So this is it – the year that you finally treat yourself to a new car. It’s an exciting time, and certainly one of the biggest purchases that you will make. So although you may be getting carried away with thoughts of models you like, trim levels and extra accessories – take a step back and focus a little on the financing of your vehicle. There are plenty of easy mistakes to make during this process – after all, car sales people are very skilled in persuasion techniques to make a sale – so don’t carried away before you’ve considered the following points:
Know Your Credit Score
Before you even set foot inside a car dealership, you should understand that the financing deal you can secure is even more important than the ticket price of the car. Although the upfront cost may seem reasonable, the amount that you pay back over time is what is really important in terms of your financial health. The same headline price can cost you thousands more over the course of a few years if you don’t secure the right deal. Start by understanding your credit score. The better it is, the more access you will have to finance and the better Annual Percentage Rates (APRs) you are likely to be offered. If you need to, consider delaying your purchase by six months in order to improve your credit score first, as this can make you some big savings. Sometimes you can go through a dealer to get financing – and this can be good if they’re running a 0% offer – but equally you may be far better off going through a bank to secure a loan. Remember to look at the APR and offer the maximum deposit you can afford in order to get the best deal.
Does It Have To Be New?
You may have set your heart on buying a new car. But try to consider whether it makes more financial sense to go used. This doesn’t have to mean old. You can often get amazing deals on things like approved used vehicles, which typically tend to be a year old with low mileage, or you could look at buying an ex-demonstrator car from the dealership. These are usually in beautiful condition and quite often have a really high-spec extras package – although you may not be able to be as choosy with the colour. Bear in mind that you may also be able to benefit from plate change – you can secure a new car with an ‘old’ plate just after the changeover for a much better price, even if it’s never been driven! Given the depreciation of a new car, going used makes a lot of financial sense. Work with a specialist dealer like Ron Skinner And Sons and they can source a vehicle which suits your needs and offers a brilliant deal.
Pay Extras In Cash
When you buy a car, it isn’t just the vehicle. You also have extras to pay for – things like registration fees or extended warranties. Aim to pay for these things in cash rather than rolling them into vehicle financing as you’ll end up paying far more. Increasing the amount of your loan – but not the value of the vehicle securing it – is never a good idea.