Page 9 - Explore Your AAA – AAA Southern Pennsylvania – Summer 2021

Car Buying Tips
The process of buying a car can be overwhelming and sometimes difficult, especially for those first-time car buyers. Here are a few tips to help guide you through the process.
HOW MUCH CAN YOU AFFORD?
Determining what you can afford should be your first step in buying a car. Consider down payment, monthly payments, interest, insurance, taxes, fees and operating expenses.
Negotiate for the vehicle and financing separately. When you have an idea of how much you will need to borrow, apply for a loan. Don’t assume all loans are created equal – it pays to compare. In addition to your credit union or bank, check out online lenders. With a pre-approved loan, you know your true buying power.
Make your down payment as generous as possible. This reduces monthly payments and interest on the loan. If you don’t have good credit, you will need a larger down payment, because you won’t qualify for the lowest interest rates.
To calculate monthly payments, you need to know the vehicle price, down payment, interest rate, loan terms (number of months), value of your trade-in, and any cash rebate that you can put toward your down payment.
The loan term and interest rate determine how much you will pay for your car over and above its price. Interest is spread out over the life of a loan and varies from month to month.
In comparing loan offers, remember that federal laws dictate that lenders must clearly define the Annual Percentage Rate and total amount of interest you will pay.
As an alternative to traditional car loans, you may be eligible for a home equity loan or line of credit with lower rates. These can be attractive options as the interest may be tax-deductible.
WHEN TO SHOP FOR A CAR
Buying a vehicle is all about supply and demand. If you want a convertible, don’t shop for one when it’s balmy outside. If your taste runs to an all-weather 4-wheel drive sport utility vehicle, don’t shop when snowplows are working overtime.
Let’s look at your best opportunities seasonally, during the month and during the week.
Seasonally. Experts say the best times of the year to buy a car are during the last two weeks of December, and to a lesser extent, between July to October.
Car lots are often nearly deserted during the winter holiday season, which motivates dealers to cut costs. At year-end, they’re trying to break sales records.
July through October, dealers clear lots to make way for the next year’s models, which means they will be ready to make a deal and may be willing to give up all or part of any incentives to make a sale.
Best Time of the Month. Most dealerships chart sales on a monthly basis, and sales managers like to build campaigns around monthly sales quotas. Bonuses are set up to reward salespeople who meet or exceed quotas, so shop at the end of the month and hope for a hungry salesperson.
Best Time of the Week. Dealerships do the most business on weekends. This can work to your advantage in two ways.
Arrive at the dealership early Saturday, because there might be a bonus for the salesperson who sells the first car of the weekend. Come back Sunday afternoon, when the sales manager might be eager to make a weekend quota.
Take your time. The salesperson will want to close the deal and move on to the next prospective buyer, but make a counter-offer. Once you have the lowest figure, ask for it in writing and say you need a couple of days to think it over. This might prompt the salesperson to go even lower on the price to make a faster sale.
NEW OR USED?
A car drops an average of 20 percent in value when you drive off the lot, and insurance costs are lower for older vehicles. Therefore, buying a used car can be financially smart.
But, why buy someone else’s problems? A car could look good but be a rental that was never maintained. In that case, you’d be happier with a new car.
Buy a new car if:
• The car you want is within your budget.
• You need the peace of mind of a new-car warranty.
• Customizing is a must for you.
• You plan to keep your car on the road 10 years.
Buy a used car if:
• You have a tight budget but want a luxury car or one loaded
with options.
• You don’t care what options are, or aren’t, included.
• You’ve used the vehicle ID number (VIN) to check the car’s
history (AAA offers discounted CARFAX reports), opted for a manufacturer’s certified pre-owned vehicle, purchased a warranty and/or you had the vehicle inspected by a AAA Approved Repair Provider.
For the best used car deals, consider:
• A car from the model year preceding a total redesign.
• Late-model off-lease vehicles.
• Certified pre-owned vehicles with manufacturer’s warranties.
• Program cars (fleet vehicles, company cars, demonstrators).
• Late-model, low-mileage cars.
Watch out for:
• Rental cars with no maintenance records.
• Discontinued models no longer supported by manufacturers,
such as Peugeots, Pontiac or Saturn.
• Vehicles with questionable information on the history report. • Vehicles that have serious mechanical problems.
EXPLORE | CARS & DRIVING SUMMER 2021
AAA Auto Buying Program
AAA Auto Buying is a comprehensive auto resource that can help make your car-buying experience a success. For more details, go to AAA.com/AutoBuying.
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