Financial Factors to consider while buying a New Car

Buying a new car? We all have got different thoughts in mind for our first car. Even if it’s not your first car, you have multiple requirements and criteria according to which you select your new car. You might have seen many lists on the internet which might tell you about how you should choose your next car. In this article, we will tell you about the financial factors to consider while buying a new car. The factors which you are about to read usually go unnoticed by many while they step in the market to look for their next car. Believe me, if you take these factors seriously, you will have a great ownership experience! What are we waiting for? Let’s start!

1. Planning your finances
   

   

   We are talking about financial factors to consider while buying a car however, this can be a universal factor that can be considered anything which forms a major part of your earning. The math is simple. Allocate your expenditure to the necessities first rather than going for luxuries. We know buying a small car instead of a big one can be disappointing but not being able to pay the EMI can be even more disappointing!

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2. Residual Value or Resale Value
   

   

   Most of us buy a new car which is trending in the market. Many buyers in India go for a car that is already trending in the market or the one with the maximum discounts! What if I told you that the best selling cars are the hardest ones to re-sell. This is because they are too many in number, therefore, lose value in the used car market. On the other hand, cars with rebates and discounts also have a tendency to depreciate faster. If you do your research beforehand, you can save thousands when you go to sell your car in the used car market because you will anyhow have to do it in the future!

3. Your Credit Score
   

   

   Another important one in our list of financial factors while buying a car. Your credit score determines how well you will be treated if you apply for a car loan. If you are new to adulthood, you might not have a credit score but you can develop a good one by being a sincere citizen and paying your credit card bills or other debts on time. This can definitely help you save on the interest rates for your car’s loan.

   Read What is Negative Equity on Car Loans and how to get out of it

4. The Fuel
   

   

   Another important factor that you must consider while buying a new or a used car is the fuel you are going for. No matter how low your EMI may be, if the car doesn’t have good mileage, you will end up paying more. When we talk about fuel, Maruti Suzuki might be the first thought that will come to your mind. You are not wrong MS cars are some of the most fuel-efficient cars on the Indian roads. Considering the highly fluctuating fuel prices and your daily running, you can choose among petrol, diesel and CNG.

5. Choosing the Insurance
   

   

   This is one of the most confusing things that you will ever come across! There are so many inclusions in a car insurance policy that the buyers often get confused and end up paying more than they need to! We are not saying that this will help you save lacs but every penny counts. Although a comprehensive policy is a good option while buying a new car you should thoroughly check what all is included in the premium you are paying. Also, compare various insurance providers for the benefits they might provide in a similar price range.

6. Cost of ownership
   

   

   Continuing our list of financial factors to consider while buying a car, we come down to the cost of car ownership. This is the overall cost which you will have to bear through the lifetime. While GoMechanic can help you save up to 40% on car services, it is a universal fact that the spare parts for a higher range car are more expensive than those available for mid-range vehicles. Ask the service centre or maybe a person who already owns the vehicle for the cost of ownership which will majorly include the money spent on repair and service.

   Read Leasing vs Buying a Car | Which is the Practical choice?

7. Base Variant v/s Top-End Variant
   

   

   While the features available on the top-end variant might attract you to buy it, you shouldn’t get carried away. Many features that are available in the top-end variant are also available in the aftermarket for a cheaper price. Also, you need to ask yourself, do you really need a sunroof? If you are only getting the top-end variant for the experience, you need to rethink and sort your finances first.

8. Waiting for the correct time
   

   

   What’s the perfect time to buy a car? No, it’s not the festive season. No matter how huge the festive discount might look, you will always get a better offer towards the end of the year. This is because all the dealerships want to get rid of the old stock and make way for the newly manufactured stock in the upcoming year. Therefore, the best month to go on a car hunt is probably December.

9. Car Loans
   

   

   While we have already discussed the confusions and possibilities of saving on a car loan, we can’t let it go unnoticed in this one too. Last but not least, ending our list of financial factors to consider while buying a car is the loan. How much amount you are paying as a down payment? How much interest rate is the bank putting on your interest? There are multiple factors which can help you save on your car loans. Want to know about car loan eligibility? Here you go!

   Read How to Check your Car Loan Eligibility before applying for one

This was all for our list of financial factors that you need to consider while going for a new car. All these factors can help you get a good car along with huge savings. Share this article with all those planning to buy a new car and help them make a good financial decision so that they don’t face any difficulty with their car’s finances in the future.