As with most Americans I am by no means in a comfortable financial state as of late, so when it came time to finally purchase a new car I had to be smart in order to avoid going deep into debt. This is how I preserved my credit while purchasing my new car.
The first thing that I had to do was to identify my price range and stick to it. To figure this out I went ahead and approached my local credit union for a car loan; credit unions tend to offer better rates than banks or auto dealerships, especially if your credit is less than perfect. After figuring out what I could afford for my monthly payments I figured out my budget.
The next step was to be patient and sell my current car myself. By giving it to the car dealer as a trade-in I would have sacrificed up to 30% of what I could get for it in cash. This enabled me to have a little cushion beyond my loan to put down on a car in order to buy something a little out of range if the right deal presented itself or to simply reduce my loan by a little bit. What you have to think of here is that paying an extra $1,000 for a car that potentially has a couple of years of life extra in it is actually a wise investment as it will allow you to put off your next car purchase a little bit longer.
On the patience front it was also crucial to shop around, a lot. Not only did I hit up all of the car dealers in my area by I scavenged through suitable listings in the newspaper, on Craigslist and in a couple of spots that are known for people leaving their cars for sale because of the busy road frontage.
Believe it or not the best deal I found was actually a used car being sold by an individual. This is especially true with the way the economy is now and the negotiability you have due to other people’s financial hardships. Just be sure to do as I did and take it for a good test drive to your trusted mechanic; even if you do find something wrong this allows you to bring up another point to take money off of the asking price.
This is how I purchased my car without going into debt. Follow these tips and you can be sure to do the same.