Buying a new vehicle is one of the biggest financial commitment you’ll make in your lifetime. So take the time, do the research and most importantly, ask the right questions.
1. What is the Length of the Loan? What is My Interest Rate?
It’s important to understand how long you’ll be making payments for. The average auto loan is 60 months but can range in length anywhere between 24 and 96 months.
You’ll also want to know what interest rate you’ll be paying the loan back at. When you determine the length of the vehicle loan and the interest rate, you’ll then able to figure out how much you’ll be paying in interest overall.
For example, if you finance a $30,000 vehicle over 60 months at an interest rate of 7%, you’ll be paying $5,642.16 in total interest. Knowing how much interest you’ll be paying over the course of ownership can have a huge impact on your decision.
Although a shorter loan may seem better at the time because you ultimately pay less in interest, the payments can become unmanageable over time. Choose both a length of time and a monthly payment that makes sense for you financially.
2. What Fees are Included in the Price of the Vehicle?
A lot of dealerships have mandatory fees built into the price of the vehicle. Often times they’re called Administration Fees and are typically costs associated with running a car dealership. Not all dealerships have these fees, though.
For example, Go Auto has absolutely no hidden costs built into any of their vehicles. What you see is what you get, plus GST. When you do decide to buy a vehicle, make sure it’s at a dealership you can trust. And if there are hidden fees, understand what they are for and how much you’re being charged.
3. Where is the Nearest Dealer / Service Center to My House?
Say you find a vehicle you love online, but it’s five hours away. You drive all the way there and decided to buy it. Soon you realize, though, that there isn’t a dealership near your home that can service your new car. Now what?
Always make sure there is dealership near your home that you trust, and that can properly service your vehicle. This includes ordering the right parts and routine maintenance.
4. Can I Take It For a Test Drive?
This may seem like an obvious suggestion, but it’s important enough that it merits mentioning. Always make sure you take the vehicle you’re interested in out for a test drive before you buy. Then, make sure you give it a thorough visual inspection.
On your test drive, ask the following questions:
- Is the vehicle AWD?
- Has it ever been repainted?
- Are there any signs of smoking or pets?
- Do all the windows and locks work?
- Do all of the lights, wipers and stereo work?
- How many keys and remotes are included with the car?
- Does the cigarette lighter work?
5. What Warranty is Included With the Vehicle?
When you’re buying a new vehicle, it will usually come with some type of manufacturer’s warranty. This warranty is either bumper-to-bumper coverage, powertrain coverage, or a combination of both.
A bumper-to-bumper warranty (otherwise known as comprehensive warranty) typically covers all the parts and systems of your vehicle for a pre-set amount of time or kilometers. A powertrain warranty refers to your engine, drive axles, transmission, or other major components of your vehicle’s operating system.
Previously owned vehicles are a little bit different. Some vehicles still fall under the manufacturer’s warranty, if they’re new enough. Others, especially older vehicles, are no longer covered by the manufacturer. In these situations, the dealership you’re purchasing through may offer you an extended warranty.
One of the main reasons people avoid buying a used vehicle is the uncertainty that comes with it. If the vehicle has an issue and it’s no longer covered by a manufacturer’s warranty, you’ll be on the hook for those costs. Buying an extended warranty fills the gap between a manufacturers warranty and the period of time you’re left uncovered. It takes the uncertainty out of buying used.
6. What is the Total Cost of the Vehicle with Taxes?
While it’s necessary to break down the cost of the vehicle in terms of your monthly payments, it’s also important to understand what you’ll be paying, with interest, overall.
In addition to ensuring the monthly payments are manageable, make sure the total cost of the vehicle is something you’re comfortable with.
7. Does This Vehicle Make Me Happy?
While the last few questions have been important to ask the salesperson, this question is important to ask yourself. Buying a new vehicle is a big decision. While buying the cheapest vehicle may seem like the most financially sensible choice at the time, you need to make sure that the vehicle you end up buying makes you happy.
Sometimes choosing a more expensive vehicle may not seem like a prudent decision. But with dealer incentives, guaranteed manufactures warranties and low financing rates, it can actually make more sense in the long run.
At the end of the day, you’ll be spending a lot of time behind the wheel. Make sure it’s in a vehicle you love.
Go Auto has the answers to these questions built right into our business model. We’re up front about pricing and we never include hidden fees.
You never have to be worried about finding a dealership you can trust in your neighborhood; we have 38 locations across Western Canada. Plus, your Go Card earns you 10% on parts and services every time you bring your vehicle in.
Go Auto customers are always encouraged to take their vehicle out for a test drive. Even better? All of our previously owned vehicles come with a free Vehicle History Report and a 140-point inspection, both mechanical and visual, from a Factory Certified Technician.
Finally, Go Auto offers a Certified Warranty with every used vehicle made in the last 10 years, up to three months or 5,000 kilometers. And if the vehicle you buy doesn’t make you happy, you can exchange it for a vehicle of comparable value within the first 30 days.
To learn more, click here.