Looking for a car? Look around

Looking for new wheels? There are few markets (or products) that offer more variable pricing. A word to the wise: before you even hit the lot at the dealership or do your online search, set your budget and outline your plan of attack.

How much can you afford?

Car payments can serve as the ultimate cash flow vacuum, so make sure that you are staying well below your budget cap.

Don’t forget that ownership of a car will involve other expenses on an ongoing basis (like gas, insurance, repairs and parking).

Buy used

You may have heard that a car begins to depreciate in value the minute it leaves the parking lot. Sadly, this is true.

Yes, brand new cars are shiny and have that wonderful new car smell. It’s also pretty cool to see the odometer in the single or low double digits. However, when you attach a dollar amount, those bonuses don’t really make sense financially.

Save yourself lots (and lots) of money and seek out a quality used car.

The financing trap

It is becoming more and more commonplace for car dealers to offer super-low financing for super-long periods.

Don’t be fooled by the numbers and language around this. It’s lending smoke and mirrors. Some offer terms of up to nine years (which is 86 months in car dealer speak, which doesn’t sound as long).

Think about it. Like I said, your car is a depreciating asset. If it starts depreciating now, how much is it going to be worth in 9 years? Also, don’t forget all of the interest that you are going to pay over those longer periods as well.

Timing is everything

Typically, the early spring is high season for car sales. Consider doing a little research now and then postponing your purchase until the fall, when prices will likely be lower. It also gives you time to accumulate a larger down payment, which means less to finance.