8 Financial Questions to Ask When Buying a New Car

Whether you’re looking for a new car to replace an old one, an additional family vehicle, or a toy to joyride in on occasion, purchasing a vehicle is a huge financial responsibility. Even if you’ve managed to save enough money to buy a car outright, there are associated costs of car ownership that you need to fully understand before you commit. Before driving off the lot or signing on the dotted line, there are several questions you want to ask the dealership to ensure you’re making the most economically-wise decision.

What’s The Total Cost of the Car?

Car dealerships are masters at luring buyers to their lots. They use aggressive marketing tactics and tricks to encourage those interested in buying a car to come in. This can include advertised deals like no money down, no interest for several months, or even low monthly payments. As you look around the lot for cars within your price range, make sure that you find out what’s included in the sticker price? The price advertised may not be the number you end up paying at the end of the deal.

What’s the Interest Rate?

If you don’t have the cash outright to buy a car, you’ll have to take out a loan. Loans, though convenient, will drive up the total cost of owning a car. Find out in advance, what their financing options are and what the interest rates will be. This is the amount of money you’ll be required to pay on top of other associated costs for the car. Interest rates can easily add several hundred or thousands of dollars to the price of the car.

Does it Come with Warranties?

Warranties help car owners to reduce the initial costs of owning the vehicle. They are service contracts that can cover everything from basic maintenance to serious repairs. You not only want to find out if the car you’re considering has a warranty, but what’s included. Do they pay for oil changes, tire rotations, and tune-ups? Or does it just cover brake, engine, and serious repairs? How long will this warranty last and more importantly, do you have to pay for this warranty?

What Other Costs Are Associated?

When you buy a car you’ll need to have more than a downpayment to drive off the lot. In most instances, buyers will need to pay for insurance, motor vehicle registration and licensing fees, and sales tax. Ask the dealer upfront what those costs will be so you can ensure you have what you need to take your car home.

Are There Any Deals?

Once you have a general idea of the full price of the car and warranty services you can now negotiate. Find out from the dealer if there are any deals you might be able to capitalize on to reduce the costs. They may be willing to reduce the sticker price, get you a lower interest rate, or include an extended-warranty free of charge to help lower your out of pocket expenses. As not all deals are advertised, it’s simply best to inquire.

What’s the Gas Mileage?

Gas is an ongoing expense of owning a car. Though you may not have an exact cost of how much you’ll need to gas up your new ride, a general idea will let you know if you can truly afford to own a particular vehicle. Find out what the gas mileage is on the vehicle. The higher the gas per mile, the less you’ll spend on gas over the life of the vehicle.

What Common Repairs Are Needed?

Not all cars are designed the same. Some can go years without needing anything more than fluids changed and new brake pads. Yet, other brands require maintenance every few months to remain efficient. Find out from the dealer as well as through your own online research how often you’ll need to budget for repairs on your vehicle. Not only that, but you should also find out the types of things that go wrong with the car. A few hose replacements might not be too expensive, but if a car is known to have engine or transmission trouble early on, this could cost you thousands of dollars.

How Long Does it Last?

If you’re buying a car for personal use to and from work and school, you’ll rely on it a lot more. The more wear and tear placed on the vehicle, the sooner you’ll have to replace it. Find out ahead of time just how durable the car you’re buying is. With regular maintenance, how long do the make and model typically last?
Buying a car is a lot more than choosing a make, model, year, and color and driving off the lot. It’s a significant financial investment that requires a complete understanding of its associated costs. This not only means inquiring about the sticker price and cost of the sale but getting an idea of what costs you’ll be dealing with over the lifespan of the vehicle as an owner. Preparing and asking these questions ahead of time allows you to make the best decision possible.

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