You have recently graduated high school and now you are ready to go to college. Whether you are in-state or out-of-state, get ready to go on the best road trip of your life. But first, you’ll need a car. Here, you’ll find tips on buying and leasing.
Buying
Establish a Budget
Start by asking yourself what you can afford. This will let you know which cars you can buy and which ones to save for when you graduate college and get a full-time job. If you can afford to buy it upfront, then go for it! If you can’t, financing is an option.
If you do choose to finance, calculate how much you can spend a month on car payments. In this case, it’s best if you don’t spend more than 10% of your monthly gross income on payments.
Identify and Prioritize Your Wants
What do you want most in a car? Do you want a good looking car? An economical car? A sedan? An SUV? A truck?
Make sure you know the answers to those questions, otherwise you might end up with a car that you didn’t want in the first place.
Test Drive
This is one of the most important steps.
Test drive all of the options to make the perfect selection.
New cars are usually in good conditions. Old cars, however, may not be, so make sure you run the car through a professional mechanic. Sure, it may cost money, but it could save you in the long run.
Leasing
Many drivers are aware of how car leases work, but they don’t know that by using just a few tips, they can end up saving a lot of money. Here are four leasing strategies you may not have realized existed:
Extend Your Lease Month-to-Month
Just because your lease is about to expire, it doesn’t mean that you’ll have to decide whether to buy the car immediately or whether you should find a new one. Many dealerships will let you extend the lease on a month-to-month basis if you’re still unsure if you want to keep the car or not. This gives you extra time to do further research on vehicles currently on the market and to decide if you want to purchase the car you’re leasing.
Sign a Single-Payment Lease
If you have an influx of cash and prefer to lease instead of finance, you should inquire about signing a single-payment lease. A single-payment lease, also known as a single-pay or pre-pay lease, is similar to a standard lease, the only difference is that instead of having monthly payments, the entire amount is paid at the beginning of the lease. This will help you avoid the burden of having to pay a set amount each month you’ll also probably get a lower interest rate.
Gap Insurance
According to the Insurance Information Institute, gap insurance is “the difference between what a vehicle is currently worth and the amount you actually owe on it.” In the event that you get into an accident, gap insurance would cover you for this difference between market value and the amount you own on the vehicle. It’s a good idea to get gap insurance when leasing since you generally pay less on a monthly basis and you could otherwise end up owning thousands of dollars if your car is totaled early in the lease.
Make a Bigger Down Payment
When leasing, you’re paying the difference between the price of the vehicle and the value at the end of the contract, making a bigger down payment is the way to go. For example, if you’re considering buying a vehicle worth $25,000 and make a down payment of $2,500, you’re paying 10% of what you owe if you finance. However, if the residual value of the car is $12,500, paying that same amount for the down payment, means that you’ve paid 20% of what you owe, which could mean a lower monthly rate.
If you’re thinking of buying or leasing a car, call 305-637-5319 or visit our website to learn more about what models we have available. We hope you have a safe drive to school!
Connect with us
