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So you’ve
landed a good job.
If you’re like most of us, one of the
first things you’ve probably started
thinking about is buying a car.
But first of
all we have to say it: Buying a new car when
you are new to the workforce is usually a very
bad idea.
You will be considered a bad insurance
risk, and to some lenders, a questionable
credit risk.
And when you total your payments,
insurance, registration, maintenance, and gas
you’ll be surprised at the total.
So think
seriously about taking the bus, riding your
bike, sharing the family car, or keeping your
old beater.
But, if you must have a new car…Go
ahead and start looking but don’t look at
brand new cars. A car that is a few years old
will still have plenty of life in it, and will
be much more affordable.
Here are a
few tips to keep in mind:
1.
Don’t trade your old car, sell it.
You will almost always get a better price for
and will avoid confusing dealer tricks
like offering a low price on your new car, but
compensating by giving you a poor trade price.
2.
Arrange financing before you go to a
dealer.
If nothing
else, it will give you better negotiating
leverage when you are sitting in the financial
office at the dealership. Beyond that, you
will often get a better rate at your
credit union or lending institution, and you
won’t fell trapped into taking whatever the
dealership offers.
3.
Talk to your insurance agent.
Before you buy, call your insurance agent.
Depending
what kind of car you are looking at-and on how
much of a risk you are viewed as-your premiums
may be much larger than you think. Or worse,
you may not be able to get insurance at all.
4.
Have a real down payment.
It’s a good idea to have a cash down payment
of
at
least 20%-otherwise you will find yourself
“upside down” on your loan from day one.
And don’t be fooled by rebates.
Rebates are the manufacturer’s way of
cutting the price without cutting the sticker.
On the pitiless open market, your vehicle will
likely be worth what you paid for it.
5.
Say no to the finance guy.
It’s his job to sell you extras-and this is
where
many
dealerships make a lot of money. So… no Scotch guard,
no undercoating, no credit life insurance (if
you don’t have a spouse or kids to protect),
no extended warranty, no window etching, no
dealer added alarm…
……Also,
new or used, always remember: The car you are
about to buy is not one-of-a-kind.
Never
let yourself be pressured into making a
vehicle purchase.
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