Buying a Car
Car Loan Finance

How to Make Smart Financial Decisions When Buying a Car

Buying a car is a significant step in everyone’s life. With all the technological advancements that have happened in recent times, the number of choices available for buyers has never been higher. All the brands are putting forward their best products to attract new buyers every day. Buying a car has never been easier as the borrowing process now has become very simple and seamless. Even though there are a number of great financial options to consider, purchasing a car still remains a crucial financial decision.

Here are some of the things to keep in mind before you buying a car:

Buying a Car
Buying a Car
  • Ensure that you can afford the vehicle – The important thing to keep in mind is to evaluate your financial capabilities before purchasing the vehicle. With so many great financial options available to help you, this crucial factor might sometimes be forgotten. This is not just restricted to the purchase cost of the car. There is an amount of expense involved even after purchasing the vehicle. Maintaining the vehicle and ensuring that it stays in the best possible condition comes at a cost. It is important to consider all these added costs along with the actual cost of the vehicle before making a choice.
  • Avoid purchasing cars at the end of the year – Car manufacturers generally tend to offer hefty discounts at the end of the year in the month of December. This is generally done to finish the existing inventory before the start of the new year. January is generally the time of the year companies launch new models and hike prices. If you buy the car in December, the registration date of the vehicle will be within the month of December. This will mean that the car will become last year’s model in just one month. This is generally not a major factor if you are planning to keep the car for at least 8 or 9 years. However, if you are planning to sell your car in 3 or 4 years after the purchase, the registration date will play an important role while evaluating the resale price. It is best to wait and buy the car at the start of the year so that the resale value of the car is not affected.
  • Weigh your options before choosing the car – When the car dealers are offering a deal with a lot of freebies, ensure that you evaluate the offer closely. Value of the freebies is generally inflated a bit to make the deal seem much more attractive. Always look to opt for a cash discount rather than settling for free accessories. Try to avoid the exchange offers offered by the dealer. Car dealers generally tend to quote a price that is much lower than what you will get if you sell your car elsewhere. Doing a little research beforehand to know the right price of your vehicle is important before going ahead and selling your old car.
  • Avoid buying insurance through the dealer – It is mandatory to have an insurance policy for your vehicle. Car dealers generally offer the option of buying the insurance when you buy the vehicle. It is best to go to the insurance company directly instead of buying the insurance from the dealer. This is because you can save close to 40% if you choose to buy directly from the insurance company.
  • Ensure that you transfer the no-claim bonus – If you already own a car, you already know that you get a discount on your premium if you do not make a claim in a year. However, not many know that this no-claim bonus can be transferred from one vehicle to another. This will help in bringing down the cost of your insurance even if you buy a brand new vehicle.

Keeping these points in mind before going ahead and purchasing a car, also you can check BankBazaar to help you financial aid, such as car loans so you save a considerable amount of money.

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