Whether you’ve had the same car for a number of years or are looking to buy your first one, there are a number of questions you should ask yourself before taking the next step and buying a new car.
How are your Finances?
One of the first things you should look at when considering whether or not you’re ready to buy a new car is if you can realistically afford it. In addition to the actual car payments, you’ll need to have enough contingency money set aside to cover any unforeseen expenses and you’ll need to check how much your insurance is going to cost each month.
How are you planning on financing your new vehicle? Have you already been pre-approved for a loan through your bank (the best option) or are you planning on getting financing directly through the dealership? What about your down payment – do you have enough saved up or should you wait a few more months until you’ve got a more comfortable savings buffer?
Have you done your Research?
Make sure you have a list of vehicles you’re interested in rather than just focusing on one specific make or model. As dead set as you might be on a certain vehicle right now, you may be surprised to discover that it doesn’t feel like the right fit when you finally see it in person and/or take it for a test drive.
What is the environmental impact of the vehicle you’re interested in? Assuming you’re not buying an electric or hybrid vehicle, how much will it cost to fill the tank with gas? Are there any promotions or deals online that could help you save some additional money? Have you considered buying a used car or leasing a vehicle rather than buying new?
Remember to expand your reach beyond just the dealerships immediately closest to your home. On top of doing price comparisons online, visit and speak to different dealers to ensure you’re getting the best deal
If you’re still uncertain, a good rule of thumb is to see what the general consensus is online from other owners of the vehicles you’re considering buying. While you should never take the word of a stranger on the internet as gospel, reading reviews can be a great resource when you’re trying to narrow your choices down.
You’ll know your done researching when you’ve found a short list of vehicles that appeal to you aesthetically, that complement your lifestyle, and that fit comfortably within your budget.
What’s the Trade-In Value of your Current Vehicle?
One of the main inconveniences that comes with buying a new car is trying to figure out what to do with the old one. While some people sell their car to a family member, friend, or random person on Craigslist, one of the most common options is to trade it in to the dealership. Depending on the age and the value of the car, you’ll get some money back that can be applied to the down payment on your new car.
If you opt to do a trade-in, make sure you do your research and look up for yourself what the current value of your car is rather than just relying on the dealer to tell you. In the past, the best option was to get an in-person appraisal but with the advent of the internet, there are a number of additional resources available right at your fingertips. In Canada, some examples of online tools that you can use to determine the trade-in value of your vehicle are Canadian Black Book, VMR Canada, and Auto Trader.
Black Book is the best option because it allows you to figure out the actual trade-in value by using your location, trim level, add-ons, and the number of kilometres on your odometer. Additionally, you can enter in the price of the new vehicle you’re planning on buying to replace it.
It’s important to note that Black Book will only let you do an appraisal on a vehicle from 2002 or newer. For anything older, you’ll need to use VMR Canada (which covers vehicles from 1983 onwards). VMR Canada does not offer the level of detail and customization that Black Book does so expect it to give you more of a ballpark figure than an exact estimate.
Are you Currently in an Upside-Down Loan?
Car loan terms have ballooned from the standard 36 months to 60 months or longer. This means that, by the end of the loan period, some owners are paying more for their vehicle than the vehicle is actually worth.
This can make buying a new vehicle difficult and expensive so if you’re still making payments on your old car, it’s important to check that the loan hasn’t gone upside down and isn’t going to negatively affect things.
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