New car checklist – When most people shop for a new car, they focus on the price and not on the complete new car checklist. Purchase price is an important factor but there are many other factors to consider insuring the best deal possible. New car dealerships may talk about selling at invoice price to entice the customer to purchase a new vehicle but other factors are involved that can have a dramatic affect on the value. Then there’s the question of which is better, to purchase or lease a new vehicle?
What’s Better to Buy or Lease a New Car?
Determining what’s a better value to buy or lease largely depends on driving habits and personal preference. If the vehicle is driven a minimal amount of miles per year, then a lease may be a better option. Some factors depend on how fast a particular model depreciates in value.
Vehicles that depreciate fast don’t lease as well as vehicles that have a slower rate of depreciation. To find out more information one need to follow new car checklist.
Trade-In Value is a Major Factor When Buying a New Car
When buying a new car many people will trade-in their old car as part of the down payment. If the dealership is selling the car at invoice price, they may try to make up the difference in profits with the trade-in. If for example the dealer offers $1,000 less than the actual trade-in value, they’ve just increased their profits an extra $1,000 when they sell the old car. Before talking to a new car dealer, find out what is the car worth?
When looking up the cars trade in value, look and see what the private party value is. Selling the vehicle to a private party (individual) will bring a higher price then trading in the vehicle. The extra money would make a better down payment and reduce the monthly payments if the car is financed.
Interest Rates and Rebates Important in New Car Checklist
If someone has good credit they can often purchase a new vehicle at 0% interest rate. It may seem a bit ironic when 0% (or very low interest rates) is offered, it’s usually offered with a vehicle that also has a rebate. In most cases it’s an either or proposition because the cost to the factory of the low interest rate is hidden in the selling price. If someone wants to purchase the new car for cash, the factory will sell it minus the rebate.
If someone can’t pay cash for a new car, they may consider alternative financing when a vehicle purchase has a choice between a low interest and a rebate. Shop around with some banks for the lowest interest rate. Once the lowest interest rate is found, determine what the total interest for the life of the loan would amount to. If the total interest were less than the rebate, the best value would be to take the rebate and use alternative financing.
Summary of Tips for Buying a New Car or Truck
- Compare a lease to a purchase
- Find out the value of the trade-in before visiting the dealership
- Consider selling the trade to a private party for a larger down payment
- Look at alternative financing for a better value
Using some of these tips could result in a considerable amount of savings. It’s also good practice to shop other dealers. Besides the purchase price, other dealers may have a different value for the trade-in. Shop at least three dealerships and go with the best overall purchase price, trade-in value and interest rate combined. If shopping for a used car, find out the best websites for used car listings.
Follow Leasing a Car Tips on New Car Checklist
For those who think leasing is a big mystery, Michael Caudill, president of Driven Communications and car correspondent for KTLA’s Morning News, solves this oft pondered buying a car formula.
What’s the difference between buying and leasing a car?
Well, the biggest difference between buying and leasing is quite simple. If you are looking to be in a car long term, say 5-10 years, then buying a car is the right thing for you. If you are only looking to be in a car for the next two to three years, then leasing might be the better answer.
What are some reasons consumers choose to lease rather than buy? Why would a sales person try to lead you into leasing?
Leasing is a good option for the person that likes to drive a new car every few years. Whether for business or for pleasure, leasing allows a customer to buy a little more car for the money as well. From a financial standpoint, leasing is a great option for the small business owner because of the ability to write off a significant percentage of the lease payment.
What do you need to know about a lease contract?
Lease contracts come down to a few very important items that the consumer must pay close attention to. 1) Know the terms of your lease. Is it 24 or 36? 2) How many miles can you drive a year? Mileage, if not monitored could really hurt you in the pocket book if you are not careful because if you go over your mileage, the dealership will charge you additionally by the mile. 3) Warranty and Maintenance. Some dealerships provide lease paying customers with free oil and tire rotation, along with other service benefits.
What are “wear and tear” costs? Why does it matter?
Dealerships are getting better with “wear and tear” costs, but some dealers still charge the customer for new brakes and tires, which are two of the biggest items that fall under the “wear and tear” cost. BMW dealerships have one of the best lease programs from the standpoint of service. Oil, tire rotations, brakes are all covered under the lease contract. These costs DO matter because at the end of your lease…you want to be able to return your car in great shape.
What about lease payments? How does it work, how much will you pay and how much will you owe at the end of your lease?
Lease payments allow you to get more car for less money…right? Well, that is true unless you want to buy it out right at the end. Then you will have to pay a small premium to keep the car. Most dealers will negotiate the lease down payment to a certain point, but once the payment gets too low, they will not be able to budge. Generally, lease payments are pretty fair and for the most part…you will not want the car at the end of the terms because there will likely be a newer model that you’ll be able to lease as well.
When/why should a consumer consider “gap insurance”?
Gap Insurance is one of those options all customers have when buying or leasing a car. It’s not for everyone, but is an additional insurance option that will protect the customer in the event of loss or theft of their vehicle. If you are financing your vehicle for more than 24 months or leasing a car, drive a car that is recognized for being on the top “stolen” cars list, or if you owe more than the vehicle is worth…then you might consider Gap Protection.
Should you buy your leased car at the end of the contract? Or, is it better to just dump it and get a new one? You probably have understood from new car checklist.
It’s better to start new, that is, unless you really love the car. You’ll be able to “get more car” again for the money with a new lease or buying a new car. It doesn’t make financial sense to buy it outright.