Buying a car can be a bit overwhelming. First, you have to think about what you can afford. Then, you have to think about what kind of car you need, its features, gas mileage, and more. On top of all of that, you have to brush up on how to deal with car salesmen.
The most important decision you’ll ultimately make, however, is whether to buy a used or a new car. While both can be good choices and both have their own pros and cons, your budget and some other factors will ultimately determine what you should do.
Can You Put Down 20%?
If we had our choice, we’d probably all go out and buy new cars. However, not everyone can afford a new car.
A good litmus test for whether you can or not is to look at the total price of the vehicle. Are you able to come up with 20% of the vehicle’s total asking price as a downpayment?
If the answer to that question is yes, then you can probably afford to purchase the car. If the answer is no, however, then you’ll probably want to look at cheaper new cars or veer into checking out your used uptions.
How’s Your Credit?
Another thing to think about is what your current credit score is. You can check your credit for free online if you’re not sure. Just go through one of the three major credit bureaus in the US for accurate results.
If it turns out that your credit is poor, then you usually can’t get a new car without paying a large amount of interest. Your best option in this case is to either buy a used vehicle or to take steps to repair your credit before making a purchase.
If your credit is good, however, then you should be able to get both a new car and a low interest rate with no problem!
How Soon Can You Pay it Off?
When you’re looking at new cars, pay attention to how long the loan lasts.
Most car loans are for anywhere from four to six years. The longer your loan is, the more you will pay in interest fees.
If there’s a new car that you want, but you know you will need longer than four to six years- with four being ideal- to pay it off, that’s probably not the car for you.
In this case, you’ll need to find something more affordable and/or used for best results.
Is Your Income Stable?
Think about the job you have now. Are you likely to have this same job in six years, when your loan is paid off? If no, are you likely to have an even better, higher-paying job?
If you can’t answer yes to those questions, then it’s probably not the time to buy a brand new car. New cars take time to pay off and require a very stable, reliable income.
Until you have a job you plan on keeping for the long-haul, you’ll probably want to stick to used vehicles.
New or used is a question every car buyer has to ask themselves. If you follow this advice, however, you can answer the question correctly and in a way that will benefit you long-term.