If you’re reading this, you’re probably shopping for a car right now.
Your first question should be, “What kind of car do I want?” The very next question you’ll be thinking is, “What kind of car can I actually afford?” Before you visit a dealership, let’s narrow down your choices and help you really understand what you need and want.
We've compiled a list of pros and cons so you can weigh your options and optimize your car-buying experience.
You can't beat being the first to drive a brand new car, truck, or SUV. As well as having that "new car smell," new vehicles also have the newest technology and minimal to no miles on them! Plus, did you know that you can actually save money on financing a new car? A new car usually has lower interest rates because lenders know the value and are confident the borrower will repay the loan. In addition to a low interest rate, some manufacturers also offer a cash rebate or even 0% interest for a certain period of time, saving you even more money.
While financing a new car can save you money on interest, auto insurance and sales tax will still be costly. Generally, sales tax is not included in the advertised pricing, so you may be surprised to see how much it adds to your final cost. You can find your state's sales tax rate on the Department of Revenue website. The other pricey component to a new car is auto insurance. Most lenders will require collision, comprehensive, and gap insurance for a new vehicle. These insurance packages can add up quickly and make your new car more expensive than you initially thought it would be.
Cheaper to finance (low interest rate)
Little to no miles
Find the exact model and trim you’re looking for
Finance and special offers through manufacturer
No waiting for the title
Faster depreciation rate
Expensive sales tax and auto insurance
The process of car shopping can be both wonderful and frustrating at the same time. There are so many choices to pick from, it’s hard to decide where to start. If a new vehicle doesn’t sound like the right option for you, stay tuned for next week’s blog about the pros and cons of buying used vehicles.
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