Buying a car in 2012

Before you decide to purchase a car, regardless of what kind, size or price range you have in mind, it’s useful to plan ahead before you actually begin the process.

Know how much money you can afford to spend on it. You’ll need to make a down payment and then make monthly payments to keep it. You also need to factor in maintenance, fuel and car insurance for young drivers if you’re under the golden driving age of 25. All of these factors contribute to the cost of ownership.

Do research to determine which type of vehicle suits your needs the most. If you have a large family it’s likely that a coupe is not going to work, whereas something like an SUV is impractical if you have fuel efficiency as a goal when buying your new vehicle.

Get the full history of any car that you intend to buy. While a new car doesn’t have any history, a used car may have been in an accident and the only way to know for sure is to run a report with the VIN number. You can also determine if there are any known problems that the manufacturer has offered to repair.

Find financing before you go to the dealership if possible. While the in house financing they provide is convenient, it also may not offer you the best deal and you could save yourself a few points in interest by coming in with your own loan terms. It also makes the process of actually buying the car much faster and takes some stress off you so you can focus on finding the perfect vehicle.

Carefully weigh the savings that you’ll get with the low-interest loans versus the cash-back rebate you can get with some newer vehicles. Compare the two amounts to determine which the best deal is and go with it to maximize your savings. Look at all possible incentives, discounts and rebates before you visit the dealership so you don’t miss out when making the purchase.

Don’t accept the invoice price. Look up the price of the vehicle on a third-party site and negotiate with the dealer to get a better deal. Also look at how much your trade-in is actually worth before going in so you don’t lose out on hundreds or thousands by receiving a much lower price than its true value.

Always test drive the vehicle to ensure you’re comfortable in it and take all the time you need to make a decision you are really comfortable with.