Buying a car isn’t as easy as you think.
In the movies, the protagonist walks into a dealership and the camera cuts away to him or her driving a car off the lot. But what about all that time in between? Young adults and teens today are buying their first cars and don’t have a clue what things like APR percentage is. It’s important to educate yourself on the current car market and what to expect when you get to the dealership. If you don’t, you’ll end up being coerced into a purchase you don’t want and can’t afford.
Last weekend, I was almost one of those people. It was a 2011 red Mini Cooper, and it was glorious. However, I’ve only been out of school for two months. I didn’t feel ready to buy a car (I had only gone to get an idea of what I wanted), but I took it for a test drive, got my credit score checked out, and almost signed my life away.
More experienced people call this situation in a young person’s life as being “married to your car.” I had no idea that car payments ran for 5 years—not months, years. As I sat there, staring down at the projected 6.9 APR (which I was later told was much too high) I started to have buyer’s remorse—and I hadn’t even bought the car yet.
A Mini Cooper is a reward car—a reward for driving clunkers and boring (and reasonably priced) sedans first. I had yet to pay the price, so I was going to have to wait my turn. However, there are still tips you can use to help purchase the perfect car. Here are 4 essential tips you can utilize when shopping for a vehicle:
- Figure Out What You Can Afford Before You Get There
Dealerships can be like candy stores. They’re designed to show off the best they can offer. In addition, they present you with free drinks and snacks, plenty of lounging areas, and big screens projecting the FIFA World Cup. You must look beyond the mirage. It’s a haze of comfort designed to ease you into a compliant mood. And it works, trust me. Before they can lull you into a purchase you can’t afford, go in with a clear head and a budget you will not exceed, under any circumstances. This will ensure you not getting hoodwinked into something you’ll regret.
- The Tag Price is Just the Beginning
This was painful to learn. Dealerships list the price of the car in the window—but that’s not where the money ends. You have to consider insurance, gas, sometimes even menial things like parking passes. These things can double your monthly payment and really put a dent in your hard-earned savings. When buying a car, take a look at the approximate monthly payment and double it, just to be sure—that’s your new monthly payment. If you can’t afford it, you’ll have to look for something less expensive.
- No Impulse Buying
Yeah, we all want Lamborghinis, Porsches, and Mustangs, but there’s rarely a way that you will find yourself in a position to afford it at your age. However, for all the rest of us, it’s a great goal to work towards. Keep in mind that impulse buying often leads to buyer’s remorse once you realize that you have to pay insurance out the roof, the car is a gas guzzler, and cops are more likely to pull you over for speeding in a sports car than anything else.
- Learn about APR Financing
This was the biggest shock. It’s not something they teach in schools (and I so wish it was). I don’t have a head for numbers, and I know there are many who are in the same boat as I am. Learning about APR percentages is very important; you have to know how much you will pay in regards to how much you put down on the start, because interest only applies to the amount you haven’t paid anything on yet. So those commercials that advertise cars you can buy for just a dollar and take it off the lot? They aren’t telling you that now you’ll have to pay 66-72 months of a car payment that is through the roof (imagine half your paycheck as a barista going straight into your car. Every. Single. Month. For five years. Yikes). So do your homework!
A great article with more tips can be found here: 10 Tips for Regret-Free Car Buying