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SALT LAKE CITY — Are at your wits end with the high-mileage headache you call a car that now costs more to repair than it is worth? Or, is it simply time for an upgrade? Maybe you are ready to buy your first car, or you need a better work vehicle. Whether you want to purchase new wheels from a private seller or hit the lots and buy new or used, these pointers hold true when you set out to find the right ride.
Narrow Your Choices
There are so many cars available today, all with different perks and draw-backs. To sort it all out, focus on four factors: size, safety, functionality, and cost. Do you have a family of four or more and crave space, or do you just need a dependable daily commuter vehicle? Do you have a special need for four-wheel drive, a car that gets great gas mileage, or a vehicle that can tow? How much can you really afford to spend, and how much do you want to spend?
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Do you want to pay cash and stay out of debt, or are you thinking of making a down payment and then financing a loan with a reasonable annual percentage rate (APR) and payment plan? Before you hit the road in your quest for new wheels make sure you know what you are really after.
Size It Up
From gas-efficient hybrids and compacts, to mid-sized sedans, station wagons, SUVs, minivans, trucks and more, it can be a daunting task to research and pinpoint the perfect vehicle. Start by assessing what you really need and want, and ask yourself what purpose your new vehicle will serve. Will you need to cart around a family, friends, or to have extra space for work supplies or recreational gear? Planning to have more children, travel and explore, or change jobs? Think about what your life will look like over the next five years, and be sure to factor it all in.
Factor the Functions
Some put four-wheel drive high on the list of important features, while others are more carbon-footprint conscious and want a hybrid. Many choose to meet in the middle, opting for a smaller SUV, wagon, or mid-sized sedan with good gas mileage. Factor in hatch-backs versus trunks, manual versus automatic transmissions (most tend to be automatic), removable back seats, and for trucks, bed size and towing parameters.
Price Fix
Everyone has the urge to splurge, but this is a big purchase and you need to keep costs in line. Once you figure out the size and functionality, you need to start looking at vehicles that meet your needs but stay within your budget. No steady income? You have to save up and buy cash. Period. Full-time, reliable job? While cash is best, with good credit you are probably in a position to put a down payment on a reasonable loan.
Regardless, work out how much you have saved or will need to save, and how much you can afford as a monthly payment when taking out a loan, and do not waiver from it. Remember to factor in the cost of tax and license, and in some circumstances dealer fees—there are a lot of expenses on top of the actual price of the vehicle. And don't forget about insurance. Find out how much it will cost to insure the vehicle of choice.
Rules of ResearchDo not tempt yourself. There will always be a better car or truck, but you need to focus your research on vehicles that meet the needs outlined above. Start by reading reviews of cars that fit within your parameters, and select a couple that you think you might like. Be sure to reference Kelley Blue Book values for used cars, and compare those prices to local dealer prices and private sales online and in local papers. You can also find great information in the Consumer Reports regarding reliability and safety. Start compiling a test drive list.
Private Sellers
When going through private sellers, be cautious. Take a friend or family member with you for the test drive, or if you have to go solo, take a photo of the seller and text it to a friend or relative and make sure they know who you are potentially buying from, their address, and phone number as a safety precaution.
Always ask about any prior accidents, previous owners, recent work performed on the car, repairs that need to be made, the last inspection, and rust. If you are serious about a car, run the Carfax before buying to make sure they were honest with their answers. Spending twenty-five to thirty dollars to get the history upfront can save you a lot of time, hassle, and money in the long run.
Off the Lot
If you are working with dealers, be ready for the schmooze. It is their job to sell and make money, and in most cases, they are really good at it. When they ask how much you want to spend, round low, because they will round up. Make an offer that is lower than the sticker price, and negotiate. Find out if it's certified, and what that certification covers. Do not let them talk you into something you do not need. And never buy a car on impulse.
When you find something you like, sleep on it. Chances are it will still be there tomorrow, and the salesman will be even more eager to strike a deal.
Loan Low-Down
If you decide to get a loan, shop the loan. Loans have become very competitive. Dealers, banks, and credit unions are. Check out the rates and terms with several financial institutions. Wherever you decide to get you loan, sit down with the loan specialist and ask questions—be informed as not all loans are created equal. Be sure to ask them to outline a couple options based on your down payment so you can see several options. And do not forget to ask about gap insurance, especially for longer-term loans, because the value of your car may depreciate faster than the principal.
In short, do your homework. Figure out what works best for your individual needs and financial goals.
Sharon Cook is the senior vice president of Marketing and Public Relations for Mountain America Credit Union
