5 Car Buying Do’s and Don’ts

Auto Smarts

Take the guesswork out of car shopping with Farmers Car Shopping Series. Whether it’s finding the right car for you, estimating what you can afford, or finding the best deal, we’ve got you covered with practical advice and tips!

It’s easy to get caught up in the excitement of buying a new car. Doing your homework before you visit the dealership though, can mean the difference between overpaying or getting the deal you want.

Brush up on these car buying dos and don’ts so you don’t end up with buyer’s remorse.

1. Do Know What Kind Of Vehicle You Are Shopping For!

With so many cars to choose from, how do you pick one that’s right for you? Start by selecting the type of vehicle that best suits your lifestyle needs; sedan, minivan, compact car, convertible, coupe, etc.

2. Do Your Research Ahead Of Time!

Doing your research ahead of time can help you get the best possible price. Spend a bit of time investigating features, options, and trim levels available on the cars you want to buy.

It’s important to know how these features stack up because they can really drive up the cost of your new car. Identify the “must-have” or “good-to-have” features that interest you, and the “can-do-without” features you can’t afford to waste money on.

(Keep in mind that most vehicles are packaged according to specific trim levels, and can’t always be purchased to specific requirements without a special order.)

3. Do Know How Much You Can Afford.

You’ve narrowed down the list of potential cars to buy. Now comes the hard part: creating a budget. Don’t make the common mistake of splurging on a premium car, while living on an economy-car budget!

Visit “Deciding on a New Car Budget” to estimate what you can really afford.

Usually, the rule of thumb when buying a new car is to put about 20 percent down, limit the term to no more than five years (60 months), and keep your monthly payment below 10 percent of your income.

Consider these key factors when calculating costs:

  • Don't forget to factor in annual maintenance; some cars can be quite spendy.

  • If you know your average commute, figure out in advance what you're likely to spend on gas by comparing your mileage to the EPA Fuel Economy Estimates on the window sticker.

  • Consider the total purchase price after sales tax and dealership fees, and THEN evaluate the monthly cost, otherwise, you might just wind up extending your financing terms to keep your payment low.

  • Once you know your total price, financing the car should cost about $20 a month for every $1000 financed over 60 months (for buyers with good credit), so keep that in mind when you’re looking at the bottom line.

  • Finally, it’s important to know your credit score before you take a test drive. You don't want to be surprised by high rates when you reach the financing department; otherwise, you risk being told you don’t quality to finance that gorgeous new ride.


4. Do Contact Your Insurance Agent To Learn About Premiums Ahead Of Time.

It may seem backwards to check with your insurance agent before you actually purchase a new car, but if you knew the premiums were going to be prohibitive for a certain model, would you be inclined to choose a different vehicle or trim level?

For example, you may discover that one trim level costs less to insure than another, or that there’s a difference in the premium between the two- and four-door versions of a specific model.

Don’t forget to consult with your agent before you commit! Your Farmers agent can help you compare insurance rates on different models.

Did you know that the type of car you drive could affect your premiums? Visit 5 Ways to Lower Your Car Insurance.


5. Don't Trade In A Car That's Worth Less Than You Owe On It.

Why? Because the balance of your old loan may be consolidated into the new car's loan amount, combining the debt of two cars into one, larger, loan.

And while we're on the topic of trade-ins, save your trade-in until the end of your negotiation process; consider that a separate transaction.

Only after you settle on a purchase price for your new car should you start negotiating the terms of the potential trade of your used car.

Not sure what your vehicle is worth? Look it up using ClearBook, a comprehensive source for used car market list prices. As part of the Farmers Car Shopping Service, you can research your car against millions of used car listings and sales transactions to help determine your used car's trade-in and expected selling price.


Looking for a Streamlined Car Buying Experience?

The Farmers Car Shopping Service is a great tool to price your new vehicle. Our pricing guides allow you to configure a vehicle you’re interested in buying by make/model/trim and down to the options and packages, giving you an idea of what the final cost of the vehicle will be (subject to availability and based on dealer inventory).


Source: Truecar.com

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