Buying your first car is a rite-of-passage into adulthood. Next to purchasing a home, it’s likely the most expensive item you will buy. Car buying can be both overwhelming and exhilarating, but if you are prepared in advance, the process will be rewarding.
KNOW WHAT YOU CAN AFFORD. If you haven’t done so already, now would be a good time to make a realistic monthly budget. List your monthly take home pay and your fixed costs (bills, rent, medications, etc). Then estimate an amount for variable monthly costs (groceries, clothing, personal grooming, etc.), and be sure to allocate some money towards savings and a “slush” fund for unexpected expenses. What’s left over, and what kind of car can you afford based on those numbers? Don’t like the results? Try shaving some expenses to see if your budget will allow you to squeeze out a few extra bucks.
KNOW WHERE YOU WANT TO SHOP. There are a few options for purchasing a vehicle. You can buy a new or used car from a dealer, or you can lease a car from a dealer. You can also purchase a used car from an individual. Going through an authorized dealer offers many benefits, not the least of which is a knowing that you are purchasing a quality vehicle from a reputable business.
KNOW WHAT YOU NEED: You may really want one of those luxury electric cars because it looks slick and is good for the environment. But be realistic. Even if you financed this – let’s call it $70,000 – car over five years at a 4% interest rate, you’re looking at monthly payments of nearly $1,300! There are many other fuel efficient cars on the market that are more reasonably priced. Ford’s EcoBoost is one of the newer hybrids on the road that is affordable and good looking.
KNOW THE TRUE COST OF THE CAR. Manufacturer Suggested Retail Price is just one number. That’s your starting point. Obviously you’ll negotiate the sales price, but you’ll need to be mindful of other costs and ongoing maintenance. Shop around to get an idea of what you’ll pay in interest on a car loan. As a first time buyer, there’s a good chance your interest rate will not be the lowest one advertised. When you are buying a car from a dealership such as Mike Burch Ford, the finance manager will get quotes from a handful of financial institutions with which the dealership works, so that you know you are getting a good rate. Also, consider how many miles to the gallon your intended car will get, and then figure out how much gas will cost each month. Finally, do a quick check on basic car upkeep to know what you’ll spend on routine maintenance such as oil changes.
KNOW THE RESALE OUTLOOK. Unless you plan on driving this car into the dirt, chances are you may want to sell it at some point, and perhaps use proceeds towards the purchase of a future automobile. If that’s the case, you may want to shop for a car that holds its value and is highly desirable. Ford, for example, is a longstanding and reliable brand with numerous vehicles on the spectrum ranging from economy to luxury.
Now that you’re prepared, the fun part comes in. Make sure you test drive the car that’s going home with you! Call Mike Burch Ford for an appointment at (888) 846-8091, or drop in M-F 8a-7p or Saturday 9a-2p.