Car Loans Reminder For First-time Buyers

Most new cars are purchased through medium-term car loans. You provide an initial down payment and chip-off the rest within one to seven years. It’s such a common thing to do that people take it for granted. When they want a car, they go to a dealership without much planning and end up with a car loan that is often more expensive than it should be. If you are a first-time buyer, then develop good habits from the beginning. Think of the following matters seriously before you get that shiny new car:

Consider the Total Cost of Ownership

When you are computing how much you can afford, don’t just think about your car loans payments. The total cost of ownership is far greater since it includes the fuel, the regular maintenance, the occasional repairs, the mandatory insurance, the cleaning, and so on. Make sure that you have room in your monthly budget to accommodate all of these. Otherwise, you might find the financial burden to be unsustainable. Perhaps you should consider a smaller car than will not only cost less but will also get more miles per gallon. Maybe you should check the reliability of different brands to minimize repairs.

Try Not to Rush the Purchase

Bad things tend to happen when you’re in a rush. You are so focused on your target that you fail to notice pitfalls along the way. You make questionable decisions because you haven’t stopped to consider vital factors. You might also fail to notice better deals around you. Take it slow since car ownership is largely optional anyway. Save up as you look for the best options. The more you can spend on the down payment, the less you have you borrow and the lower your interest rate will be. Just walk away if negotiations are unfruitful. There is always another dealer.

Time Your Purchase in a Strategic Manner

You need to think like the car dealers to beat them at their own game. For example, you might want to wait until brand new models are announced before purchasing a car. The arrival of fresh releases means that dealers need to dispose of their old inventory. They are more likely to provide discounts to get rid of the older models fast. This usually happens around October each year. You could go near the end of each month because they will be in a hurry to meet their quotas before the deadlines. You may be able to negotiate a better deal than usual.

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