or in the process of purchasing a vehicle.

Stay strong and beautiful!

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