Satellite radio keeps me in tunes when I’m cruising in my car. One of the channels recently had a marathon of songs about cars. It was an extremely long list of pop, rock and country explicitly detailing Americans’ love affair with their automobiles. I learned that more than 13,000 artists and 72,000 songs mention cars, trucks and 4x4s in their lyrics. One such song is one everyone has probably heard. The famous Janis Joplin song about buying a Mercedes called Mercedes Benz:
“Oh Lord won’t you buy me a Mercedes Benz,
My friends all drive Porsches,
I must make amends…”
An interesting fact is Mercedes Benz is the number one brand mentioned according to my internet sources.
Considering the love affair American’s have with their cars; it is no surprise that I am often asked about the car buying and leasing process in my practice. Getting a new vehicle is excited and fun, but the process can be a stressful and frustrating experience because there are so many things to consider it can be overwhelming. My advice is to ask yourself the following questions to narrow down what type of car you need and can afford before you start shopping for a new ride:
Should I buy a new or used car?
Even this simple question can get complicated. New cars come with a higher price tag but peace of mind because a new warranty covers the vehicle. Buying a used car will typically be a better deal if you get one with low miles and the extended warranty is available from the manufacturer. Also, get a complete car history report if buying used to ensure the vehicle is a good deal.
How much do I want to spend on a car?
What does your budget allow for a monthly car payment? These days a car can be financed for up to seven years, but I would advise not going beyond six years, and don’t forget to add a trade-in value for your vehicle when you are doing your calculations.
What kind of car do I need?
Is this a family car? Are you single and looking for a sportier car?
Is it for commuting to work? How far is the commute? These are a few things to ask yourself to determine what kind of car makes the most sense for your individual needs.
What features are important to me?
Determining the features you want and can live without will help narrow down the search by eliminating cards that do not satisfy your features on your must-have list. Car features have changed a lot over the last twenty years and can add to the price. So making a list of what you need in your new vehicle before you start shopping will assist you to stay within your car budget.
Should You Lease or Purchase?
Now that you have decided what car you want to drive and can afford, it is time to determine how to acquire it.
Leasing a new vehicle can provide a smaller payment, but it also locks you into repeating the lease process in three years. Another vital factor to consider is how many miles you drive annually. A leased vehicle has a limit on the miles that can be driven in a year, and you will be charged if you go over this limit. As you can guess, these charges can add up quickly. If you drive more than 15,000 miles per year, leasing is not a good option, but if you drive less than 12,000 miles a year, you might want to consider leasing instead of buying your next car.
How is your credit score?
This score will impact your ability to finance the car at a lower interest. The higher your credit score, the better your interest rate will be.
With a bit of preparation by following these tips, the car buying or leasing experience can be much more enjoyable and keep you from purchasing a car out of your budget.