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Before Buying Your First Vehicle: 7 Things to Check

If you’re like the other 46 percent of vehicle shoppers, you’re using multiple devices to find out more about your prospects. With 204 million vehicles on the market, you’re going to have to narrow down your options. Here are seven things you can do to make shopping for a vehicle much more manageable in 2021.

1. Do Your Research

We saw a decline in vehicle sales in 2020, but vehicle buyers use a much larger portion of their online time shopping (59% more) than they did ten years ago. The average vehicle costs more than $9k, and vehicle buyers spend almost twice as much online shopping every year. To scrape in some of that profit, manufacturers target users through social networks and other popular sites.

Between the 4,000 to 10,000 ads we see every day, we’re bound to come across a few of the best-selling new vehicles. However, if you’re planning to buy a new vehicle, it’s best to bypass the influence of ads. The internet can give you a more independent vehicle shopping experience.

2. Know Your Ideal Vehicle’s Worth

The second action step towards owning any vehicle is to know how much your used vehicle is worth. This step is significant to get into the vehicle buying process. You can obtain this info from various sources. These pricing guides are some of the largest vehicle databases, covering everything from minivan retail values to motorcycle insurance, no matter if you’re planning to buy a car or a motorcycle. They will help you determine how much your ideal vehicle should be worth, so you’ll be able to compare similar vehicles from different manufacturers.

3. Calculate Your Down Payment

Many experts advise vehicle buyers to put down a fair amount of cash when purchasing a new vehicle. However, experts often fail to mention the number of finance charges, registration fees, and interest rates that a buyer will have to pay over the life of a loan. Traditionally experts always recommend that you put at least 20% down when you purchase a new vehicle.

4. Maintain Your Budget

A shocking report has revealed facts about the number of consumers in severe financial turmoil due to rolled over vehicle loans. In 2020, 33 per cent of all vehicle buyers nationwide had more than $5,000 worth of loan debt to their name. Furthermore, many consumers with multiple vehicle loans were spending more than seven per cent of their income on payments. That is a lot of money to be paying to keep your vehicle on the road. For this reason, the average loan term increased to nearly six years, which is an indication that the consumer has overextended funds.

Business Insider found that in this case, consumers with poor credit histories or no history at all experienced high-interest rate charges and deductibles. The consumer is now paying more than the average vehicle payment of $568 per month. To avoid ending up in debt, stay within a strict budget. Spending on a new vehicle loan should remain under 10% of your take-home pay.

5. Check Your Credit Score

Your credit score will dictate the interest rate you get, as well as whether or not you qualify for a particular vehicle loan. On average, only 30% of vehicle loans go to credit scores below 600. A higher credit score means lower interest rates. For example, buyers with a 660 credit score should get a new vehicle loan at a reasonable interest rate. If your credit score is lower than 500, only 4.5% of used-vehicle loans are available. You may be required to check with your state requirements. Also, you may have to lower your vehicle standards to buy a new vehicle without obliterating your budget.

Options don’t open up unless you have a credit score of 657. That’s not bad compared to a new-vehicle loan, which needs a 721 credit score. Keep in mind, Just because you have a high score does not mean that you are automatically entitled to get the best interest rates on new-vehicle loans.

6. Book Test Driving Appointments

Nearly one in three-vehicle buyers say they would not buy a vehicle without first taking a test drive. It is becoming increasingly common, and booking a test-drive for more than one vehicle is an even better idea. Oddly enough, most vehicle buyers only test-drive about two vehicles pre-purchase. The highest demographic being 57% of vehicle shoppers under 35 who test-drive more than one vehicle.

That figure decreases with age when applied to only 48% of buyers over 35. By doing this, the consumer can pick out the vehicle they would like to purchase without having to rely on the dealership’s salesman-led test-drive selection process. The test-drive gives the buyer a chance to see the vehicle in real life and experience how it handles the road. It’s relatively easy to book a test drive; two in five vehicle shoppers can do it via a mobile device.

7. Check For Used vehicle Alternatives

There are many benefits to buying used vehicles. For one, dealerships rebuild used vehicles to strict quality control standards. Not only will they run the same way for many years to come, but they are also much more affordable than brand-new vehicles. Surprisingly, used vehicles need less repair and maintenance work over their lifespan.

It may seem like a risky investment considering their potential for depreciation. However, this is not the case. Used vehicles are subject to the same codes and tests as a brand-new vehicle, so you won’t have to worry about them failing to meet safety regulations.

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