The Seventh Annual Rules of the Road Survey from Capital One Auto Finance has just been released. It states that first-time car buyers do a pretty good job of researching the make, model, and price of the car they want to get. However, they do a less than a stellar job on other costs associated with owning a car.
The survey said that almost half of first-time car buyers did not figure in the cost of maintenance, repairs, registration, or parking. It went onto say that over half of first-time car buyers surveyed did not know that they could go online to compare financing options or apply for a new vehicle loan online.
Tips for First-Time Car Buyers
The following tips have been developed by Capital One to help first-time car buyers manage the car-buying process:
- Learn about vehicle pricing. Research new and used car prices, including dealer invoice pricing and transaction costs. Know what you can afford.
- Research and compare different financing options. There is a range of auto financing options available, including dealer financing, loans from banks and credit unions, and pre-approved no-obligation online loans.
- Find the lowest rate that you qualify for. This can save you a substantial amount of money over the life of your loan. It’s also critical that first-time buyers match the length of their loan to the planned length of ownership so they don’t become “upside down,” or owe more than what the car is worth.
- Treat the car-buying process as two separate negotiations. The “vehicle price” and “financing costs” are two separate transactions, and should be negotiated separately. If you have a trade-in, consider it another separate part of negotiations.
- Check your credit rating. It’s important to understand your credit situation before determining if you can finance a car, which lender to use, and when you should begin the process of obtaining your auto loan.
- Make sure you are comfortable with the contract. If it’s not the price or deal you want, ask a friend or family member to help, and be ready to walk away.
Sanjiv Yajnik, President of Capital One Auto Finance, confirmed that even in this economic downturn it’s a great time to buy: “Armed with the right information, it is an excellent time to get a great deal, but it is important for first-time car buyers to take the time to think through additional auto expenses beyond the sticker price, understand exactly what a car loan is, and calculate what they can afford…”
Stay tuned to BestCarBuyingAdvice.com for more tips on how to buy your next new or pre-owned vehicle.