Chapter 1. How do I decide on the right purchase?
You may have been dreaming of a certain car model for a some time. You may have a new job and you need to make transportation decisions, or you maybe you need a car for a road trip to move to another city or state. Regardless of your reasons, it is advisable to check out the questions listed below prior to making any purchasing decisions.
How to
Ultimately, the car and the money investment have to be the right purchase for you and your personal needs.
- Should I buy a new car or a used one?
- Where is the best place to finance my car purchase?
- Should I take the low-rate financing plan or should I take the rebate payment?
- Do I have enough saved for a down payment?
- How much can I afford on my budget in a monthly payment?
- How much, in total cost, am I willing to pay?
- Does my purchase follow the 20/10 rule in debt management?
- How many years do I plan to keep this vehicle?
- Is it better to lease or buy?
- Do I need a co-signer?
You will need to answer each and every question above. In addition, you need to do your own research in your local, city, and state market. Visit car lots, ask questions, collect information, check for sale ads, and verify sources. Consider dealer reputation, read "Buyer's Guides" stickers, read about new features and prices, shop around, and negotiate; but do not buy until you are fully satisfied with your purchase terms!
One of the most difficult decisions when buying a car is to choose between buying a new or a used vehicle. This will depend on your perception of what owning a car means to you and how you would define the purpose and usage of a car. Is it a status symbol or just a transportation vehicle to get you from point A to point B? You need to assess your relationship with the purchase before you can make such a decision. To help you decide logically, let's go over advantages of buying a new or a used vehicle.
Yes, life gives you homework assignments--if you are to pass with flying colors, you need to apply the principles of market research you may have learned in class before you drive out of the parking lot.
Practice
Now that you know the process of making financial decisions, think of paying it forward and discuss your findings with a friend or a family member.
Congratulations! You can move on to Chapter 2. How do I shop for a car loan?
To review the full module on Car shopping, click here.