When you shop for a new car at the dealership, you should not just be looking to fulfill your immediate need for transportation. You should also be looking to fortify your finances for the future.
Your car buying decision will have a significant impact on your budget even after you finish making car payments. It's a good idea to look at your vehicle purchase as an investment so that you avoid excessive expenditures and missed opportunities.
The following are four financial mistakes to look out for and avoid when you're in the process of purchasing your next vehicle:
Not researching all available models
You might have a particular vehicle make that you prefer, but many drivers neglect to explore all of the different models that are offered by their favorite vehicle manufacturers. Many drivers get into the habit of buying the same model year after year, even though their favorite make is now offering many more model options than they did in the past.
Before you arrive at the dealership, check out all of the model options that fit the description of your ideal vehicle in terms of size and performance. You might find that there's a better or more affordable vehicle for you among your favorite manufacturer's model options that you were previously unaware of.
Focusing too much on your monthly payment
Your monthly payment is really not the sole determining factor when you're evaluating a loan offer.
While your monthly payment is important in determining the affordability of the loan, it doesn't give you a clear view on the overall costs of financing. Make sure you're looking at not only your monthly payment, but also the amount of interest you'll be paying for any different financing offers you come across.
Not looking outside the dealership for financing options
Many car buyers get talked into going with dealer financing when they have not yet looked into financing options at their primary financial institution. It's probably a good idea to see what kind of loan your bank can float you if you've been a loyal and long term client of your current bank.
Neglecting to explore insurance costs
Many of those who purchase a vehicle purchase insurance as a kind of an afterthought. However, you should probably take insurance costs into consideration before you close for a particular vehicle.
Certain vehicle makes and models are more expensive to insure than others. Remember that even a minor factor such as vehicle color or detailing can impact your insurance costs.
Make sure that you contact your auto insurance provider and get some quotes before you make a final decision on your vehicle purchase. Then be sure to take to a car or Toyota dealer in your area to find deals and options.