5 Things to Consider When Looking for a New Car

Car keys on desk with man signing purchase documents in background. Closeup of black modern car keys while hand complete the insurance policy or rental documents. Guy buying new car at dealership.

When you purchase a new car, many things should be considered in your decision. Along with getting one from point A to point B, other things should be contemplated when buying a new car. These things include features and technology, residual value, price and financing, incentives and trade-ins, and cost of ownership.

 

Features and Technology

 

Even though features, safety devices, and technology may be very important in one’s buying decision, one need not get too wrapped up in getting more features and technology. One should not pay for features and technology that will not be used. A backup camera, CD player, Bluetooth phone service, and an onboard GPS all sound nice but will not be useful to everyone. When you testdrive the car, be aware of old-fashioned features such as storage space, the seating configuration, blind spot view, storage space, legroom and driving comfort.

 

Residual Value

 

How much will your car be worth after it has depreciated for the time you plan to keep it? One thing to remember when purchasing a new vehicle is how much it depreciates when you drive it off the lot. How much would the car be worth if you sold it in three or four days? Six months? Two years? When buying a vehicle, remember that your pocketbook will ultimately take the hit for the depreciation. A used vehicle will not depreciate quickly as a new vehicle, and should be factored in when weighing this decision.

 

Price and Financing

 

This factor is the only factor many people consider when buying a new car. Car dealerships will try to sell you on payments instead of the price of the car. People shopping with payments in mind want the bottom line of a comfortable payment, never mind the other financing terms. For example, if a dealership can sell you on $175 monthly payments but do not talk about the other terms of the agreement, you may make these payments for a long time. Consider what your future might hold and if you can maintain these payments over the life of the loan. Payments of $175 per month sounds good, but if one is obligated to these payments for 96 months, interest paid really piles up.

 

Incentives and Trade-Ins

 

Another thing to consider when purchasing a new car is the factory incentives for the purchase and your trade-in and its value. Usually, the best time to buy a car is right before the new model goes on sale. A buyer should be on the lookout for rebates and/or low-interest loans that coincide with the end of a model year. A buyer needs to be aware of any trade-in value for their old vehicle and make sure this value is reflected on the paperwork. In fact, a car buyer may get more for their vehicle by selling it on their own. Trading it in to the dealership, however, can save time and energy. The best advice is to gather offers from all sources and get the best price for the trade-in.

 

Cost of Ownership

 

When one buys a new car, it is important to consider ownership costs above the actual payment. These expenses should not exceed 15 percent to 20 percent of your monthly income. Some of these ownership costs include fuel, vehicle insurance, repairs, and maintenance. One should have fuel economy in mind when purchasing a vehicle because gas prices can fluctuate wildly.

 

These are 5 useful things to keep in mind when buying a new car. These helpful tips will help ensure that you get happiness and satisfaction out of your new car purchase.