6 Easy Steps to a Smart Car Buy

By Justin Reynolds

Repossessions are on the rise. Even consumers with excellent credit histories are being affected by today's tough economy. People are finding that their over inflated vehicle payments are strapping them for cash and they simply can't afford to keep up. Follow these six simple steps to make the smartest buy possible and avoid the pain of an over inflated payment.

1) Never, Never Buy Your New Vehicle The Same Day You First Find It

Always, always see if the car dealership will allow you to take the vehicle home for the night before signing the contract. You need time to evaluate the deal and the vehicle in a pressure free environment, without any sales people or sales managers trying to cloud your judgment and use your emotions against you.

This is one of many car buying tips available, but an important one. Follow these steps and you will not only make a smart buy, but also make the entire experience much easier and more enjoyable.

2) Negotiate The Best Deal

This may sound difficult for some, but it is really not as hard as you think. Keep in mind that for every thousand dollars you are able to lower the sale price or get more for your trade, you will save an average of $20-$30 per month. If you were able to negotiate $4,000 off the sale price that would equate to $80-$120 per month in savings. That's big!

3) Arrange Your Own Financing

Car Dealerships make big money when they arrange financing for you. Of course, if they can beat the best rate you were able to get on your own, then finance with their source.

4) Shop Online

Competition is fierce online and you can shop a multitude of car dealerships with a simple click of your mouse.

5) Do Not Buy More Than You Can Comfortably Afford

An example would be someone making $2,000 a month and taking on a $500 a month car payment. You may think at the time you buy your new car you can make this payment, but I'm willing to bet you'll regret it a few months down the line. I would suggest a payment that is no more than 15% of your gross monthly income.

6) Do Not Buy New Vehicles

This is due to the massive and immediate loss in value you will realize as soon as you drive off the car dealerships lot. The only time it may be okay to buy a new vehicle is if you lease the vehicle, or employee pricing is available in addition to large rebates and special finance rates.