Finance Globe

U.S. financial and economic topics from several finance writers.
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How can you Avoid Overspending on a Car?

How can you Avoid Overspending on a Car?

The excitement of shopping for a new car is often overshadowed by the fear of paying too much. Not only do you need to negotiate the best deal possible, but the final price must fit into your budget.

There are many steps you can take to avoid overspending on a car, including:

1. Know your numbers. This means two things: the price you should pay for the car, and the amount you are comfortable working into your budget.

There are numbers everywhere when purchasing a vehicle. You need to be comfortable with each and every one. If for any reason you feel you are overspending, take a step back and reassess.

2. Shop used instead of new. You may be tempted by the shine and new car smell, but this could work against you in terms of your budget. If you want to get a reliable vehicle for a more affordable price, consider the many pre-owned options that exist. This could be the one step you take that allows you to save money on your purchase.

3. Search for your own bank loan. It’s not just the sticker price that impacts your monthly payment. The interest associated with your loan should also be considered. If you let the dealer’s finance department do all the legwork, you could end up with a loan that is more expensive than it has to be. If nothing else, take the time to personally receive auto loan quotes. This will give you a clear idea of what you qualify for.

It is easy to go into the buying process with the idea that you won’t overspend. Unfortunately, you could lose sight of your goals once your step foot on the dealer’s lot. If you want to avoid overspending, keep these three tips in mind at all times. 

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Comments 2

Wanderer on Thursday, 10 December 2015 20:42

As Chris mentioned buying used can sure help the pocket book. For myself, I used to buy dealer lease turn backs or promo vehicles the dealers got with 5,000 to about 20,000 miles on them which still had the new car warranty. Price greatly reduced for a like new car at an affordable rate (bought several cars this way).

As Chris mentioned buying used can sure help the pocket book. For myself, I used to buy dealer lease turn backs or promo vehicles the dealers got with 5,000 to about 20,000 miles on them which still had the new car warranty. Price greatly reduced for a like new car at an affordable rate (bought several cars this way).
Frank on Thursday, 17 December 2015 18:51

This information ties in very well to your blog post: "5 Questions to Answer Before Applying for a Car Loan". My fiance and I just purchased a car last weekend. We researched thoroughly before talking to any dealer as the information online is incredible. We also called several banks to obtain quotes on financing. I would say we had as much information as possible, and it certainty helped. We were able to negotiate a lower price on the car as well as obtain a lower rate from the dealer. The process was not fun, but I am glad we did the work.

This information ties in very well to your blog post: "5 Questions to Answer Before Applying for a Car Loan". My fiance and I just purchased a car last weekend. We researched thoroughly before talking to any dealer as the information online is incredible. We also called several banks to obtain quotes on financing. I would say we had as much information as possible, and it certainty helped. We were able to negotiate a lower price on the car as well as obtain a lower rate from the dealer. The process was not fun, but I am glad we did the work.
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