Are you in the process of buying a new car? While it can be a very exciting time, it’s important to not let the excitement get the better of you so that you make a potentially expensive mistake. There are a lot of important factors you need to take into consideration before you make the new car sales department of your local dealership very happy by signing a contract.
The Resale or Residual Value
One mistake many new car buyers make is not thinking about the future. You need to remember that cars depreciate as they are used and as they age. Although you are obviously hoping to get as long out of your new car as possible, it’s important to think how much you might get for it in the future when it is time to sell up and change again.
Factors that can affect how quickly a car depreciates includes if they were already bought on sale or as part of a dealership rebate program. If the car you buy is a particularly common model and there are already a lot out there on the road, it may not keep its value as well as a less popular and available vehicle.
Ownership and Running Costs
As well as the actual price tag and the residual value of a car, you need to consider the actual cost of owning it. That means the cost of insurance, gas and any repairs and maintenance it may require. Ideally, as a rule of thumb you should be looking for a car that will cost you no more than between 15 and 20% of the monthly budget you must spend.
Tech and Features
Probably the biggest draw to new car purchases for most buyers is the chance to benefit from the latest features and technology. Whether its in-car comfort, entertainment or safety. However, it is important that you figure out the features you need before you start looking at models. This will help you to avoid spending out on a car with a lot of extras and tech that you will never use, but are paying for, nonetheless.
An effective way to figure out whether the features a car has are important or not is by test driving it. We would recommend you do that when buying any car. As this will be the best way to get a feel for its controls, how it handles and whether the air conditioning is right for you.
Consider Your Financing Options
Obviously, if you can afford to buy a new car outright then that is the best route to take. However, for most people, you will need a loan or financing of some kind. It is recommended you check your credit history and score before you start looking at cars to know what financing you may need or be entitled to. Dealerships tend to make the biggest profits from the financing they offer, so it may be in your best interest to look at securing your own financing from a local bank or appropriate institute.