You made the right choice by getting your hands on this 2015 Loansfunda Auto Buying Guide. And you just took the first step toward getting into your next vehicle!
We’re going to help you develop a road map for purchasing your next car by introducing you to what you need to know before you head to the dealership.
By the time you reach the end of this guide, you’ll be car shopping with confidence,because you’ll know how to:
• Determine what type of car is right for you.
• Secure your auto financing before you begin to shop.
• Take control of your financing and purchasing choices.
So Let’s Start….
The first step toward buying a car is finding out how much you can spend. To do that, enter your monthly income after taxes in the worksheet below and subtract your monthly expenses. Add additional expenses, if necessary. The remaining balance is an estimate of what you can put toward your monthly auto payment.
Monthly Living Expense Worksheet
|Monthly Income & Savings:|
|Monthly Income After Taxes||$/INR||00.00|
|Insurance (Home, Auto, Life)||-$/INR||00.00|
|Credit Card Payments||-$/INR||00.00|
|Other Creditor Payments||-$/INR||00.00|
|Other Vehicle Payments||-$/INR||00.00|
Remaining balance for your auto payment
The 20% Rule
To estimate your car loan amount and monthly auto payment, use the 20% rule. Your monthly auto payment shouldn’t exceed 20% of your net monthly income. Simply multiply your net monthly income by .20 to get your estimated monthly auto payment
Researching Cars and Costs
Chances are, your heart was already set on a particular car before you came across this guide, but is it the best option for your lifestyle and budget? Are you better off with a new or pre-owned car? Research is the key to finding out.
Pre-owned Vehicle Research
Many pre-owned cars now come with manufacturer-sponsored certification programs and extended warranties, which make them more reliable than before. It’s still good to give a pre-owned car a thorough inspection just to find out if any repairs will be in your near future.
Accessories and Add-ons
Accessories and add-ons can increase the value of the car, but understand that they will also increase the total price and your monthly auto loan payment. Below, we’ve listed popular accessories that you may want to add on to your new vehicle.
From the list below, mark which items you consider to be a need or a want. This will help you choose which accessories are necessary and help you stay within budget.
Price Comparison Worksheet
As you narrow your car search, the Price Comparison worksheet below will help you determine an estimated price for the vehicle you’re interested in.
These Topics will be updated soon….
Financing Your Car
It’s important to understand your credit situation before determining if you can finance a car, who your lender should be, and when you should begin the process of obtaining your auto loan.
Your Credit Score
A credit score is a number between 300 and 850 that is used to help determine the likelihood of a borrower paying back a loan. Your score is determined in part by your credit payment history. It’s a great idea to review your credit report for accuracy at least once a year. If you believe it’s inaccurate, you have the right to challenge that information
• Consistently pay your bills on time.
• Pay down your debt.
• Don’t open a new line of credit, like a credit card or home equity loan.
• Maintain a solid job history.
When To Finance
Have your auto financing in place before you visit the dealership. This way you can focus on getting the best price for your car. You’ll know your financing terms up front, and that’s one less thing to negotiate at the dealership.About Interest Rates
About Interest Rates
Having a fixed interest rate for the life of your auto loan allows you to know what your monthly payment will be month after month, with no surprises. Some financing companies offer variable APRs (Annual Percentage Rates) that fluctuate based on your payment history.
To help you decide what monthly auto payment or loan amount fits your budget, use the Monthly Car Payment and Auto Loan Amount Calculators below. Check out our current auto loan rates to get an idea of what your APR (Annual Percentage Rate) could be.
Making the Deal
Too often, people try to negotiate all elements of a car deal at once. The fact is, your purchase is several transactions that should be negotiated separately–besides securing auto financing, there is a negotiation associated with buying the car and trading or selling a car that you already own or lease.
Visiting the Dealership
There’s usually at least one dealership in every town and they provide the opportunity for you to get to know your options up close and personal. We suggest you visit a few to research the vehicles that you’re interested in and to take them for a test drive or two.
Buying Your Car
The key to fair negotiation is equal knowledge. You need to know as much about how a car is priced as your sales consultant does. By researching vehicle pricing before heading to the dealership, you’ll become just as knowledgeable.
Trading Your Car
You can expect a dealership to offer the wholesale value of your trade-in, minus deductions for excessive wear and tear and high mileage. Why the wholesale value instead of the retail value? When the dealership buys your used car, they are taking on the extra costs of selling it to someone else.
Selling Your Car
If you want to get a higher price on your current vehicle, consider selling your car privately. Just remember, you’ll have to advertise it, take the calls, meet the prospective buyers, let them test-drive your car, and handle the financial transaction.
• Be Flexible on Features. Be prepared to compromise, but only on the extra features that are not on your need list.
• Ask Questions. Be sure to understand the dealership’s offer and have them explain each number presented to you.
• Be Prepared to Wait. Buying a vehicle is big commitment, so be prepared to take your time at the dealership.
• Get It in Writing. Have the sales consultant give you a quote with the price, terms, and options that are included in the deal.