Responsible Car Buying Tips

Transportation – whether for work or recreation – takes significant cash flow.  It’s a cost of living, no doubt about it.  Between budgeting in a new car payment, insurance and maintenance, the cost of owning a vehicle can almost make you wish for a bicycle instead.  But realistically, most cities are not equipped for the easy access of a bicycle between highways; weather and the sheer crude logistics of getting from point A to point B often work against you.

Luckily, when shopping for a car, consumers have the option of new car financing options.

Car Financing Options

How one considers the financial burden of a vehicle makes the difference in determining if you should lean more towards new or used.  If you have an established job, a long-held checking account and a trade-line, such as a credit card, buying new would give you the best value for your dollar.  Interest rates are competitive enough, especially if you have good to excellent credit.  You can also receive an extended manufacturer warranty and new car discounts from your insurance carrier.

buy a car, devour a soul by Esther17, on Flickr.  This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

If you have experienced some credit pitfalls or significant driving points against your license, it may be best to consider used car financing.  Many car dealerships run great deals with limited warranties on their used car fleets.  You typically can get approved with a mid-range bank willing to accept lower credit scores and flawed driving histories.

Sometimes, previous driving records can incur an SR-22 insurance requirement when purchasing a vehicle.  This can create a red flag for the bank if buying new, resulting in a higher than average interest rate, due to risk levels.  Additionally, new car insurance with a financial responsibility certificate addendum to the policy can be billed at double the rate.  Opting for certified new or used car pricing can significantly reduce the financial impact for you.

Responsible Planning

Understanding the financial measurement of allowance is necessary when shopping for cars.  While a newer car may be desired, you have to accurately consider the costs in association.  Between upkeep of a vehicle and the expenditures for gas – the cost can exceed what you intended to spend.

Sitting down with the dealership will help you to determine what allowances you can afford.  Always inquire about a car history and the Blue Book value to verify you are paying what the car is worth.  Take your time and don’t be in a rush to leave the dealership with keys in your hand.

After you visit a dealership, sit down with your finances and plan ahead.  Determine how much the monthly payment of the vehicle, the car insurance, gas and maintenance will amount to monthly.  Far too often, consumers will purchase a vehicle and discover they have sticker shock well after the ability to return the car.  Not paying timely can result in declined credit ranking and repossession with a judgment lien from the bank.

Avoid rushing into such an important decision.  Outside of home buying, car buying is the next highest purchase in your life.  Make it count by understanding the financial burden it brings.  This includes vehicles you may even pay 100 percent cash for.  That doesn’t cover the insurance requirements per state, or the maintenance and fuel.  Responsible choices now will prevent financial troubles later.