What is part of the American dream? Start a family, have a house and a car. That goal is increasingly becoming a dream that is difficult to turn into a reality with the high prices of homes and vehicles. However, There are always alternatives and strategies to meet your financial goals. and today we are going to focus on explaining how you could save money when buying your car.
It is no news to anyone that car prices are sky-high and interest rates are high. The result: buying a car is expensive. At the moment, The average price of a new car is around $50,000.according to Kelly Blue E book. That represents a 30% increase over 2019 levels.
Used vehicles don’t offer much relief either: the average cost is already over $25,000..
And we are going to continue adding weight to our portfolio. Gasoline prices continue to rise due to international tensions and the conflict with Iranwhile inflation continues to put pressure on the daily expenses of millions of families.
All of this makes buying a car a challenge. However, to give a breath of hope to our pockets, There are some aspects that you should keep in mind when going with a dealership or seller. so that you are clear about how much you could spend in total when purchasing your vehicle.
The most common mistake when financing a car
Many buyers focus only on the monthly payment “looking cheap”, being low; But that can become a long-term financial problem.
“People say, ‘I want a car, it’s expensive; if we make payments longer, I’ll be able to afford it monthly,'” explained Jill Schlesinger, a CBS News business analyst.
At the moment, one in four Americans finances their car for 84 months, that is, seven yearsaccording to Edmunds data. The problem is that The longer the loan lasts, the more interest you end up paying..
Besides, The average monthly payment for a new vehicle now reaches $773 dollarsnot including insurance, gasoline or maintenance.
“We have a lot of people who pay a thousand dollars a month for their car payment,” Schlesinger said.
Therefore, specialists recommend doing the math before visiting any dealership. If a five-year loan is still out of your budget, the vehicle is probably too expensive for your current income..
Also They advise arriving with financing previously approved by a bank or credit union. This helps compare interest rates and avoids accepting unfavorable conditions at the agency.
How to find a cheaper car without making mistakes
User Reviews experts recommend keep an open mind and not focus solely on large SUVs or luxury trucks, as they tend to be much more expensive. In many cases, choosing a small sedan or a vehicle with fewer extras can save you thousands of dollars on both the initial price and on gas and insurance.
Another important recommendation is to research prices before leaving home.. Sites like Autos.com, TrueCar or Automotive Gurus allow you to compare inventories, promotions and real prices at different dealerships.
“The consumer’s best tool is to be willing to walk away from the negotiation,” Schlesinger said. “If you can walk away, you can negotiate a better deal.”
The specialists also They warn about paying thousands of dollars above the suggested price by the manufacturer. Although some dealers add additional packages or extra charges, that can seriously affect the value of the car in the future.
Is it better to buy a used car or repair your own one?
For those who cannot find a new vehicle within their budget, there are alternatives that can help save money. One option is certified pre-owned cars, known as CPO. by its acronym in English. These vehicles are usually only a few years old, come with a warranty, and usually cost less than a brand new model.
There are also drivers who are choosing to repair their own car. and wait for better market conditions. However, experts recommend Don’t invest too much money in vehicles that are already at the end of their useful life.
“Let’s say your car is worth $8,000. Don’t pay $5,000 to repair it.”Schlesinger explained. “At some point in the life of the car, it is better to buy a new one.”
Finally, specialists recommend reviewing the complete cost of owning a car, and not just the monthly payment you will pay. That means considering insurance, interest, gasoline and maintenance expenses.. It would be of no use to get a good deal at the dealership if, adding up all the expense of your vehicle, it could turn what was intended to be a dream come true into a nightmare.
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