homepersonal finance News6 financial factors to consider while buying a car

6 financial factors to consider while buying a car

6 financial factors to consider while buying a car
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By Anshul  Nov 16, 2020 1:45:46 PM IST (Updated)

Buying a new car entails financial implications to a person or family.

Buying a new car entails financial implications to a person or family. Therefore every person needs to consider several factors before making the big purchase.

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Here are 6 financial factors to consider before buying a new car, according to CarDekho:
Choosing the car and planning the finances
A car is said to be the second most expensive decision after a house in anyone’s life. Hence, it should be a thought-through decision. Bigger the target, the bigger financial planning it requires.
The first thing a customer needs to decide is the type of car he/she wants to buy. There is a simple set of questions that one can ask to find the most suitable fit such as the size of the car, the requirement and the budget. It's important to decide how much should one put into it and what kind of car would meet up the finances. Setting a realistic budget is a financially smart move.
There is no point in buying a big car out of social aspiration which would be of no utility and eat into the pocket every time.
Resale value
A car that is trending in the market has many eyeballs to it and the same can be said for cars with a long list of discounts and offers. So, with the aid of proper and dedicated research, one can make considerable savings when selling cars in the used car market.
It’s better to go for a car that may give lucrative value on resale.
Credit score
Indians often prefer to buy a car with car loans as it enables them to plan their expenditure in the long run. In such cases, the credit score determines how much loan one can expect from the financial institution.
Fuel capacity (Mileage)
Mileage is an important factor when buying a used car, but is often overlooked. One can get swept away on cars offering the best mileage, or other measures of efficiency, but low or high mileage affects the value of the car during purchase and sale. So does the likely cost of maintenance and servicing.
Car loans
In case the car is not purchased outright through a full down payment, it’ll have to be financed in some way.
One should start shopping for loans early as that will give a better idea of what kind of interest rate and loan amount one can expect once the time comes to secure a financing option. Comparing rates from banks or credit unions to other lenders can help customers in finding out the best option.
Car insurance
There are so many inclusions in a car insurance policy that buyers often get confused and end up paying more than they need to.
Although a comprehensive policy is a good option while buying a new car, one should thoroughly check what all is included in the premium he/she is paying. It's important to compare various insurance providers for the benefits they might provide in a similar price range.
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