5 steps to buy a car

Step 1: Penny for Your Thoughts

Decide on your budget and stick to it. Stylish and gleaming new cars are the ultimate sirens but don’t fall into that trap. Or else you risk putting your regular life in jeopardy by having to pay unaffordable large monthly installments. Make your first car about convenience and transportation, not for status. When deciding on the price of a car financing, focus on two major points: The down payment and the monthly installment.

The Down Payment

This is the amount of money you have to immediately hand over to the bank before you can go to the car dealers. As a general rule, 30 percent of the total price would make a noticeable difference to the amount you pay as monthly installments.

Monthly Installments

In USA, according to the Consumer Reports recommends that your total monthly installment should be equal to or less than 36 percent of your monthly earning. Though it may not apply in Bangladesh, but this monthly installment will not the cheapest fixed expenditure for a longer time.  So before you buy a car, you need to sit down and calculate your monthly income and all necessary expenditures. The remaining amount is what you can afford to spend on your car’s monthly installment.  Don’t forget to figure in taxes, registration and car insurance costs!

An important point to note is that the car salesperson may try to persuade you to opt for a lengthier payment scheme that would minimize your monthly costs. However, falling into it may not be wise because you will end up paying a much larger accumulative interest over time. Have a determined price in mind before you walk into a dealership and guard it like your life.

Step 2: No Shortcuts for Your Homework

For your first vehicle, fun and glamor are not your priorities. Know exactly what you are going to use your car for and how you are going to use it. If you are in it for the long haul, focus on durability and reliability, not looks. If you are an environment enthusiast, look into electric cars or hybrid cars. However, electric cars may not be the best idea if you need to travel long distances at high speeds. And don’t forget to look into car reviews, both by professional test drivers and car owners.

Step 3: Never Skip a Test Drive

After you have shortlisted your prospective cars, go to a dealership and take them for a spin. Take your family with you if possible, if you are buying a family car because you need to see if everybody is comfortable in the car. Check if it performs well and if the driving and handling live up to your expectations.

It is always a good idea to have a checklist of things you need to check before you buy a car. Some websites give you ready made standardized checklists. Here are a few:

• “How to Test Drive a Car” from Carmudi.com.bd
• Test Drive Checklist from Consumer Reports

Step 4: Have Your Wheels Inspected

Taking a good mechanic along when you go to buy a car. They can easily spot possible problems which may need to large repair costs. Also, make sure the car you are taking home comes with a good and reasonable warranty.

Step 5: Get a Good Bargain!

As we mentioned before, decide on a feasible price range and do not deviate from it. You can skip extras like fabric protection, rust-proofing, and extended warranty. They are not strictly necessary. Also, if face to face negotiations regarding the price is not your strong suit, consider internet sales. That will prevent you from being carried away with the words of the salesperson and making not well thought out split second decisions.