Buying a car? 6 steps to avoid costly mistakes

1050. Buying a car can feel like a financial landmine. Host Laura Adams answers a listener’s question about buying a car before starting his first job. You’ll learn how to evaluate your current car, set a budget, secure financing, and find a great deal that doesn’t wreck your financial goals!

Key Takeaways:

• Compare a car’s repair bill against months of new car payments and a potentially higher insurance premium before giving up on an older vehicle.
• To keep transportation costs affordable, follow the 20/4/10 rule to put 20% down, finance for no more than four years, and cap total expenses at 10% of income.
• Get an auto loan pre-approval before you start car shopping so you have an interest rate benchmark if a dealer offers financing.
• Request auto insurance quotes for different cars you’re considering so you understand the cost before buying a vehicle.
• Focus negotiation on a vehicle’s total purchase price rather than the monthly payments, which can be adjusted to include fees or longer loan terms.
• Leasing a car may make financial sense if you need a lower monthly payment, drive lower annual miles, prefer a new vehicle every few years, and don’t care about building long-term equity.

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Transcripts available at QuickandDirtyTips.com.

Email: Laura@LauraDAdams.com or leave a voicemail: (302) 364-0308.

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