auto

10 tips every car shopper should follow

I get asked a lot about what's the best way to buy a car. Should buyers get financing in advance? Trade in their current car to the dealer? Lease?

Everybody's situation is different, but there are some basic do's and don'ts to buying a vehicle.

Here's my list of tips that every car shopper should follow:

1. Be certain of what you want

This sounds simplistic, but you'd be surprised at the number of people who start out with only the vaguest idea about what they want or need and wind up with a vehicle that doesn't serve them well or costs more than they can afford.

Look at your lifestyle. Do you need to haul around a lot of kids? Do you have a long commute that will mean high fuel bills? Do you need something that can carry a lot of cargo?

Once you've answered these questions, narrow down your options to the type of vehicle you need.

2. Honestly assess your vehicle budget

If you make $40,000 a year, don't think you can afford a $30,000 car.

Your total car expenses -- payments, insurance, gas and maintenance -- shouldn't rise to more than 20 percent of your take-home pay.

3. Think seriously -- do you really need a new car?

Most new-car purchases are impulse buys -- your current car is 4 or more years old, you're tired of looking at the same dashboard and there's a shiny new model that has caught your eye.

Even if your car needs a few repairs, it is often better to make those fixes and hang onto your current car for another year. A good rule of thumb: If a repair costs less than three months of new car payments, make the fix.

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4. Clean up your old car before selling or trading it

Spend less than $50 for some good car-care products to help clean up the exterior, interior and engine compartment of the vehicle you're ditching. Doing so may add several hundred dollars of value to the car when you sell it.

5. Get your financing upfront

There are several ways to secure a loan commitment for a specific amount before you go shopping. Check out online lenders, credit unions and banks.

There are two benefits to doing this. First, you'll know before you shop how much you'll have to pay each month. Second, once you have a loan for a specific amount, you're less likely to allow the salesperson to talk you into a more expensive vehicle.

6. Don't get fixated on a monthly payment

The worst mistake car buyers can make is to tell salespeople they're prepared to pay "x" amount a month for their car.

With that information, a salesperson can manipulate a deal to make almost any payment possible simply by playing with trade-in numbers, loan percentage points and length of term, and down payment.

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