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Acing the car-buying test

Posted on Tuesday, September 27, 2016 at 9:03:25 PM

Purchasing a vehicle is among the most exciting activities of all for many consumers, but can also be a stressful one. If individuals are not smart and safe when going about the shopping process, they could end up with a bad deal on a car, a major hit to their financial health and other less than preferable outcomes. Whereas due diligence was relatively difficult in the old days, it is now easier and more fruitful than ever thanks to the internet and decades' worth of demands from car buyers for greater transparency and accountability. 

So, individuals who are looking to buy a vehicle should ensure that they are using every tool available to them to make the smartest possible decision. This includes shopping for not only the car, but setting forth a budget and applying for a loan when in need of additional credit. Right now is a great time to make a purchase on a new or used car thanks to several factors, especially for the knowledgeable consumer. 

Avoiding common oversight
Cheat Sheet recently published a blog post written by contributor Erika Rawes who described some of the mishaps so many consumers make when going into the car buying process. For one, she urged individuals to begin using the websites and other sources of useful information available to them - many of which being free - to research vehicles of interest, as well as dealers. Citing data from the National Automobile Dealers Association, she pointed out that an estimated 200,000 consumers never did any research on the web for their purchases ahead of finalizing the deal. 

According to the author, setting a tight budget is also important, and that process transcends just putting a price point on what you can afford to put down or spend on the car itself. Rather, consumers also need to assess the full range of expenses involved, such as insurance and loans, to avoid the prospect of putting themselves into a hole in which they will struggle to get out.

Furthermore, Rawes noted that spending plenty of time evaluating all of the potential cars of interest, as well as never allowing oneself to make any type of impulse purchase on a vehicle, will generally lead to a less risky outcome. 

Finding the right lender
Many consumers end up needing to take out a loan on their new or used car purchases, and right now is actually a great time to do so thanks to competitively low interest rates across the marketplace. However, when they use the wrong lender for these services, they could end up paying an enormous amount of money on top of the value of the car throughout the lifespan of the borrowing term. 

As such, always consider working with a local, community bank that offers a personal touch to the loan application, evaluation and approval process, as this can lead to a lower overall price point.