Choosing to buy a new or used car used to be easy. That has changed a bit thanks to the pandemic, especially due to the lack of car chips. While new cars are becoming more common, rising interest rates and general inflation may have you considering options you never would have before, such as buying out a lease or buying from a private seller—or becoming a private seller. Even if you requires When buying a car, it can be trickier to find what you want, regardless of the price range. Here’s what you need to know.
If you lease, your car may be worth more now than it was two years ago
You may have the option of buying out your lease at a lower cost than the value of the car. It̵7;s a rare situation, and it presents some unique options. For example, you can buy out the lease and then sell it privately, giving you extra money to put towards a down payment on another trip. Or you can buy your leased car and keep it with equity. Talk to the dealer you leased it from to learn more.
New cars are hard to come by and deals on used cars can be hard to find
Factory lead time for new cars can be up to three months, so give yourself time if you plan to customize a new car. Because of long waiting times, more people are buying used than ever, making the market more competitive and used car prices higher than normal. It’s best to do some research online and at the lots in your neighborhood to know your options. You can also consider buying privately, after you have thoroughly researched the market. If you are buying privately, be sure to do a background check on the vehicle using CARFAX or a similar service.
Your checklist for buying new or used
Step 1: Get your finances in order
- Decide if you want a monthly payment. And if so, how much do you want to pay each month. Knowing this number will help you make decisions about whether to buy or lease and how to set your price range.
- Get pre-approved for a car loan. If you’re not leasing or paying cash from your savings, you need a car loan. Most dealerships offer financial assistance (or they’ll help you find a car loan), but you’ll be in a better position to negotiate if you have this step ticked off before you walk onto the lot. In addition, if you decide to buy a car from a private party, your finances will be ready.
- Shop for the best interest rate. Lenders consider different factors when underwriting car loans, so it’s a good idea to look for at least four or five options.
Step 2: Make your wish list
You may dream of that sporty two-seater, but will it really work for your lifestyle? Ask these questions to guide your search:
- What is more important: space, comfort or sporting utility?
- How many seats do you need? Is it just you and one or two passengers? Or a whole crew? (Choosing between an SUV and a minivan alone can be quite a decision.)
- How many miles do you intend to drive per year?
- Are you transporting something, like a boat or RV? If so, how much weight do you often pull?
- Do you need four-wheel drive for snowy or icy weather, or does two-wheel drive provide what you need?
- How much are you willing to spend on gas? And what are your expectations for fuel efficiency?
- If you are considering an electric or hybrid model, do you have a way to charge an electric car, or are there charging stations nearby?
Step 3: Do your research
- Check dealer websites in your area to find out what stock is already nearby.
- Review Kelley Blue Book values and CARFAX reports.
- If you are thinking of buying a car online, read this article on how to buy a car online.
- Chat with us to give you an idea of which cars will cost more or less to insure, so you can budget for your new journey.
Step 4: Start driving and shopping
- Reach out to private sellers you’ve contacted online or know through family and friends.
- Talk to a dealer. Even if you don’t think you’ll buy from a dealer, you’ll learn a lot from the conversation, and you’ll have more opportunities to negotiate your options.
- Test drive the tours that look most interesting. Try at least three or four.
- Before you make an offer, put your test drive experiences against your wish list and your budget to make sure you’ve considered the purchase from multiple angles.
The last step
Once you’ve switched to a new trip, be sure to contact us.