For most citizens, owning a car is a necessity. Even if you live in an area with reliable mass transit, the flexibility and freedom of owning a vehicle will be worth the investment. Inflation and higher interest rates have made car buying an expensive, risky proposition.
What to Know About the Vehicle Market Today
Recent increases both in prices and in interest rates to finance those cars have led to a slowdown in sales. Production has not slowed down, so indications are that high supply will soon lead to lower mark-ups.
Unfortunately, interest rates are not dropping. Those with poor credit ratings may pay for those ratings both in higher interest rates on the car loan and higher insurance costs. If you must purchase another car and your credit rating is poor, take care to avoid a vehicle that could be considered sporty. Additionally, you may save on insurance if you buy an older used car.
There is also the option of what kind of vehicle you may be interested in. In today’s time, there is a rising trend of electric vehicles being bought by the modern-day driver. You can get these from numerous car dealerships, such as Edmunds, or even independents that have bought them for resell. There is also still cars that run on gas that can be termed cheaper but sometimes this isn’t the case.
The Do’s and Don’ts When Purchasing a Vehicle
Take care not to overbuy when it comes to size. If you need a pickup twice a year, driving one for the other 50 weeks of the year will get expensive. Consider the vehicle that you need for 90% of your driving requirements. You can rent a larger vehicle for a day or two if you can’t find one to borrow.
Looking for a used car will save you money, especially if you can look outside your current location. As you search, note which sellers are willing to allow you to take the car to a mechanic for an inspection. If they refuse, keep searching.
Plan to own a vehicle for the next five years. If your children are under ten years old, make sure the backseat will have enough legroom when they hit puberty. If you’re hauling bikes and camping equipment on a regular basis, make sure the hatch will have cargo space for larger backpacks and tents.
Get your financing in order. Your dealership will do their best to help you finance a car through them, but you may get a better deal at your bank or credit union. If you set up your loan at your bank or credit union, you may be able to make a partial payment each payday and lower the total interest you pay on the loan.
Getting pre-approved will also give you a much better idea of how much car you can afford. If your pre-approval amount is too low for the type of vehicle you need, you may be able to search for something a bit older or something with more miles than you originally planned.
Create a savings account to help you cover the cost of repairs to an older car. If you have a mechanic you trust, take it to them and get an honest assessment of what it will take to keep your new car on the road. An older used car can be a good deal, but you’ll need a bigger maintenance budget.