Choosing The Right Car : How To Win At Car Buying
According to the Brookings Institute, 90% of Americans drive to work. They sit in a car for an average of 25 minutes in each direction. Clearly, we love, or at least tolerate our cars. So choosing the right car is important. But how do you pick the car that’s best for you? Are you an early adopter, who goes for the latest technology? Are you environmentally minded and looking for the best hybrid or electric vehicle? Or do you follow the advice suggested in that football commercial by cars.com, waiting to see how it works out for someone else before you take the dive?
Whether you’re an early adopter type or a wait and see type, you’ll need to consider some basic information to make a good decision. Here’s a rundown of what’s considered most important by the experts.
Unless you’re committed to keeping the car until it’s one day hauled off to the scrap yard, there’s a lot more to value than the price tag.
Of course, you’ll be negotiating for the best possible price. But you’ve got to consider the likely value when it comes time to sell or trade it. All things being equal, a vehicle with higher resale (residual value if you’re leasing) is going to cost you less to own. Think of it this way: if it depreciates less while you own it, that’s less you’ll have to be paying for. If you’re leasing, that’s usually reflected in a lower monthly lease payment.
Where can you learn about resale values? There are online sources of values and you can also look to publications such as consumer reports who usually include such information in their reviews. The information you want is calculated as a percentage of the new retail price, so the higher the percentage the less the car typically depreciates.
Be familiar with pricing before you go shopping. New car prices are based on manufacturers suggest retail price, or MSRP. As the name suggests, that’s the suggested retail price. It’s a starting point and (hopefully) never what you actually pay. Used cars can be a bit trickier to price. Equipment, regional differences, even color can affect price of a used car. Either way, here are some tips in negotiating price:
- Know ahead of time your budget, both price and payment, and stick to it.
- Negotiate each piece of the deal separately. First price of the car you want, then terms of the lease or loan, and then the trade allowance for your existing vehicle.
- Read and re-read the paperwork. It’s not uncommon for the deal you thought you made to be different from what gets printed out.
- Question anything and everything about which you are unclear. There are no dumb questions.
Vehicle Ratings and Reports
Take the time to research the make and model you’re considering. What are the experiences and opinions of other owners? What have the professional reviews concluded about it?
Consumer reviews tend to be more general, but if you dig a little you might find common complaints or problems. Professional reviews will be much more detailed, and probably more objective. Often, they’ll compare five or six similar vehicles.
Finally, when you’ve narrowed it down to a specific vehicle, get a vehicle history on it. That will tell you such things as maintenance history, accident history, and if the vehicle was used as a rental previously.
The “Other” Factors
Of course, buying a car is not purely an objective exercise. You don’t want to buy a green car just because it’s a good deal with great ratings if you hate green. So any personal preferences or needs should be considered before you sign on the dotted line.
With the average lease at 36 months of $405 payments, and the average purchase at 67 months with a $488 payment, choosing the right car is important. The fun and excitement of having something new will fade far before those monthly checks you’ll be writing. But do your homework, and you’ll end up with the perfect car.