Weigh several issues before buying a car

This was originally published on Monday, September 26 ,2016 in the Pacific Daily News.  Click here to subscribe to the PDN.

Many of us purchase a vehicle revolving around the make, model, and style of a vehicle.  Whatever the reason that you need a new vehicle take some time and do  thorough research on the price, its reliability, and your finances.

  • Affordability.  Of course we shop with our eyes. That is why car manufactures constantly change the look of their vehicles.  Sit down and do a spending plan. Can you afford the monthly payments and insurance? The last thing you want is for your car to be repossessed because you could not afford to make the payments.
  • Test drive.  Take the car for a spin.  Be sure that you are comfortable in it.  If you are uncomfortable it could cause safety issues.  If you have a family, take them along and see if they too are comfortable.  If you plan on having the car around for a while and you have small kids remember that they will need space to grow into. Besides comfort, look for how the car idles.  It should be quiet and smooth. Are the car’s controls easily accessible? Can you read the dashboard gauges clearly? Do you have a clear view out of the car all around you? Does the car handle well?  It should be responsive to accelerating and braking.
  • Impulse buying.  No matter the reason for a new car take your time and research the make, model, and styling of the car. Do your research and be happy with your purchase.
  • Timing.  When looking for a new car, the time of year when you purchase it can result in savings. According to Consumer Reports the time of the year, month, day of the week and even the time of day can help you save money. When the new models arrive dealers are eager to make room.  To make room and sell those previous end-of-model-year cars, the dealers give the best discounts.  Do take into account that end of the year does not necessarily mean October through December.  Manufactures have different times of the year when they release their new models.  Contact the dealership to see just when their new models arrive.  One drawback to waiting is that you may not find the exact car you want because they sold out. End of the month or yearly quarter can increase your chances of saving money.  Managers and salespersons must meet a quota and get compensated when they meet that quota or exceed it.  This may be a good time to use your negotiating skills. Rebates are temporary offers to help clear out a model year during specific days of the year.

Of course, there are times when you don’t want to purchase a new vehicle:

  • When a car is in high demand.  That is usually at the beginning of a new model year.  Research what is new between the last year’s model and this year’s model.  Sometimes only minor things have changed and everything else remains the same.  It is best to also wait till car review websites have a chance to review the performance of the newer model.  There are websites with comparison tools that can assist you.
  • When financing your vehicle. The auto dealers or finance institutions will run a credit check.  Each dealer you visit will run a credit check if you apply.   Each time someone looks at your credit it counts as an inquiry which can have a negative impact on your score.  Know what vehicle you want, hold off until you are certain to purchase, and don’t agree to a dealer’s credit check until you are ready to purchase.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at moneymattersguam@yahoo.com and read past columns at the Money Matters blog at www.moneymattersguam.wordpress.com.

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