A vehicle is one of the most expensive purchases you’ll make. Comparison shopping and researching your options are important, but it also helps to think about your needs, budget, and whether a lease or a used vehicle could ultimately help you save money down the road. Here are a few tips to help you select a car that’s right for you.
Selecting a car
Evaluate your needs and preferences to determine your next make and model. Answer these questions to prioritize the size, comfort, durability, and gas mileage your new ride should have:
- What are the primary and secondary uses of the car?
- Who will be in the car most of the time? How much space do you need?
- How often will the car be used?
Establishing a budget
New or used, purchased or leased—think through all costs involved in getting your next car. That includes things like gas, maintenance, taxes, and insurance. If you’re not sure how much you can afford, talk to a financial advisor or get pre-approval on a car loan from a bank. And once you set your price range, stick to it!
Negotiating a deal
The difference between the dealer’s invoice (estimates are available from automotive magazines, websites, and auto pricing services) and the price listed on the sticker is your bargaining range. Do your research — the more you know, the stronger your negotiating position will be.
To lease or not to lease
Leasing a car is like renting an apartment. You use it for as long as your contract states, then turn it back in and walk away. Most leases include an option to buy at the end of the lease for a predetermined price, but you may pay more than if you had just bought the car in the first place. On the positive side, a down payment may not be required, and monthly lease payments are generally lower than monthly payments when you purchase a car. Be sure you understand the terms of the contract and review it carefully before signing.
Buying a used car
Buying a used car is very similar to buying new — you need to assess your needs, estimate what you can spend, and do your homework. To figure out the going price for a used car model, consult a price guide like the Kelley Blue Book.
Insuring your vehicle
Once you’ve got the car, you will need to obtain auto insurance for the new vehicle. It’s the perfect time to find a policy that reflects how you’ll use your vehicle and how frequently you’re on the road.