Things to Know When Buying a New Car

Knowledge is power and it can also save you a lot of money.  This is especially true when you are buying a new car.  You no longer have to be clueless and put yourself in the hands of the dealership.  There are certain things that you need to know that will save you a tremendous amount of time and money when buying a car.  If you are in the market for a new car then make sure that you know these things prior to buying it.

• Know what you owe on your current vehicle - With longer loan terms, some consumers are upside-down in their current vehicle.  Due the vehicle's depreciation, the dealership is not going to give you enough to pay off your loan.  What they will do is pay off your loan and add the amount that you are upside-down to your new car loan.  This means that the $30,000 car you are purchasing is now financed for $40,000.  This is not a great place to be.  There are many online calculators that will allow you to calculate how much your vehicle depreciates and what your value to loan amount is.


• Know the trade-in value of your vehicle - While most dealerships make their deals look very good, the trade-in value offered often has some wiggle room in it.  The more you get for the vehicle that you are trading in, the less that you will owe on the vehicle that you are buying.  You need to ensure that the trade-in of your old vehicle and the purchase or your new vehicle are separate.  Know how much the dealer is offering on your trade before you begin to negotiate the price of the new vehicle.  There are many online sites that will help you to determine your vehicle's value.  Some smart consumers choose to sell the vehicle that they have outright instead of trading it in.  This is especially great if you have more than one vehicle or can afford to wait.


• Research the interest rate and find the best financing - Too often people depend upon the dealership to locate their auto financing.  While this is convenient it is one of the biggest mistakes that people make.  The dealer makes money off of the financing that they find for you and some will steer you to the lender that is giving them the best deal which may not always be in your best interest.  Your local bank or credit union may offer a better deal than the dealership.


• Know the cost of ownership - The cost of owning a car goes much further than the payments.  The cost of insurance, maintenance, gas, tires and even the cars depreciation all figure into the cost of ownership.  Too often people only consider the cost of the monthly payment and not everything else. 


• Know about any discounts, manufacturers or dealer incentives that are being offered - While most dealerships participate and offer the dealer incentives, rebates and discounts some may not.  Knowing that they are available will ensure that you get them even if you have to go to another dealer.