When making the financial commitment to purchasing a new car, you should know what to look for and the best time to buy. Knowing how to buy a car is not a straightforward process but, in this article, we will provide some tips to help prevent common mistakes.
Best Time to Buy a Car
- December: Many dealerships are left with an overstock of cars to sell before the year ends. The car dealerships need to meet a specific sales quota and being stuck with many extra cars, the sales rep is usually willing to negotiate. This idea transfers over to end-of-the-month sales too with sales reps trying to meet a certain quota every month.
- Shop the outgoing year model: When at the dealership a model from the outgoing year could be an opportunity for special incentives, rebates, and low-interest rates. They will most likely have several of the “older” models and want to close the year with good sales.
- Three-day holiday weekends: These weekends are known to have special car sales. Holidays like the Fourth of July or Labor Day weekend will offer some savings and deals. Remember, other car buyers will be there searching for the best possible price making it crowded. To prevent this, try going the first weekday after the holiday weekend. It may be less packed, and the dealership will still have the cars to sell.
- Early in the week: It's also a good rule of thumb to go early in the week and early in the day. While dealerships get most of their foot traffic during the weekend or in the evening, try to avoid that by going early during the week. Going early will give you more time to ask questions, negotiate, and make wiser decisions about your preferred car.
- Black Friday: When people think about Black Friday sales they think household appliances, clothes, and electronics. Auto dealerships are no exceptions. Just like in December, look for the models from the outgoing year to get a better deal.
Lease vs. Buy
Leasing and buying a car are two different methods of obtaining a car. Each option has its own set of benefits and considerations.
- Leasing a car: When you lease a car, you will not own it, you are essentially renting the vehicle for a specific period. Monthly payments are about 30% to 50% lower than loan payments because you are paying for the depreciation of the vehicle during the time of your lease. This includes interest, taxes, and fees. There are often mileage limits that come with your lease contract. Going over the limit can cost you extra in fees. The car is under warranty through the duration of your lease, this can cover repair costs. When the lease is up, you can either return the vehicle or begin leasing a new one.
- Financing a car: By financing your car, you are in the process of buying the vehicle and will own it once you are finished with the payments. The monthly payments might be higher than leasing because you are paying the price of the car in its entirety. This includes interest, taxes, and fees. The mileage limits do not apply. Once the warranty has expired the cost of repair and maintenance is your responsibility. After the car is paid off, you can sell it, trade it in, or keep it.
Whether you choose to lease or finance, insurance to cover your vehicle is required. IIA offers different auto insurance options to choose from during this important decision.
What to Look for When Buying a New Car
As with any purchase that requires a sizable financial commitment, purchasing a new car requires hours of research and financial planning. That way you’ll know what you want and can afford.
Plan Ahead
- Dealerships are busy depending on the day, to make sure you aren’t waiting around to be helped call and schedule a test drive. This ensures that the car you want will be available, avoiding delays. When you call, schedule the test drives for the same day one after the other. This helps so you can easily compare the cars while they’re fresh in your mind.
- Dedicate your day to test driving not purchasing. Informing the sales rep that you need to think about your purchase can sometimes lead to a better offer. Being open to different cars can allow you to negotiate from a stronger position, saving time and money.
Researching Car Models and Brands
Make sure to research the car you want so you know what you’re investing in. Consider looking into other models and brands too. This could help find better alternatives and save money. This is crucial to providing you with the needed insight into pricing, features, mileage, and reported recalls. It is important to not only know the type of vehicle you’re planning to get but also to see if a similar model is better for you and your family.
- Establish a budget: After choosing a model, establish your budget. Take into consideration monthly payments that fit your finances. Don’t forget to factor in maintenance, insurance, fuel, and other unforeseen expenses such as repairs. Add all of this to your monthly car payment so you can focus on the total cost per month.
- Kelley Blue Book: Take advantage of this great resource to learn about your dream car’s history. Research the value, history on recalls, warranties or other features that could stand out.
- Cargo space: When researching a car think about your everyday errands. A two-door Mustang would not be practical for a family of four.
- Kid’s needs: This is important to consider if you have a child. Check how their seat could fit and if it is easy to install.
Last minute details
Remember to take the following with you to the dealerships.
- Bring a copy of your driver’s license.
- If you have been pre-approved by a financial institution, bring these documents.
- Have your notepad or your notes app handy to jot down how each car felt after each drive.
- A friend or family member as a second opinion to share thoughts and opinions.
- An understanding of the trade-in-value of your car if you are going to be trading in.
Test drive
Ask the sales rep to explain how the car operates. Make sure to note if there are any abnormalities with the car.
