Purchasing a brand new car will be a big expense, and is typically one of the most expensive purchases you'll make aside from your home. That is why you want to make sure you're making a good decision by following these 4 tips throughout the car purchasing process.
Look Into Financing
The dealership may be offering a special promotion for a low interest rate, but you mat not qualify for it based on your credit score. That's why it is important to shop around for financing before you go to the car dealership. By understanding how much a bank will lend you, and what interest rate they are offering, it will help you narrow down the kind of car you can afford.
Set A Budget
Before you set foot in a car dealership, it is a good idea to create a budget for how much you will spend on a car. You now know how much a bank will lend you, but if it's a high amount, you shouldn't take advantage of borrowing every dollar you can.
Your car payment should not exceed 20% of your family's income after paying taxes. This will help you leave room for all the additional costs that go with car ownership, such as insurance, gas, and maintenance.
Research Your Potential Models
Once you have a few models in mind that you want to see in person, you should do some research before you get to the dealership. You will want to look up what is called the invoice price of each model. This will tell you what the dealership paid for the car, which will help you with negotiating. To find the invoice price, use your favorite search engine and type in the model you are interested in along with the phrase invoice price.
It is common for dealerships to offer incentives to take a particular model of a car. For example, there may be a cash rebate on a model that has been sitting in the lot for awhile and the dealership wants to get rid of it. These cash back rebates are given back to you after purchasing the car, and you can decide to apply them directly to your loan or hold on to the money and gradually pay off your car.
Now that you know these 4 tips, you'll be well prepared to purchase your new car at a Toyota dealer or other local dealership.