Hey guys! So I’m coming at you with another one, As Told By Mick B.. I have probably made more that 100 mistakes as a grown up, probably more than that. So I am 27 years old and I have owned 4 cars since I was 18 years old. I have probably given away wayyyyyy to much money between those four cars. So as “young person” I would say I’ve got a lot of experience buying cars!

Below you will find a list of 7 things you should do/consider before purchasing your vehicle:

1. KNOW YOUR CREDIT SCORE!

Knowing your credit score before hand, keeps you knowledgeable and able to really sound like you’ve done your research before you walk into a car dealership. The most important part of how much you will pay for the loan you take out to finance the car. Your interest rate could be the difference between making 60 payments of $350 for a $25,000 car and making 60 payments of $600 dollars for a $25,000 car.

Pulling your own credit does not negatively affect your credit!!! When you are shopping around for cars you could go to 3-5 dealerships and all of them would try to recommend that you let them run your credit, DO NOT LET THE DEALERSHIP RUN YOUR CREDIT! If you refer to my previous article on UNDERSTANDING CREDIT SCORES you will see that a portion of your score is determined by the “Number of Recent Inquiries,” which is how many times someone, other than yourself, has checked your credit score.

Depending upon your credit score, you may be better off waiting, perhaps hiring a credit repair service and/ or paying down current debts to help raise your credit score.

2. KNOW WHAT TYPE OF CAR YOU WANT!

Knowing if you want a 2 door or 4-door, a pick up truck or a sports utility vehicle is very important. Think about what you do for a living, how large your family is, or if you plan to expand your family in the next 3-5 years. Further, if you live 30 minutes away from your work place, you might want to consider getting a car with good gas mileage instead of a sports car.

3. INSURANCE

Before you fully commit to purchasing a vehicle, an additional expense that many people forget about is insurance. Now, I know in Saint Louis we have the “Dirty Drive at Five” where people call into the radio station and let other listeners know where they are riding without any insurance or valid license plates, but lets face it, THAT’S NOT COOL! Many people don’t have insurance because they can’t afford it. Honestly, I am of the mindset that if you can’t afford car insurance, YOU CANT AFFORD A CAR! Let’s at least attempt to be responsible. My rule of thumb? Have insurance before you drive off of the lot. I would advise contacting an insurance broker, who can give you quotes for multiple insurance companies orrrrrr calling your current insurance company and ask them for quotes on 2-3 cars you are thinking about getting

4. TAXES

In Missouri in order to get license plates, you have to pay sales tax and property tax on your vehicle. For a car that costs $25,000, you can expect to spend $2,500 to properly register your vehicle, make sure that you have that money set aside. Did I mention that the taxes on your car must be paid within 30 days of purchase or you face late payment penalties and traffic tickets?

5. TRADE- IN VALUE

My favorite tool? KBB.com (Kelly Blue Book) they give you fair price for your current car including how much is a good price for a trade in or a private sale. Further, you can even see how much you should pay for your new car! It’s an excellent tool to use. Be sure to head over and check out their website. Another freebie, Kelly Blue Book will also tell you a fair price for the car you are considering to purchase regardless of if it is a new or used vehicle.

6. GET PRE –APPROVED!

Unless you are getting a brand new car, you probably will not get the best interest rate at the dealer lot. New cars typically have 0% financing for 60-72 % for borrows with excellent credit (typically above 740). Otherwise you are looking at interest rates of 2.5%- 30%. My recommendation if your credit is jacked up (for lack of better words) save up and pay cash for a car, but if you are in dire need of a new vehicle, I would recommend checking with your local credit unions or the bank that you have a personal account with. It is very difficult for a sales person to let someone walk out of the door that is holding a check for $25,000, its just not normal, lol.

7. OWNERSHIP COSTS

The ownership costs over 5 years vary greatly for a Nissan Altima and a Mercedes- Benz vehicle. Be sure to check the prices of these out! Whereas an oil change for an Altima could cost as little as $25, you’re probably looking at about $100 per oil change on a Mercedes Benz.

These costs can be found by simply Googling “Cost of ownership for a 2XXX XYZ.”

FINAL TIPS

Do your research, how much is the dealer down the street willing to give you the car for? How much is the other dealer willing to give you for your trade in? Pin them against each other! I have been “man-handled” by a few salesmen in my lifetime. But I’ve learned if they can’t give you the deal you want, then walk out of the door. There are hundreds of dealerships out there. No need to settle if you don’t have to. Sometimes they will call you back saying “just kidding” sometimes they won’t. Either way, there are plenty of other options.

Have you graduated in the last year? Ask for special financing or special discounts! When I purchased my first NEW car, I got 0% financing, even though my credit score was only about a 620. Typically those finance deals are reserved for customers with credit scores above 700.

The bigger your down payment, the lower your monthly payment! Also, I learned that when you don’t pay a down payment, or stretch your loan too far out, you run the risk of being upside down on your car. I’ve had a car that was over $8000 upside down after only being 2 years old. It was a real bummer. 😦

Can’t take out a loan from a bank for a decent rate? Ask your parents or balling family members to loan you the funds. (though this has never worked for me, my family is poor).

Know how much you can afford, include your car payment, insurance, gas, and an emergency stash for whatever your insurance deductible is, just in case! One mistake I made was purchasing a car and not adding those expenses in my budget beforehand. It took me a really long time to be able to afford my car and an apartment on my own. If I could do it all over again, I definitely would have chosen an older car and my own apartment.

Are there any other tips that you can think of for purchasing a car? What are some of your car buying horror stories? Comment below!