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by sitecore\kmcgrigg on May 27, 2010

Of all the major purchases people make in their lives, few are more based on emotion than buying a car. Even though their car is the most important piece of machinery most people own, the reasons they give for choosing a certain model often boil down to appearance, speed, and prestige. From a strictly financial point of view, however, these factors carry almost no weight at all. When purchasing an automobile, it is important to remember that a car is a tool that provides safe, comfortable, and efficient transportation.

Many people choose to buy a used car since they can be less expensive. In fact, it’s been estimated that, on the average, a new car loses up to 25 percent of its value the instant you drive it off the lot, which means that a fourth of what you pay for a new car is solely for the privilege of buying it new. Still, you must be careful that you are not buying someone else’s problems. The key is to do your homework. Following are some tips for purchasing a new, used car:

Determine what you can afford. Review your spending plan and determine how much you can allocate towards transportation. Don’t forget to consider the price of gas, insurance, registration and maintenance.

Know what the vehicle is worth. There are many resources to help you determine how much a car is worth. For example, you can research used car values at Kelley Blue Book’s website kbb.com.

Get the facts. Ask the seller why they are selling. Also request records from maintenance or repair work. For peace of mind, you can also order a full report on the vehicle’s history. To do this, jot down the Vehicle Identification Number (VIN) and enlist the services of an information provider, such as CARFAX.

Have the vehicle inspected. The most important consideration when buying a used car is its mechanical condition. You may want to have a mechanic you trust take a look at any car you’re seriously thinking of buying. If the seller won’t let a mechanic of your choice inspect it, they’re probably trying to hide something, so you may want to look elsewhere.

Most important, don’t jump at the first car you see. Keep your eyes open for bank repossession sales or auctions. Take your time and make sure the car is in top condition for the lowest possible price. If you’re patient, you could end up with a diamond in the rough.

Posted in:  Auto Loans, Shopping

Comment(s)

Anonymous says:
June 03, 2010

I have had very good luck with buying a "dealers" car, or "demo" car, which has had the dealer as the only prior owner; and getting the car with about 15000 miles makes it very affordable.



Joan says:
June 03, 2010

Although I already knew to do these things it was a very good list of MUST DO, even with a new car.



kevah keblish says:
March 03, 2011
Website: money management

I found this article very informative .My partner an I are in the process of purchasing our 1st vechicle together with two vast value systems . So this article was the pratical balance in the purchase. Thanks k&p



scoobie77 says:
June 03, 2010

Evaluating the value/worth of the car is where most people get it wrong. Start with determining the base number of TCO or total cost of ownership by adding the down payment with the total payments and dividing by the number of months. If it is financed, then add in the interest as well. Then add the estimated rapairs and gas mileage to hone the number. The amount of time you own the car will affect the TCO. Then when you are sure you're comparing apples and apples the TCO will tell it like it is.



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