Thinking of buying a car? You’re not alone. Many people spend a lot of money buying trucks and cars. The average American spends nearly 17% of their total income on transportation (including costs and maintenance).
After housing, transportation is the second biggest expenditure in most households across the US. But car-buying can be stressful, especially for first-time buyers with lower savings and less-established credit history.
Today’s car market boasts steeper prices. Ever-changing consumer behavior also affects car prices, making it even more difficult for people looking to buy a car. So, what are some of the car-buying tips you need to know?
1. Choose the Right Car to Buy
Choose a type of vehicle that suits your particular needs. If you’re looking for efficiency and off-road capabilities, go for a sports utility vehicle (SUV). Such vehicles are designed to handle foul weather with ease.
However, if you rarely travel on rough roads or deep snow, a traditional car (such as a coupe, sedan, or station wagon) is a better choice. On the contrary, if you regularly travel on dirt roads, go for a heavy-duty pickup truck.
If you want to reduce gas emissions in the environment, get an electric vehicle (EV). Currently, only 3.4% of total car sales are EVs. But the best part is that you can qualify for a tax credit when you buy certain electric vehicles.
2. Research More
The best move you can make as a car buyer is to look around. Research the car you need. Do you want a new or used car? For years, buying a low mileage used car has been seen as a financially smart move.
According to car retailers, finding used cars for sale can be difficult because of the scarcity of inventory. Due to the pandemic, the demand for used cars has increased, as has their retail price.
Buyers looking for used cars can get a certified pre-owned vehicle from an authorized car retailer. That way, they have peace of mind knowing they’re buying a clean and well-inspected vehicle.
3. Consider the Mode of Payment
Paying cash for a vehicle can save you thousands of dollars in interest. Also, you circumvent costly monthly payments. You may also get a good deal when you pay cash. Unfortunately, not many can take this option.
If you can’t pay cash, you can consider car loans or leasing. With a car lease, you make low monthly payments. On the other hand, a loan may be a better option if you want to own the car for years.
If you lease a car and run into trouble, you pay a hefty fine for damages or modifications. With a loan, once it’s paid off, the vehicle belongs to you. There are no penalties for terminating the lease early or for excessive wear and tear.
It’s also important to know the best times to buy a vehicle. Usually, buyers are advised to wait until the end of the financial quarter to buy a car. That’s when most car retailers are working hard to meet their targets, which makes negotiation easier.
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