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Step 4: How Much Can You Afford?
This is the first and most important step. You must know how much you can spend before you can determine what you can afford. Affordability is a multi-faceted issue because the car buying process can consist of more than one transaction. The key to simplifying the purchase process is to negotiate each step separately:
Dealing With Your Current Car: Trading-in your current car to a dealer or selling it to a private party
Obtaining a price of your new vehicle
The new car buying process is greatly simplified when you discover the bottom line vehicle price you can afford ahead of time. Here's an example of the kind of details you'll need to know:
1. "The trade-in value of the vehicle I currently own is Rs. 250000"
2. "I owe Rs. 50000 on it"
3. "I've got Rs. 00000 in savings I want to put down"
4. "I want to pay under 6000 Rs per month for 60 months on a new car"
This means the same as:
"I can afford to buy a Rs. 500000 vehicle."
If your current car is in extremely good condition and you have impeccable service records, it may be well worth your while to sell it on your own. On the other hand, if your car needs a lot of work, you may end up putting more money into it than you can recover—so take a realistic look before you decide.
Your decision to stick to a budget will help provide peace-of-mind in the car-buying process. With these principles in place, you should have a monthly budget estimate in place. This is very easy to calculate. Add up all of your fixed monthly expenses, such as your rent, phone bill, etc. Subtract that from your net income. Then subtract your estimated extraneous expenses, such as food, fuel, and entertainment, whatever. The result should be an amount of money you have to play with.
From that, you need to remember that buying a car involves more than a down payment and monthly payments. In your budget you will need to include licensing, registration and other hidden costs, as well as insurance costs, fuel and maintenance.
Once you have all of this worked out, you should have a ballpark figure of the budgeted amount you can use for car payments. A good rule of thumb is roughly 20 to 25 percent of your net income can be used for a car payment. Once you determine that figure, stay with it.
Step 5: Do Your Research Online
Think about different factors, such as:
How many passengers will be riding in the car with you?
How much driving will you be doing?
What kind of driving will you be doing?
How important is fuel mileage to you?
Research
When trying to decide what car best suits your needs, fanatical research is going to pay off. Next, start your search online. With the incredible amount of data available, what specifically should you research? Of course other important facts to discover include information about safety, quality, and 5-year cost of ownership. These ratings can help you achieve some needed peace-of-mind.
Safety
There are also safety features you may want to consider. Even though most of today's cars come standard with airbags, there are other safety features to consider. There are two general types of safety features: features that protect the occupants and features that assist in collision avoidance.
• Occupant Protection - Occupant protection features are designed to protect the driver and passengers in the event of a collision. Such features include variations in size, shape, frame design and interior devices. A common misconception is that bigger vehicles are safer. This isn't always the case. While generally this may be true, some of the larger vehicles--including some newer SUVs-have a tendency to roll when making sharp turns. This heightened rollover propensity decreases the overall safety of a vehicle. Also, some of today's SUVs aren't held to as stringent a set of crash test regulations as other passenger cars. However, many of the smaller compacts on the road offer little crash resistance. Check out crash test results on the internet for a more detailed look. Other forms of occupant protection include variations in design. These are designed specifically for a model to either offer more strength or to allow for crumple zones. Crumple zones are strategically designed areas of the body or the frame that buckle under extreme stress, absorbing more of the impact than other parts of the vehicle. More and more vehicles are integrating interior safety features. While the seatbelt has become standard, airbags are becoming more common as well. Other manufacturers are also offering such features as collapsible steering columns to minimize injury risk, side-impact restraints and even extra interior padding.
• Collision Avoidance - Design aspects including the brake system, visibility, and speed and acceleration capabilities influence crash avoidance. Anti-lock brakes are a very beneficial feature to have in avoiding a collision, for they not only allow your car to stop quicker without skidding, but they allow you to maintain the integrity of your steering while braking. This can be highly effective in ensuring your safety while driving, especially in wet or slippery conditions. However, they can also be a hindrance if not used properly.
. Total Cost of Ownership
Total Cost of Ownership values are based upon a 5-year average. The factors you may need to consider is depreciation, financing, insurance, registration fees, repairs, maintenance and other applicable fees to calculate the total cost to own the vehicle over a 5-year period. Ownership costs can differ greatly.
The cost to own and operate two different vehicles with equal purchase prices can differ by thousands. Of course when evaluating ownership cost for used cars and trucks, a vehicle's condition and mileage will greatly impact ownership costs, therefore it's important to compare similar vehicles in similar condition for an accurate picture.
. Expert Opinions
Another way to gain confidence in your purchase is to spend some time reading what the experts have to say about your new vehicle. Reading the opinion of experts before the test drive serves many purposes; you can discover the strengths of the car's performance; see how the vehicle compares in its class; and discover things like how the vehicle does on longer trips and more.
. Owner Opinions
The opinion of owners is also a valuable resource. With this tool you can discover how recent new car owners rate their new cars. A short visit to the owner review section of AutoIndia.com will give you access to a searchable database with personal ratings and comments. After you purchase your car, you can submit a review of your own car to help others make an informed decision.
. Side-By-Side Comparisons
Finally, don't forget to run a side-by-side comparison of the vehicles you are considering and you will get another level of insight you may have otherwise missed. Seeing horsepower, mileage, seating capacity, headroom, legroom and other specs side-by-side helps you quickly identify which vehicles meet your specific needs.
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