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Worried about inflation while purchasing car? Here’s how you can land your hand on an affordable car deal. Get your money ready and check out this article!
Buying a car is never an easy task. For some buyers, the features and models can be an issue, for others, affordability is the main problem. Whatever it is, you know that buying a car during inflation can make things 10 times worse.
How? Inflation, in the case of automobiles, can be a double-edged sword. On one hand, since due to high prices manufacturing costs are high too, producers produce less number of cars.
On the other hand, to reap the maximum possible benefits, car dealers generally raise the prices and make negotiating difficult and hence, creating problems for people looking to understand how much to spend on a car and if they can really afford it.
Currently, as we are finally recovering from the recession, inflation is at its highest, and therefore, car affordability is at its all-time low! These conditions might lead to overspending if you are planning to buy a car right now. What to do then?
Perhaps a strong strategy and thorough planning can help you save some of your money while buying a car during inflation. Let’s take a look at a few of such car-buying tips!
Tips to help you buy an affordable car during inflation
1. Start With Basics- What Can You Afford?
As you start your research on what car to buy or when to buy, make sure you know what you can spend.
Straining your financial health for a car might not be a very sound option, therefore, always plan these big expenditures by having a glance at your budget.
Also, don’t forget to keep track of additional expenses.
Maintenance, insurance, registration, fuel, and other down payments will become a part of your spending as soon as you buy a car. Therefore, it is important to know what extra expenses you might have to deal with on a regular basis.
Know your budget and that’ll help you to avoid overspending while purchasing a car.
Here’s a quick rule of thumb related to car spending: never spend more than 50% of your annual income on a car Or never spend more than 15% of your monthly income on a car.
2. Check Prices With Different Dealers
If car affordability is the problem for you and you fear overspending, then here’s what to do- research the prices of different models with different dealers. You’ll often find different dealers charging different prices for the same model, and you can use that to your advantage.
You can easily purchase your car from an affordable dealer.
3. Narrow Down Your Choices- Don’t Overwhelm Yourself
Now, while it may not be a very common problem, first-time buyers always face this. Which exact car to purchase is definitely a difficult decision to make especially when there are so many options available.
While affordability matters, there are instances where we are tempted to buy specific features like additional safety, etc. and that might cost you more. In such cases, you must narrow down your choices.
List down what features you definitely want and what you can compromise on. Once done, look for the closest options and then settle your choice.
4. Try Contacting the Manufacturer Directly
You know you can actually place the order for your new car directly with the manufacturer? And that the process is not at all cumbersome? Well, it's true!
Especially if you have a specific model in your mind that isn’t currently available with the dealers around you or if you find that the prices are high, you can contact the manufacturer.
All you have to do is look for the legit manufacturer’s website and select your model or features and click place order. Shockingly simple, isn't it?
In addition since you won’t have to pay additional dealer markups, you will save a good amount of money too since manufacturer’s sticker prices are pretty reasonable.
The only problem might be that your car will take several months to reach you. So, be patient if you can to get your car at a reasonable price.
5. Loans Might Help
Taking loans for cars isn’t a new option. For people with good credit scores and good collateral, it is much easier to finance your car purchase through a loan.
Make sure that if you are taking a loan, you get the approval before actually heading for the car purchase. This will give you an idea of how much you can actually spend since you will soon be paying interest too.
6. Be Careful of Second Hand Cars
With high inflation in place, we tend to think that used cars are a better option. They might be, but they are not the best option.
Even after proper checks, you might not be able to detect the mechanical problems. Plus, inflation works on used cars in the same way it does on the new cars.
So, unless you have researched enough and bought a certified pre-used car from a reputable dealer, new cars are a better option.
7. Negotiate As Much As Possible
Is anything more aggressive than the sale tactics of car dealers or anything higher than the initial price they demand? Perhaps not.
Car dealerships are known for their apt selling skills and as a buyer, you need to buckle up for that.
When you buy from a dealer, you know that they are adding their profit margins. How much? You can guess if you have researched enough. All you have to do is negotiate and try to bring some of the prices down.
Also, remember that it is completely okay to walk away if the deal doesn’t fit right within your financial criteria- you can always find another dealer!
Car purchases must be done strategically especially when you are dealing with inflation on the side.
Prices are high, no doubt, but you can always look for affordable models, dealers, or loans.
If you're determined to buy a car, start with arranging your financial resources for the same. At least, just ensure that you are not straining your long-run financial health.
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