Labor Day. The holiday that has led TrueCar.com to boast 1.13 million unit sales last year, and is quite possibly infamous for being the most crowded weekend to possibly go and check out the local dealerships. But with any other highly-advertised string of deals that seem to promise everything but a complimentary parade, the reasonable consumer isn’t about to naively walk into the promise land unarmed. There are facts to check! Lists to review! Questions to answer! Perhaps the most important question to answer, however, is: “Am I really getting that good of a deal?”
Of course, “deals” are somewhat relative. There’s a lot that goes into purchasing the right car, and sometimes what you’re looking for isn’t going to be as easy to find as you might hope, or at the same price as the new-ish car you saw parked down the street with a “For Sale” sign plastered on it. So where to start?
We at Recycler.com love savvy shopping. Well, let’s be honest — who doesn’t? So no matter what you’re buying, the best place to start is with the $$$. That’s right, we mean budgeting. It’s the least fun part of beginning your car shopping endeavors (with the exception of getting stuck with an overly pushy salesperson). But hey, those payments you’ll be making for the entirety of the foreseeable future aren’t exactly a joy ride, either.
So that brings us to Step 1: Know Your Budget
Calculate your monthly or recurring financial obligations before coming up with a price you’re willing to spend on a car. Once you’ve determined how much your output is for bills and other regular expenses such as groceries and personal care items, consider your income after taxes. As a guide, a conservative range for a monthly car payment is within 10 to 15 percent of your available discretionary budget. A mistake that many rookie car buyers make is filling up the remainder of their available money stores with a massive car loan payment, without breathing room for essentials such as gas, annual registration, car insurance and maintenance.
Now that we’ve got that out of the way, it’s time to suit up for negotiation! You’d never want to step blindly up to the competition without knowing what you’ve got to work with, right? Right! And with that comes Step 2: Check Your Credit Report. There are many free and no-consequence ways to do this, and knowing where your credit stands will let you know how much negotiating power you have. Purchasing a car involves a two-way negotiation, particularly when you’re financing a car instead of buying it outright. The reality is that loan lenders use your credit report and credit score as a basis for determining whether to even approve you for a new line of credit, what financing percentage of the vehicle purchase to offer, as well as what interest rate to charge on the loan. All of these factors affect the overall affordability of the car you’re eyeing.
It’s definitely not a bad idea (in fact, it’s a very, very good idea) to get a pre-approved auto loan.
Alright, now we can actually get to the car part. No more boring finance talk, we promise!
Step 3: Before You Shop to Buy, Shop to Fall in Love
You’ve already done the budgeting and credit-checking, yes? Good! So now you know exactly what you can afford to fall in love with. Remove yourself from the pressure and test drive some cars within your price-point. What feels right? What features are most important to you? Because despite how the person who keeps trying to inch you closer and closer to closing a deal wants you to feel, you don’t have to buy a car right away. Take your time, smell the roses (or leather seats or ECO boost or whatever it is you want to smell)! Why? Because you can! Cars are big purchases, and if you’re going to take the leap you might as well do it right.
Another very important thing to remember are those features and add-ons. People often make the mistake of knowing the base model price of a car and not realizing how even the seemingly small upgrades can launch the price of the car beyond your budget. If possible, go online and do some research ahead of time on the websites of dealerships you may want to visit, and compare prices of different features to get an idea of what is important to you versus what will send your budget into a death spiral.
Hooray! You’ve survived the precautionary tales and wallet-friendly advice! Now it’s time to get out there and discover the wonders of new car shopping. It’s supposed to be fun, so take your time and enjoy the test drives. Labor Day awaits, and if you know what to expect, you’ll be ready to take on the task of finding the best car at the best price!