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Car shopping in 2021: What to expect and what to consider before buying your next car.

We may be driving less than we were a year ago, but it’s not just our driving habits that have changed. Car shopping has changed, too. For most U.S. households, transportation is the second largest expense category after housing. Besides the initial investment, there are ongoing fixed and variable costs related to owning and driving a car. Understanding how car shopping has changed — and educating yourself about how to get the best car for your money — can help you make the right decision for your transportation needs and for your budget.

How has car shopping changed?

Social distancing and safety concerns due to COVID-19 have altered the traditional car shopping experience, possibly for good. While some people may feel comfortable visiting a dealership in person, it’s becoming easier and more convenient to shop for a car online. Many car dealerships now include their entire inventory on their website, rather than showcasing a selection of cars. Some dealerships offer video appointments with a sales rep and will even deliver a car to your home to test drive. Credit checks, paperwork and final delivery can often take place without setting foot inside a dealership.

“People are spending more time researching and viewing cars online,” explains Bill Gandolfo, Consumer Lending Manager for Automobile at Commerce Bank. “Today’s car shoppers are more knowledgeable and better prepared because they’re doing research in advance and even getting prequalified earlier,” he adds.

Websites like Kelly Blue Book, Edmunds and Consumer Reports make it fast and convenient to research both new and used cars. For instance, you can search for cars within a price range, and compare features, availability, customer reviews and costs — even find out what people in your area are paying for the car you want.

There has also been an increase in direct-to-consumer car buying, through companies like Carvana and Tesla. “Customers are also choosing cars in advance — down to the style and color — with the expectation that the car will be in stock and ready for them to purchase and drive away,” explains Gandolfo.

What should I consider before buying a car?

Start by thinking about the qualities in a car that matter the most to you, like safety features, size or a car that you can comfortably afford. If you’re comparing new versus used, keep in mind that new cars are more expensive and depreciate faster, but they come with better warranties, the latest safety features and the ability to customize to your specific wants and needs.

Buying a used car might seem like a smart way to save money, but you could potentially face higher maintenance and repair bills. Gandolfo notes that certified preowned cars that come with good warranties may be a smart option if you’re looking for a reliable used car.

How much does it really cost to own a car?

While the car’s purchase price is likely your largest expense, it’s important to consider the total cost of owning a car so you can make the best decision for your budget. For instance, consider factors like a down payment, monthly loan payments, taxes, registration fees, insurance, gas, maintenance and repairs.

Can an electric car help me save money?

If you’re considering an electric vehicle (EV), the good news is that there are more options available than ever before. But consider the pros and cons to determine if an EV is right for you. EVs are quieter and more environmentally friendly than gas-powered cars. They’re also cheaper to fuel, have fewer maintenance requirements (therefore lower costs), and may have tax incentives.

But consider your driving habits, too. You’ll need to have access to charging stations if you’re away from home, and some EVs can take a full night to charge versus a few minutes to fill a gas tank.

Should you buy or lease?

Leasing a car may sound appealing because the monthly payments are usually lower, and you’re driving a newer model car that’s covered by the manufacturer’s warranty. But you won’t be paying towards an asset, and you may face mileage restrictions. Consider your driving habits, transportation needs and your budget to determine if buying or leasing makes the most sense for you.

What’s the best way to finance a car?

Financing a new or used car can be done through a direct lender, like your bank, or through the dealership when you purchase the car. Comparing financing options before you start car shopping can put you in a better bargaining position upfront, potentially saving you money over the life of your loan.

Gandolfo recommends getting preapproved for a car loan before you start shopping so you know what price range you can afford. “Going into a dealership without preapproval can add a lot of pressure, forcing you to make decisions without doing your homework,” he explains.

Tips for saving money on a car purchase.

In addition to reviewing your budget to determine how much car you can afford, consider these factors to get the most out of your car and car loan.

  • Check your credit report before applying for a car loan. A stronger credit score gives you access to lower interest rates.
  • Keep your car loan terms as short as you realistically can, based on your budget. Try to avoid financing with terms longer than seven years, which could potentially put you upside down on your loan.
  • Don’t be afraid to negotiate with the seller or dealer on factors like trade-in value or optional features, like window tinting or alarm systems.
  • Look for a reliable car to help minimize excessive repair bills down the road. Pay attention to factors like the car’s potential cost of maintenance and repairs over time.

Buying a car is a major investment. Before taking possession of your next vehicle, it’s a good idea to educate yourself so you can make the best decision for your transportation needs and for your finances. For more information about car loans for new and used cars, as well as car financing options, contact us.


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