Saying “Goodbye!” to 2017 can be a great time for you to get some hot new wheels, so as the year comes to a close these tips for buying a car (either new or used) can come in really handy.
Because car dealers are eager to get rid of inventory this time of year, they often offer year-end sales and incentives. But these promotions don’t always guarantee a great deal — or a car that you can actually afford. Before you sign on the dotted line, take a moment to empower yourself with these year-end tips for buying a car so that you can afford a new ride that fits both your budget and lifestyle!
1. Observe the 15% rule. Keep your total car expenses, including payment, gas, insurance, at no more than 15% of your total take-home income. If you can find a car you love under that amount, even better! Just avoid going over 15% or other important budget line items, or else those new wheels might come at a higher cost: the expense of your short-term and long-term financial goals. Plus, this rule helps narrow your choices so you know what’s in your personal lifestyle range.
2. Do your homework. Even the best timing in the world is no match for preparing and doing research in advance.Once you’ve got your price point, start researching vehicle reviews and maintenance ratings to find the makes and models that meet your needs.One great place to look is The Insurance Institute for Highway Safety — which has many lists of the safest vehicles. Remember: don’t just research the price of your dream car, make sure to factor in the estimated value of your existing vehicle so you know what it’s worth as a trade-in and can negotiate accordingly.
3. Consider a used car. In most cases, a car is a depreciating asset (they lose value over time), and they start depreciating the second they’re driven off the lot. A certified pre-owned or other used car can be a bargain, if it’s in good shape. We’ve learned that the sweet spot tends to be a car that’s a couple of years old. With this strategy, you can get a car that’s nearly identical to the current model year’s, but at a price that’s way more palatable, since most of the depreciation is factored in. If you’re buying used, be sure to always have a licensed mechanic inspect it, and think about guarding against unexpected repair bills with an extended vehicle protection plan.
4. Shop online. Online shopping isn’t just for clothes and shoes. Online car buying services can give members exclusive discounts and upfront pricing below MSRP. You can even get preapproved for loans at better interest rates than the dealership might offer – and that also goes for extended warranties, too. That said, not all car buying services are created equal. They can vary greatly in not only the deals they are able to cut with dealers but also in the experience, transparency, and control for the buyer.
Our advice? Spend the end of the year celebrating the holidays with friends and family by outsourcing the hard work to us with the USAA Car Buying Service. (The USAA Car Buying Service has saved members an average of $3,335 off MSRP. That’s big savings, no matter the size of your vehicle!)
USAA Car Buying Service provided by TrueCar, Inc. USAA Bank receives marketing fees in connection with the Car Buying Service.
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