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By: AgFed Credit Union

Welcome to AgFed Credit Union's MoneyDig blog! 

Get confident about your personal finances with a number of articles, tips, advice and more.


Money Tips for Buying a New Car

 Feb 16, 2021
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Buying a car can get complicated. You have to balance what you wish you could buy with your actual needs, not to mention your budget. We all want to get a fancy, brand new vehicle, but for some of us that’s not the best financial decision.


How do you find the car that’s right for you? Luckily, these days you have more information than ever before. Whether you’re looking for something new-to-you or just plain new, here’s some car-buying advice to make the process smoother for you.


  1. Look at the car you have

A lot of these considerations start with a simple, yet not-so-simple question: Why are you looking to buy a car? Is your old car on its last tires or are you just tired of it? Did you have a career or life change that requires a new vehicle? Are you looking for a fresh start with a new set of wheels?


There are lots of good reasons to be looking for a new ride, and it’s important to know what yours are. If you’ve got kids or grandkids you probably need some more space, and maybe some easy-to-clean seats. If you’ve picked up a driving job you need something that meets your employer’s specifications. So, what is it you like or dislike about your car? We’d recommend making a list of some sort to help you keep these elements in mind.


Your next step is to do some research and figure out what your current car is worth. There’s no sense in trading in a car for less than its value, and it might be worth selling to someone else who’s looking. Don’t forget to ask the experts, too. Resources like Kelley Blue Book can give you a great starting point.


  1. Get your financing in place before you visit a dealership

If you go car shopping without a plan, you’re more likely to have a bad experience or make a purchase you’ll regret. We recommend determining the maximum monthly payment that works for you ahead of time. If you’ve already got an idea of what you can spend, you’ll waste less time considering options that don’t fit your budget.


Part of this initial research should involve looking into financing and pre-qualification for your future car loan. You can do this through your credit union! Having this information before you visit a dealership means you already have a good option in your pocket, no matter what rate the dealer offers you.


Buying a car is a big financial decision, and doing your research means you probably won’t get sticker shock when you’re out shopping. If you take your time and are careful about looking things up, you’ll know the fair price range ahead of time. Don’t get overly confident though! Read everything carefully before you sign.


  1. New-to-you can be just as good

Are the payments on a new vehicle a bit steep for your blood? It’s always worth considering buying used. Don’t get me wrong - we all like that new car smell, but it comes with the new car price tag. A used vehicle might fit the bill just as well as a new one, and you can often find some “like new” options. As a bonus, you don’t have to watch your car’s value depreciate quite so much when you drive it off the lot.


Buying used also means your registration fees are lower in most states. If your new ride is three or even five years old, you should save a bit of money. You also don’t have to worry so much about the miscellaneous dealer fees. Some new car dealers like to add some odd fees like “dealer preparation,” which make buyers feel uneasy about doing business there.


Finally, cars with proper maintenance run just as well at 125k miles as they did 25k miles. Don’t make a mileage mountain out of maintenance molehill. It’s not hard to find a used car that’s in excellent shape. Even if you’re not comfortable with car maintenance, you can rely on the certification programs and extended long-term car warranties that the majority of manufacturers offer. When you buy a pre-owned car at the manufacturer’s dealership, it should meet their stricter criteria for certification.


One last thing - remember that list you made at the beginning? After you make your list, you might find that you like your current car more than you thought. If this is the case, it’s worth considering whether you want a new car at all.


If you own the car outright, fixing your current car’s problems could be cheaper than getting a whole new car. And you can always talk to us about a personal loan if those repairs are more than you want to spend right now.


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