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Jan 202013
 January 20, 2013  Posted by  Cars, Shopping

It’s not easy being a first-time car buyer. You have to balance the dream of a shiny red roadster against the reality of monthly payments.

Whether you are a recent grad with your first real job or someone moving from downtown to where there’s no convenient subway, drive smarter with these tips to save time, money, and just as importantly, stress.

Know what you can afford each month. Unless you are paying the full amount in cash (don’t we wish!), you’ll have monthly finance charges.  Determine what can afford per month and then look for a vehicle and payment schedule to fit. That will be easier on your budget than deciding on a car and then having to cut back on other expenses, including maintenance for vehicles without a warranty.  And don’t forget to calculate in the cost of gas.

Understand the finance charges. According to the experts at KBB, you should figure $25 a month for every $1,000 you borrow for 48 months and $20 a month with 60-month financing. With that as a guideline, every $10,000 borrowed is $250 a month for four years, and $200 a month for five, so a bigger cash down payment means less financing. Again, this is the base obligation. Insurance, fuel and periodic maintenance are additional.

 Establish your transportation needs and wants. A Fiat Cabriolet may be the car of the moment, but will it work for you as for daily transportation? Conversely, you may think you need a seven-passenger SUV, but unless you are also transporting the kid’s soccer team or Grammie and Gramps on a regular basis, it might be less expensive to rent a van. Options like a moon roof, sexy rear spoiler and a high end audio system can add $40 a month, so do you really must have them?

Do your research. Check out websites with new car reviews and ratings, along with cost of ownership and residual value, also called retained value, which is a vehicle’s projected resale price. rates vehicles for best retained value. Once you’ve digested those, balance it with your gut instincts — or those instincts of someone whose gut you trust. Be proactive; if you see someone in a parking area with a car you have an interest in, ask him about the ownership experience.

Locate a convenient dealer.  Compare dealer locations and showroom environments. Stay away from dealerships where most of the sales staff is sitting or standing at the front entrance.  Check the service bays. Clean and tidy is a good indication of quality work.  Also make note whether it is busy, since an empty service area could indicate a lack of satisfied customers.

 Take a test drive. You’ll be spending as long as five years with this car, so few things are as important as how you feel behind the wheel, including seat height, steering wheel adjustment and feel, visibility through the rear window, even the layout of the dashboard control.

Everybody who will be driving this vehicle regularly should take a test drive. Recently, I tested a Mercedes-Benz C250 sports coupe with my son. I loved everything about it, including its fuel efficiency. He didn’t like it, because his 6-foot frame bumped into the sloped roof when driving, while 5-foot me didn’t. I’ve rejected cars because the seat belt cuts me across the neck of my 5-foot-nothing frame, and that’s not something I could live with for 24, 36 or 60 months.

The test drive should include your own driveway, garage or both, to be sure you can get in and out easily, and a route that includes freeway merging and freeway speeds. If your sales rep doesn’t have the 30 minutes, either find a time when he or she does, or find another dealership.

Determine the proper purchase price. Once you’ve decided what you like, after you established what you can afford, it’s time to negotiate a purchase price. has its Fair Purchase Price, which gives you an accurate idea of what others near you have paid for the same or similar car.  A credit union can provide perspective, and may have a preferred dealer or specific sales person. Get the referral before taking another salesman’s time for a walk around and demo. Most sales people work on commission, and commissions are notoriously small.

Negotiate. You’ll probably be asked what you want to pay.  Never reveal the “per month” number you set for yourself at the beginning of this article. That’s the oldest car salesman trick in the book. If you’re thinking you can budget $20,000 — and you’re looking at a $25,000 car — tell them $20,000. You can always work up, but it’s almost impossible to back up.

Secure financing, or know your options. Talk with your bank or credit union about financing before talking to the dealer, because it’s nice to have options. The car dealer is not the only game in town. Go with whichever one gives you the best deal.

Now it’s time to enjoy your new car.  You earned it.  Just remember to drive smarter and use less gas.

Evelyn Kanter

Evelyn Kanter is an award-winning journalist who has been reporting on good deals and warning about bad ones, for longer than she cares to admit publicly. A native and lifelong New Yorker, she was the first consumer reporter for CBS News and for WABC TV “Eyewitness News” and helped launch the “Sales and Bargains” column in New York Magazine. Evelyn is the author or editor of more than a dozen travel guidebooks and apps, including Peaceful Places New York City, and owns and operates NYC On The Cheap and EcoXplorer. A long-time tree-hugger, Evelyn also writes about green travel, green cars and saving the green in your wallet for national and regional publications, including a column syndicated by Motor Matters and for, AAA magazines and airline inflights.

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