Tue, 05 September 2023
Buying a car can be stressful. Whether it’s picking up a brand-new motor or finding a second-hand deal, it can be overwhelming. There’s a lot of choice, possibly too much of it, and there are many factors which can add to your anxiety. This month, we have a special feature on economy motoring in the Kingdom and below, Kristian Harrison discusses the best tips for buying a car on a budget.
Buying a car is often the second largest investment most people will make after buying a house. Therefore, there are various aspects to keep in mind when on the hunt. With a mixture of my own experiences and those of others, here a few tips that should help assuage your apprehensions and enable you to afford the right vehicle without dipping too deeply into your bank account
What can you afford?
If this seems obvious, you’d probably be surprised how far down ‘affordability’ lands on people’s priority lists. After all, shopping for a new car is exciting! But before the thrill of a test drive and that ‘new car smell’ influence an impulse purchase, I highly recommend taking the time to evaluate how much you can truly afford. As you think about your budget, consider all the costs of purchasing a car. Down payments, dealership fees and registration fees are just a few additional costs that will impact what you can afford and should be factored into your car-buying budget.
Further costs down the line
While it’s appropriate to focus on getting the best terms for your initial purchase, there are other expenses beyond your interest rate and monthly loan payment that are worthy of consideration. Interested in a larger vehicle model like a truck or a family-sized SUV? You’ll want to consider how fuel costs will fit into your monthly expenses. Got your eye on a sleek new luxury sedan? Research the maintenance costs of that specific make and model. The cost and expected frequency of oil changes and other routine repairs might surprise you.
New or used?
The age-old question. We’ve all heard the story about a new car losing a large chunk of its value as soon as you drive off out the showroom, but dealer perks like free services and additional warranties, plus a lower cost to insure and the latest technology when it comes to fuel efficiency can significantly close the gap when it comes to total cost of ownership.
Obviously, buying used brings an initial saving but be honest with yourself about how long you plan to keep this vehicle and how the terms of your loan match up with that plan. This will help you avoid the reverse situation where your vehicle is worth less than what you owe when you might find yourself in the market again. Also, if possible, check its service history to ensure you aren’t buying a money pit that’s more trouble than it’s worth.
Don’t be afraid to negotiate
Western countries have an inherent fear of negotiation for the best price (and I’m very guilty of this myself!). However, in this part of the world it is almost expected and you can save significantly by merely haggling with the seller when buying a car. This includes negotiating the price of any vehicle you might be trading in.
Read any contract thoroughly
This may seem obvious, but it’s incredibly important! Before you sign on the dotted line, it’s generally wise to sleep on it and be sure you’re only buying what you need. This will also give you time to read the contract in full and make sure the payments will work with your budget.