There’s nothing more exciting than buying a new car. However, it comes with a lot of guesswork, questions, and paperwork. Surveys say that buying a new car is even more stressful than getting married!
Fortunately, it doesn’t have to be that way if you are confident in your purchase. Let’s talk about the best way to buy a new car in 2023!
Is a New Car Right For Me?
Choosing between a new car and a used car is a tough decision, especially with prices as high as they are. If you are willing to sacrifice a little quality, a used car can potentially save you thousands of dollars. It doesn’t even necessarily have to be much worse, as the bulk of depreciation is eaten up in the first couple of years.
Conversely, a new car is more expensive but much safer. Not only a safer choice but also physically safer. Newer cars have better safety and user features, making for a more comfortable ride on average.
However, this does come at a price. If you’re willing to sacrifice up to 30% depreciation in the first year or two of ownership, then a new car is a safe choice. It will have steady, predictable expenses, and it’s far less likely to break down in the first few years of ownership!
If you have a family or you live (or routinely drive) in a rural area, then a newer car may be the way to go. However, if you need a commuter car in your city, then it’s really up to your discretion and preferences! Still, a new car is a safer option overall, even if it costs more upfront.
The Best Way to Buy a New Car
If you’ve decided that a new car is right for you, then congratulations! You’ll get the most state-of-the-art technology and safety features, and you won’t have to worry about major car repairs for a while.
Still, there’s an important process to follow to find the best car for your needs and avoid wasting your money. Here’s how to buy a car!
Identify Your “Must-Have”s
If there are certain features you can’t live without, identify them to help narrow your search. Most dealership websites will allow you to use these features as filters, which will make it a lot easier to find what you’re looking for. Here are some common examples of must-have features:
- All-wheel drive
- Ample seating
- Heated seats
- Stop-assist (automatic emergency braking)
- Blindspot detection
- Automatic lights
- Rearview camera
- Sunroof or moonroof
- Upholstery type
- Bluetooth or hands-free technology
- Remote starters
The list goes on. If you have any specific features that are essential for your purchase, determine what they are before beginning your search!
Set Your Budget
How much are you willing to pay for your new vehicle? The average new vehicle in Canada reached $54,000 earlier this year, as record-high prices are driving some buyers out of the market. However, keep in mind that they are averaging Teslas and other luxury vehicles with this list.
You can find new cars in the $30,000 range or less. They may not have everything you’re looking for, but they can save you a lot of money.
Remember, to divide your budget by the term of your auto loan in months. If you plan on taking out a 5-year loan, then divide your total by 60 to get an idea of your monthly payments. Don’t forget to factor in interest rates and dealership fees!
Even if you don’t have money to put down, you may still be able to finance a vehicle. Just determine what your monthly budget is and crunch the numbers, including insurance quotes and estimated fuel costs. Remember that the cost of the vehicle is only one factor in auto expenses!
If you want to know more, you can use tools like KBB’s 5-year cost-to-own tool. This will give you an idea of how much you can expect to spend in your first five years of ownership.
Find the Right Dealership
Not all dealerships are created equally. It’s well worth your time to search for a reputable dealership that sells the type of car you’re looking for.
If you don’t know of a reputable dealership, ask your friends and family for recommendations. Otherwise, online reviews are a great place to start. Remember to read through these thoroughly, as some reviews may not apply to your interests.
You may also want a manufacturer-specific dealership. For example, if you have a strong preference for Toyota, then you may want to shop at your local Toyota dealership.
Regardless, once you’ve found a reputable dealership, take a look at their available cars and see if there are any that meet your needs. If so, give the dealership a call or head over to check them out during business hours.
Test-Drive the Vehicle
For a newer vehicle, you shouldn’t have to worry about major issues like rust or a damaged engine. However, it’s still important to test-drive the vehicle for comfort and to ensure everything is working properly.
Test the windows and electronics, see what features the vehicle offers, and take it for a drive. Pay attention to how the car handles on the roads, corners, and more. Make sure you are comfortable driving this vehicle, as you’ll commit to it upon purchase for several years.
Ask yourself the important questions, including:
- Does it have all of the features you need?
- Are the seats comfortable upon adjustment?
- Do you notice any potential safety concerns?
- Does everything work as designed?
- How do the speakers sound?
The list goes on. Whatever your needs and preferences are, this is your best chance to see if the vehicle lives up to your expectations.
It’s very exciting to buy a new car. Unfortunately, excitement is a powerful emotion that can cloud our judgment. Just because a car seems great on paper and drives well doesn’t mean it’s the right one.
Fortunately, new cars don’t need pre-purchase inspections, which will save you a little on upfront costs. However, they still require some diligence.
Once you’ve found a car or two that seems to suit your needs, do a little research. Not just on the costs, but on drivers’ experiences overall with the vehicle. All of the information you need on safety, handling, and performance is just a Google search away, so it’s worth a look!
If you feel you are prone to making impulsive decisions, it’s okay to sleep on it. Give yourself a couple of days to get over the initial excitement before making a final decision, and you may wind up with a better car than you were expecting! You can still shop for loans in the meantime and find one that works for you before jumping in.
Shop For Insurance
Switching cars is a great time to consider looking for a new insurance policy if you aren’t happy with your current provider. Once you have an idea of the car you want, talk to your insurance provider and ask for a quote on your rates. From there, compare it with other insurance providers that operate in your area to find the best deals.
Quotes are free, but you should expect to hear from them again after getting your quotes! Make sure you befriend your “unsubscribe” button in your email app!
Remember that insuring a new car is going to be more expensive. That doesn’t have to be a problem, as long as you shop around for the best deals.
Find the Right Loans
Very few of us have the cash on hand to buy a new vehicle, especially with car prices at an all-time high. With interest rates hitting records as well, it’s essential to shop around for a high-quality loan.
For that reason, don’t just go with the loans that the dealership offers. Always read the fine print and compare your loans. You can even apply online to get this process done, so you can just walk back into the dealership whenever you’re ready to buy!
Start Shopping Today
Now that you know the best way to buy a new car, take these steps one at a time for the best results. Buying a new car is a major financial decision, so don’t take it lightly. Take your time, determine your needs, and shop around until you find the right deals!
Stay up to date with our latest financial tips, and apply for a loan today to help get the car of your dreams!