Mind Your Finances Workbook: Buying And Financing Your New Car

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Also Available in Spanish

Part of the Mind Your Finances series of personal finance workbooks , this guide examines the biggest purchase you are likely to make in your lifetime other than your home: a new car. Learn key car-buying concepts: how to prioritize your wants, basic pre-purchase research, leasing vs. buying, important negotiating tips and more.

Learning objectives:

Prioritize your wants. Keep this in mind: A car is not an investment. Unless the car you want is a fully-restored, mint-condition classic, you car will lose some of its monetary value each day you own it. In fact, nothing loses its value in the first year as quickly as a new car.

Research before you purchase. The goal of this research is to maintain an open mind about what you want and need and the range of available alternatives.

Fit your vehicle expense into your budget. For many of us, the purchase of an automobile probably ranks as the second-largest buying decision you will make in your lifetime.

Determine if will lease or buy. The vehicles under consideration likely are available for ownership or lease, and figuring out which option is best for you will depend on several factors.

Negotiate with the dealer. The keys to success in negotiating a car purchase or lease:

• Never reveal what you can afford. If you let the salesperson know what you can afford, he or she may not lower the price as much as possible.
• Obtain a firm price for the car before discussing any other aspects of the deal, such as trade-in value, financing, incentives or service contracts. This price then provides a basis for comparison between dealers and as the basis for negotiation.
• Ask for the dealer's best offer. If the answers you receive wind up changing your decision, make sure it still fits within your financial priorities.
• Be willing to walk away from the deal if it is not satisfactory.

Make the decision. Major buying decisions should be made at home where you can concentrate on all aspects of the decision without pressure from the salesperson. You're more likely to make an informed decision based on facts and logic, not on emotion. Whatever you decide, make sure it fits comfortably within your financial plan.

Buy This Workbook  
Also Available in Spanish