Greensboro, NC -- If you're considering buying a new car, there are some things you'll want to take into consideration first. "2 Wants to Know" turned to Certified Financial Planner Matt Logan for advice on some of the things we should think about during the car buying process.
Logan pointed out that these tips really only apply to people who use cars to get from Point A to Point B. Car collectors and enthusiasts would want to follow different rules when buying cars.
Slow Down. Logan said unless your current car is dead and you need something immediately, take your time. Nobody ever looks back on a car purchase and wishes they were more emotional and quick tempered in buying a car. Take your time and do not ever purchase a car on your first day of looking. This will allow you to make the decision on your own pace and to fully think out all of the different aspects. He also said you should shop rates before buying. If you plan on taking out a loan to buy a car, call your bank and a couple of others to see what the going rates are for cars.
Consider This: Think about how long you will own the car. If you buy cars every two years, you probably should not be looking at some of the long term car loans out there today. In fact, Logan recommends people not go beyond 48 months on their car loans. He also said people should know the total cost of the car. In his example, Logan said, you could get a great deal on a Hummer, but the total cost of using that and getting horrible gas mileage could drive your monthly budget way up. So Logan suggested a buyer make sure they know the total costs based on the miles you drive per year, as well as the cost of the car.
Don't Be Afraid! If considering buying a used car, a person should not be too scared of high mileage. He said if you let someone else take the brunt of the depreciation of a new car before you buy it, you can get a better deal. In fact, Logan said he and his wife tend to look for cars with 75,000 miles on them that are about 3-years-old. This way they're getting a newer car that has been driven high miles. People used to sell cars before they hit 100,000 miles, but many of the cars built today are just getting broken in at that time and can easily drive 250,000 miles with regular maintenance.
Key Words Depreciating asset. Remember, this is a car. This is not an investment. This is a depreciating asset that should help you get from Point A to Point B.
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