- Daily travel: Ask the sales rep for a test drive that reflects where you typically drive your vehicle. A five-minute drive around the dealership may not fit your everyday commute. It also helps to test the car on bumpy roads.
- Comfort: Feeling comfortable in your new car is important. Think about how the steering wheel feels, how much room you have, and ease of driving.
- Visibility: Look through your windows and mirrors and check your blind spot. Ensure that you have visibility while driving.
After the test drive
Once you are finished reviewing your notes on each vehicle it’s time to negotiate for the right price. For 12 more tips for first-time buyers visit our blog.
Buying a Car Online
Purchasing a car is no longer strictly an in-person transaction. If this is more convenient for you there are other factors to consider that may differ from buying a car in person.
- The benefits: The online platforms offer access to a wider selection of vehicles that might not be available locally. Like using any other online platform to shop, it’s convenient. Going online allows you to take your time making your decision without the pressure of a sales rep.
- The drawbacks: When buying a car online there are also pitfalls you could run into. Online listings may not always be accurately represented, such as the car’s current condition or history. There is also a risk of encountering fraudulent sellers or even scam websites.
Things to Keep in Mind
- Find the right site: Due to popularity, more online sites have increased. Do your research and find a trustworthy site for your big investment. Search through different websites and ask friends and family for recommendations and look for the ratings of each website.
- Trade in: If you are looking to trade in your car and purchase online make sure the site you picked provides that option. If so, negotiate its value with the virtual assistant or sales representative. This will help cover the partial cost of the car you’re buying online. Once again, rely on tools such as Kelley Blue Book to know your current car’s value, and don’t settle for anything less.
- Make the purchase: Don’t rush through the process, review everything one last time. Make sure you have the payment set up and the address of where the car will be delivered.
- Insure your vehicle: Once purchased, don’t forget to secure an auto insurance policy by calling us at 1-855-478-3705 for a free quote.
How to Sell a Car
You’ve jumped through the hoops of purchasing your car but what do you do when you want to sell it? While it could seem like a overwhelming process, these steps can help make the process easier.
- Assess your urgency: If you need to sell your car quickly you won’t have time to prepare it for the market. If you need to sell it ASAP, consider a third-party vendor such as a car dealer. These vendors usually keep a fee or commission from the sale. This may be easier and faster for some sellers, but you will likely receive less money for your car.
- Beautify your car: Before you put your car up for sale thoroughly wash the exterior and clean the interior. Try to repair any dents, scratches, or anything else that might not work properly. Though prepping your car may initially cost more money, it may help you sell it for a higher price.
- Determine your car’s value: A car loses value as it leaves the dealership. To know what your vehicle is currently worth, be sure to check Kelley Blue Book.
- Put your car on the market: When placing your for-sale ad be honest in your description. Take images of your car and share the VIN number so they can research the car’s history. Give your car more exposure through social media and vehicle-selling sites. Increasing its visibility increases the chance you will be able to sell it.
- Choose the buyer: Found a buyer for your car? If they’re paying by check instead of cash, verify the check clears before handing them the keys. Transfer the title and registration and wave goodbye to your old car.
Common Mistakes to Avoid
After reading what to do before purchasing your car make sure to avoid these common mistakes while at the dealership.
- Shopping at one dealership: Try to visit at least three different dealerships to compare prices and negotiate the best deal with each. Let the sales rep know that you are shopping around. This may encourage them to give a better offer.
- Not speaking to your insurance company: As soon as you have settled on what year and model of vehicle, call your agent before going into the dealership. It’s important to know whether your premium will increase. IIA offers you competitive auto insurance plans.
- Only focusing on the monthly payment: The monthly payment is an important factor when buying a car but focus on the price of the vehicle as well. Sales reps will use tactics to focus on the monthly payments rather than the actual cost of the car. The price of the vehicle and its financing are separate. Focus on one thing at a time. Start with the price of the car by negotiating an amount you’re comfortable with. Then bring up your financing and leasing options.
- Not getting an appraisal: Don’t forget to get an appraisal of your current vehicle if you intend to trade it in.
- Not looking into financing options: Talk to your bank first to find out their interest rates for financing your vehicle. Try to get the lowest rate to reduce your monthly payments.
- Forgoing a mechanics inspect of a used car: All the above apply to new and used cars. If you are planning on buying a previously owned car it’s important to have it inspected before you buy it.
Taking these tips into consideration could help you purchase the right car for less money. Before you leave the dealership make sure your insurance policy is up to date.
Call us today to speak with one of our IIA agents at 1-855-478-3705 for a free quote!