Want to spend a ton of money when you purchase your next car? Unless you've stumbled across some buried treasure, the answer to that question is probably no. Unfortunately, many drivers don't know what to do to keep cash in their wallets. Here are a few do's and don'ts to keep in mind when shopping around for cars.
Don't: Buy a new model
We get it: A lot of people want to enjoy that new car smell when they get behind the wheel. However, not many know how much that aroma actually costs. Yes, you're getting a high-quality car, but the second you drive off the lot it begins dropping in value. Yahoo reported that a new vehicle with a sticker price of $30,000 loses more than half its value in the first three years of ownership – a fact that can leave you owing more money than your ride is worth very quickly.
Do: Find a used car
Your best bet for saving money may be to find used cars that meet your needs. Today's used cars offer many of the same technology and safety features that you'd see on a newer model, all at a lower price. If you can find an option that's been well-maintained and has the qualities you like, you might want to jump on it.
Don't: Blindly agree to a loan
Most buyers will need some kind of help affording a car, regardless of whether it's new or used. If you fall into this category, make sure you're doing your research before agreeing to a loan. Just because you think an offer may be the best to come along doesn't make it so. Look up average loan terms and interest rates for your area and budget, and use online calculators to check that your offer is fair.
Do: Look for a shorter loan
Many drivers, especially those who are classified as "subprime," may be tempted to accept a longer loan because it allows smaller monthly payments. However, with these agreements you'll probably be paying much more in the long run – maybe even more than the car is worth. Try to scrounge up money for a hefty down payment or splurge for the shorter loan instead.
If you need help finding a used car, head to NJ State Auto Auction. Not only does the auction lot have hundreds of Carfax-certified used vehicles for sale, but it also has an in-house financing team that can help save you money.