One of the first major purchases that most people make is a car. Interestingly enough, it is often considered one of the worst investments you can make, because, unlike other assets, cars almost always depreciate in value.
The first thing you need to determine what you need the car for? Are you more concerned with a reliable mode of transportation, or something that will make a statement? Is it just for going to work or school, or for hauling the kids to soccer and football practices? Is it for regular long trips, do you need to carry large items when shopping, or is it just for the occasional weekend trip?
Once you've identified the right car, think about whether you really need a new car or if a used car will still serve your purposes. Most cars depreciate 20% to 30% as soon as they are driven off the lot, so getting a one year old car gives you almost the same vehicle at a significant reduction in price. In fact, many major auto dealerships offer certified programs for their used cars which guarantee an accident free, regularly serviced vehicle that is tuned up with a complete warrantee. This gives you almost all the benefits without the full price tag. Of course, you can always look for used vehicles that fit almost any price range, so if you budget is tight, you may need to be flexible on specifics like model, color, and features, and concentrate more on the target price range.
Once you've identified the right car, think about whether you really need a new car or if a used car will still serve your purposes. Most cars depreciate 20% to 30% as soon as they are driven off the lot, so getting a one year old car gives you almost the same vehicle at a significant reduction in price. In fact, many major auto dealerships offer certified programs for their used cars which guarantee an accident free, regularly serviced vehicle that is tuned up with a complete warrantee. This gives you almost all the benefits without the full price tag. Of course, you can always look for used vehicles that fit almost any price range, so if you budget is tight, you may need to be flexible on specifics like model, color, and features, and concentrate more on the target price range.
If you decide to buy new, research is critical to getting the best value. There are many internet sources that can not only provide invoice costs , but also real numbers that people have paid on the street so you can go into any price negotiate fully armed with more information so you can even out the advantage that a car dealer normally has. Once you decide on buying a car, an important tip is to leave your financing method out of the pricing discussions and focus only on the final price of the car. A common strategy for dealerships is to fit a higher price tag into whatever monthly budget you offer, so avoid getting lost in the numbers and allowing them to adjust the terms to fit your numbers as you'll end up paying more for the car in the long run. Dealer installed options also come at a far higher mark-up than any other work, so be particularly cautious when reviewing the sticker price, knowing that you can get the same option at less cost than the sticker, so expect to have more negotiating flexibility with options than with the base price of the car.
Above all, the most important tip when buying any car is to do your homework, know what you want, know what a fair price is (which is fair for both you and the dealer, since you are likely to be servicing that car for several years), and be prepared to negotiate from the invoice price up, and not from the sticker price down. Don't be afraid to walk away from a deal if you are uncomfortable with the salesperson or with how the terms are unfolding - there are always other cars to buy and other places to buy them, and many car dealers rely on pressure tactics to get you to commit to a purchase before you're fully comfortable. The best approach is to leave your phone number, be clear on your options and price, and more often than not, the salesperson will consider your offer if the numbers are fair.
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