Top 10 things to know about before you buy or lease a new car

Ten tips to help you buy or lease a better, cheaper new car.

1. What total price do you want to pay for the car or if leasing what value have they assigned to the car on the lease document. What will it cost to finance the car through purchase or lease?

Before you go into a car dealership know how much you want to pay for the car in total. Even if you are leasing the car, you should know what value they have assigned to the car on the lease. This value will determine your monthly lease payment and the residual value of the car should you choose to purchase it at the end of the lease.

2. Go over your current budget and determine the maximum car payment you can comfortably afford.

If you don’t already have a budget you may want to develop one before you go out looking for a car. Determining how much of your discretionary income is available for a car payment is the first step to making a satisfying car purchase or lease. You don’t want to walk into a dealership and tell them you have no idea what you can afford. I can almost guarantee you that they will find a pricey monthly car payment for you to make.

How to Save Money Buying a Car 300x161 Top 10 things to know about before you buy or lease a new car

Top 10 things to know about before you buy or lease a new car

3. What do you need the car for? What specific features will be needed?

Are you using the car for a short work commute or are you planning to take extended vacations or tow a camper or trailer with the vehicle? If this is the case you may need a truck or SUV. Consider all the possible uses for the car you are purchasing, you don’t want to underestimate the type of vehicle you will need. For instance, if you think you will need a truck only once or twice a year it may be more cost effective to rent one as needed.

4. Check Consumer Reports Magazine for overall ranking.

One of the best sources for new car testing data is Consumer Reports Magazine. Before purchasing a car check out the latest report on the model(s) you are interested in. This is a quick source of data on price, reliability and crash tests. This research can quickly help you narrow down your best car choices and also help you determine what a fair price is.

5. Call your auto insurance company and ask them what it will cost to cover your proposed new car.

People do not always realize that the type of car you drive and model year can affect the insurance premium charged. Whether or not you lease or own a car can also affect the premium. It is always best to call your insurance company prior to signing the papers to determine exactly what the insurance costs will be for your proposed car. In my experience insurance companies are always happy to provide quotes for this very purpose. The time to ask is before the new car is acquired so that there are no surprises later.

6. What is the car’s average gas mileage? How long is your daily commute to work? Is good gas mileage an important consideration for you?

There are a variety of models on the market with exemplary gas mileage. There are also a lot of SUV’s and large trucks, with poor gas mileage. Sometimes one of the determining factors is the average cost per year to operate the car. Part of this cost is the cost of fuel. To estimate you yearly fuel costs take the average number of miles you drive per year and divide this by the estimated miles per gallon for the car you are considering. This will give you the number of gallons used per year. Multiply this by the current price of a gallon of gas. This will give you an estimate of amount of dollars spent on gas for the year for this model. Did this amount surprise you? Is it higher than you thought? If so, you may want to consider a more fuel efficient model.

7. Do you need a four-door or two-door model? How large is your family?

If you have more than two people in your family it may be preferable for you to have a four-door car. The ease of use of the backseat is reason enough for this. Another consideration is if you have small children in car seats or frequent elderly passengers a four-door car will come in very handy. One final note, two-door cars are often classified as sports coupes and often the insurance premium is higher for anything in any sports car category.

8. Check seat comfort and instrument panel design for ease of use.

What is the cargo area size? Is it adequate for groceries, luggage, etc…?

Once you have narrowed down the type of car you want to lease or purchase make sure you spend time at a dealership sitting in the car(s). There is a wide variety of seat designs, fabrics and instrument panel layouts available on the market. You will want to make sure that the car you select is comfortable, especially for long trips. And that the instrument panels are not awkward to use.

9. What is the car’s resale value?

You may also be interested in knowing the car’s resale value should you want to sell it after a predetermined number of years. Several consumer magazines provide this information. There is a significant range in resale values between models. It is best to know this upfront so that you can get the best return for your car when you sell it in the future.

10. Where is the closest dealer located for purchase, warranty work or general maintenance?

Research the dealerships in your area and visit several of them. Note the amount of customers waiting for maintenance work, their demeanor (i.e. Do they look irritated?), the length of wait time before you are helped and the overall tone of the salespeople and other employees. All of these factors will give you clues as to whether or not this is the place you want to purchase and later service your car.

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