How to be a Smart Car Shopper

It’s one of the bigger purchases we make every so often, but unfortunately, there is a general lack of education on how to properly buy a car. Every day Americans need to educate themselves on matters of money, large purchases and financing. Otherwise we fall into the trap of buying what we want and not what we can truly afford.

Buying a car can be an exciting and satisfying experience if done right. The challenge is that many of us buy on emotion.  This can end up hurting us not only financially, but also with our credit score.

Here’s how to be a smart car shopper:

  1. Be clear on your budget before you start looking.
  2. Buy with cash if you can.  If you can’t, then don’t spend more than 5-10% of your monthly income. For example, if you have a  monthly net income of $4,000, limit your payment to  no more than $200-$400 a month
  3. If you’re buying used, buy the latest body style but with its oldest year.  This can save you somewhere around 30-60% of the new car price, but you still get the car you liked.
  4. Make sure the car still has a warranty on it for at least 18 months.
  5. Look for low miles. Try to find a car that has less than 10,000 miles average per year on it.
  6. Avoid dealerships if you can. Try sites like Craigslist or EBay
  7. Always have your personal mechanic look at the car when buying it used.
  8. Don’t buy on emotion.  Wait six months before you buy the car you want. Patient buyers get the best deals. Don’t be pressured into a decision.

These guidelines can be applied by people in all income brackets. If you want a car that you can’t yet afford, set a goal for yourself to get there. There is sweet satisfaction in rewarding yourself with the car you’ve earned.

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