New Car Buying Tips
It’s Car Buying Season! Bearingstar discusses how to quickly prepare for the process with a few new car buying tips.
At Bearingstar, we know that there are so many things to love about a new car – spotless interior, no dings or dents, and that new car smell. But how can you hold onto those new car good vibrations for as long as possible? The Bearingstar team would like to share a few tips that may help you get, and stay, in your happy place with your car for a long, long time. In addition to following these steps, it’s also always a good idea to contact your Bearingstar agent before signing any paperwork.
Negotiating The Best Deal
Right now, if you are considering a new car, you may be torn between having the car you’ve been dreaming of, while also keeping your car payments and related expenses manageable. Can we sway you towards that more affordable, no frills hatchback versus the luxury, tech-centric car or truck you’ve had your eye on. Probably not! However, what Bearingstar Insurance can do, is share some advice we’ve researched on how to successfully get through the price-negotiation process.
This is when being on the debate team in school would come in handy, but if you never had that as an extracurricular activity, you are instead going to have to do some old school cramming. Luckily, there is an abundance of deal-making information available that may help both novice and experienced car buyers.
Forbes.com interviewed hundreds of auto dealers along with satisfied – and dissatisfied – customers for their 2014 article, “How To Get The Best Deal On A New Car Without Being Taken For A Ride.” According to their write-up, once you have chosen your vehicle of choice based on need, budget and long-term cost implications, like resale value and fuel efficiency, it’s time to talk money. Here are the 3 key steps they recommend you take to get to a place that feels comfortable financially for you:
- 1. Establish your “target” price by consulting online price guides like NADA or Kelley Blue Book to determine both the MSRP (manufacturer’s suggested retail price) and the invoice prices of all models under consideration, including their options
- 2. Investigate any and all incentives, from those located on the automakers’ websites, to special incentives for military or recent college graduates to “secret rebates” that automakers may have given to a dealer
- 3. Use the Internet to compare offers from multiple dealers and pit them against each other until you’ve reached the lowest possible price
One word of caution from Forbes is that the more popular the vehicle you are choosing, the harder it is going to be for you to negotiate down from the sticker price.
New Vehicle Financing Facts
While you may do a slam-dunk job negotiating the final price for your car, you could still end up paying more each month than you can afford if you don’t get the right financing terms. So what can you do to affect that?
We consulted Cars.com to find out the key factors to focus on when seeking a car loan or financing for a lease:
- Know what your credit score is and do your best to get it to good, or better yet, excellent (generally, a 720 or up according to nerdwallet.com) before negotiating
- Clear your other debt as much as possible so that your debt-to-income ratio looks reasonable to a potential lender
- If you are buying, then consider putting a sizeable down payment on the vehicle as the smaller the number you need to borrow, the more favorable your loan terms may be
- Shorten the term of the loan as much as possible to appear a “good bet” to the potential lender
- You can also shop around for the lowest interest rates, including consulting automakers’ websites to see if they have any financing deals available
Following these five steps can give you critical knowledge about the best financing rates available. Ultimately, all this preparation could have you happily leaving the car dealership in your new vehicle at the right price.
Insuring your new vehicle
Just because we put this section last doesn’t mean that it is the last thing you should think about when purchasing a new car. In fact, signing the paperwork to buy a vehicle before you speak with your insurance agent is kind of like putting the cart before the horse.
Prior to making any auto purchase decision, Bearingstar strongly recommends you speak to your insurance agent so you can understand in advance how your new car may affect your insurance premium. Your new car doesn’t necessarily have to cost any more to insure than the one you are about to trade in; it all depends on several factors.
The good news is that by working with your local insurance agent, Bearingstar, you can positively affect your insurance premium whether it’s on your new car or the one you have now. Here are four practical and easy-to-implement suggestions from our team:
- 1. Consider ways that might work for you to reduce your annual mileage. For instance, can you utilize options such as carpooling, public transit, or walking or biking for your daily commute, weekend activities, or running errands.
- 2. Decide what technology is essential to you and what you can live with out – for now. In general, today’s vehicles are more tech-savvy than ever before, which makes them increasingly complex to repair and more vulnerable to new incidents, like a cyber attack. These advances may be responsible for increased insurance costs for everyone. According to GAO (U.S. Government Accountability Office) today’s modern luxury vehicles require 100 million lines of software code to run all of their new technologies. Compare that to 1.7 million lines of code for a U.S. Air Force Jet Fighter or 6.5 million lines of code for a Boeing 787 Dreamliner, and you can see why insuring today’s vehicles for repairs and replacement costs may be driving premiums up. Talk to your insurance agent about which technologies are considered safety features and may actually reduce your insurance premium, versus those that are simply gizmos and gadgets that actually may be more distracting than beneficial.
- 3. Help make the road safer for you and everyone else using it. Traffic fatalities were up significantly in 2015 according to a National Safety Council Many of the reasons for the rise in auto accidents, and resulting fatalities, stem from driver behavior. But you can be the change. Start by obeying the rules of the road, leaving your phone out of sight while driving, and pulling over to the side of the road to do any activity including eating, sending a text, or checking out what the kids are doing in the backseat.
- 4. Simply go paperless. Finally, one of the easiest and “greenest” ways to make sure your premium is as low as possible is by ensuring that you are going paperless. Using EFT (electronic funds transfer) for your monthly payments can save you big-time on installment fees, and help you avoid surcharges for late payments and penalties for forgetting to renew your policy.
When you work with a Bearingstar agent, you can be certain that we are checking for any and all available discounts, like bundling your home with your auto under the same insurance carrier, Good Student, Student Away, Automatic Bill Bay/Pay In Full, and Military Away. We also make sure that these savings roll over from your current policy to any renewal or new policy. Please note that coverages and discounts offered may vary by state and carrier.
Bearingstar Insurance also offers additional auto insurance options like Accident Forgiveness and Disappearing Deductible that can have a long-term positive affect on your premium.
Finally, by consulting with your Bearingstar auto insurance agent prior to finalizing your new or used car purchase, we may be able to save you hundreds of dollars with our Auto Loan/Lease Gap endorsement. This important coverage does exactly what it sounds like it does – fills in a gap between what the insurance will pay out for an accident that causes a total loss of your vehicle and what you still owe on your car. This coverage applies whether you got a car loan or leased your vehicle. Please don’t let the dealership strong arm you into getting this coverage through them as it can be at a much higher price than the price we can get for drivers in Massachusetts and Connecticut.
We hope you found these new car buying tips helpful and just in time for you to get a great end-of-year deal. Please know that Bearingstar is here for you during your entire car-buying journey. Call us today if you are in the market for a new vehicle or if you would like us to see how we can lower the insurance premium on your current vehicle.