CHASE - CREDITCARDS

Buying a Car

Some people know exactly what they want when they shop for a car. Others like to search around first for the best deal. Some go by color, others by gas mileage. Picking out the car that is right for you does not have to be stressful. With a bit of knowledge, finding the right car for you can be a breeze. The following steps can help you be sure you are making the right decision.

Budget Matters

Chances are, affordability will be a factor. Before you do anything, look at your budget to determine how much you can spend each month on a car payment. As you determine this number, keep in mind that you will also need to provide a down payment before you drive away from the dealership. You should also remember the other costs of owning a car, like gas, insurance, and maintenance. These costs can make up a third to a half of your total monthly car ownership costs. To be on the safe side, multiply the amount of cash you are willing to part with each month by .66; the resulting number will be your affordable monthly payment.

Talking Credit

Once you have determined what kind of payment you can live with, it is time to examine your credit score. This is what lenders look at as they determine the size of the loan for which you qualify. If your credit score does not cast a good light, you can take steps to improve it. Paying bills on time and paying debts will help. While you may not be able to change your credit score overnight, you will at least know what to expect when you seek a loan.

The Big Decision

Once you have financial matters sorted out, it is time to shop. There is more to buying a car than affordability. Consider the question of what kind of car suits your lifestyle. If you live in a flat suburb, for example, what you look for in a car will be different from someone living in the mountains.

Once you narrow it down, refer to the Kelley Blue Book (http://www.kbb.com) for details on any model you have your eyes on.

Once you decide what you need (and can afford), a test drive is not the only thing that should guide your decision. A small but wise investment you should make when buying a used car is a Vehicle History Report, which will tell you about past problems and repairs on the vehicle.

Buy or Lease?

Leasing is an attractive option because it can cost less. Monthly payments are usually lower when you lease, as are down payments. You also buy the car once the lease is up. Or you can give it back to the dealership.

The disadvantages to leasing a car come with the fact that the car’s value depreciates over the lease. You may have to pay extra at the end of the lease if the car has any damage, or if you go over the allotted mileage. Mileage is not the only factor of leasing that may appear inflexible some. One key characteristic of a lease is the time limit. Unless you purchase the car at the end of the lease term, the car has to be back at the dealership at the agreed-upon time. Getting out of the lease early can be costly. If you decide to buy the car at the end of the lease, you will end up paying more than if you had bought the car outright.

At the Dealership

Do not be persuaded into spending more than you intended. It is important that you remember that you are the decision maker here. Before you set foot in a dealership, do your homework. The more you know, the harder it is for a salesperson to talk you into spending more money.

Negotiating is no easy task. It is important not to rush through your decision. Do not indicate whether you wish to finance upfront. Setting a price before talking payments will limit the sneaky ways for a salesperson to increase your payments.

Other smart moves when buying a car include asking to see how much the dealership paid for the car and shopping late in the month (some salespeople may be willing to cut deals to meet quotas).

The Small Detail of Financing

You will probably need an auto loan. You have many options, including the dealership, banks, and online lenders. Familiarize yourself with the following key concepts: total price, down payment, interest rates, and the term of the loan. You may also want to consider trading in your car if you think the dealership can give you a good price. It will save you the hassle of selling it yourself.

One Last Thing…

Now that the bulk of the car-buying process is done, there is one more major step to go—insurance.

There are many policies to choose from, but one thing is for sure: you need it. Insurance policies are wide-ranging. Thy can include no-fault, uninsured motorists, liability, comprehensive, medical payments, and personal injury protection.

While the price goes up with more extensive coverage, there are ways to save. Women, married people, and people over 25 automatically enjoy a discount. If you have a good record or drive a safe car, you will also benefit. Another surefire way to save on your monthly payment is to have a high deductible. More numerous than the types of insurance plans is the number of insurance companies. Shop around before you buy a policy so that you can be sure you are getting the best deal.

Buying a car can be dizzying, but it does not have to be. If you take these steps, you can be confident that everything is in place when your hands finally touch the wheel.

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