Buying a car, while exciting, is a decision that takes planning. Aside from examining safety features, look, technology, and gas efficiency it is just as important to consider the financial aspects of financing a car.
According to Edmunds. com, in 2014, the average price for buying a used car was $16,800 and continues to rise. For students considering buying a used car, it is important to consider the expense and the possibility of managing more debt on top of student loan payments and other financial obligations. There is some basic knowledge any car buyer should know before stepping into a dealership.
Calculate monthly payments in advance. The price online is not an accurate representation of how much it will cost to buy a car. The dealership will bargain and the price will either increase or decrease, which impacts the monthly payments as well. Consider the amount that is being financed, the interest rate, and the loan terms. For help with the calculations refer to onlineloancalculator.org.
Consider the hidden fees. Dealerships charge fees that may not be considered. For instance, taxes, registration fees, delivery charges, and will most likely offer add-ons such as warranties and credit life insurance. One way to ensure the lowest payment is to do research. Shop around and see where the lowest interest rates are. Having a longer loan repayment means a lower monthly payment but can outlive the car itself and will include more interest. To learn more about hidden fees and negotiating tips refer to autotrader.com and search for the article “Hidden Costs of Buying a New Car.”
Consider leasing instead of buying. There are mixed reviews on leasing cars. Leasing is a way to have lower loan payments, as customers are only paying for the depreciation and not the total of that car. While it is more difficult to calculate the monthly payment of a leased car because payments are determined by the cars’ depreciation, there are calculators that will give a close estimation. To examine these monthly rates, go to calculator. net/auto-lease-calculator.html.
Car buying is an important and expensive decision that requires a lot of research. Don’t dive into financing a new or used car without considering the effect it will have on budgets.

Amy Sumsion
Amy is a junior at SNHU in the Bradley Three Year Honors Program studying Business Administration with a concentration in Accounting. Along with her involvement in the newspaper, Amy also dedicates her time as Treasurer of the National Society of Collegiate Scholars while being the general member for other clubs on campus such as Admission Student Leaders and CAPE. She is also the Financial Literacy Assistant for Student Financial Services. Amy looks forward to her second year in the Penmen Press and her continuing role on the newspaper writing about financial literacy.