Published July 12, 2023 • 3 Min Read
If you’re in the market for a new vehicle, with so many options and factors to consider, making an informed decision is essential. Whether you’re a first-time buyer or looking to upgrade, a little preparation can go a long way toward finding your dream vehicle — and reducing any stress during your search.
Budget: What can you afford?
Before you start your search, it’s important to set your budget to know what you can afford. Remember to factor in not only the upfront cost but also ongoing expenses like fuel, insurance, maintenance, and monthly payments if you plan to finance.
Then, look at different payment options — will you need an auto loan, or do you have enough saved to purchase the vehicle without financing?
If you’re in the market for a loan, be sure to research different lenders and compare interest rates and terms.
You may find it helpful to get pre-approved before going to a dealership. Getting pre-approved for an auto loan means your lender has analyzed your financial situation and provided a tentative assessment of the loan size they may be willing to give you. It does not guarantee approval, but it can help you plan your budget before you start the car-buying process.
Lifestyle: What fits your needs?
Once you’ve set your price range, you can search for an auto that fits your life. Cars aren’t one-size-fits-all, so you will have to take your lifestyle needs and personal preferences into account to find the ride that’s right for you.
Consider your commuting needs, the number of passengers you typically carry, and the driving conditions you encounter regularly. If you live in an area with harsh winters, for example, all-wheel drive might be a desirable feature. Understanding your purpose and lifestyle will help you narrow down the type of vehicle that best suits your needs.
Research: What gives you the most for your money?
Now that you know what you can afford and what suits your lifestyle, it’s time to be practical and balance your needs, wants, and financial capabilities.
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Do your research: explore various models and their price ranges. Read consumer reviews, browse car websites, and compare prices. Look for vehicles with good safety ratings.
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Test drive the cars you’re considering. Don’t neglect to get behind the wheel — it’s your chance to evaluate how the car feels, handles, and fits your driving style.
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If you’re buying a used car, get a vehicle history report to ensure you know about any past accidents or major repairs. This information will help you decide and negotiate the price if needed.
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A used car may be more cost-effective than a brand-new one; however, maintenance and repairs are usually more frequent. And since used cars generally don’t last as long as new cars, you may need to replace yours sooner.
Bottom line
Buying a car requires careful consideration, but armed with the right information, it can be an enjoyable journey. Remember to set a budget, understand your needs, research and test drive different models, check the vehicle history, and explore financing options. Considering these three key factors, you’ll be well on your way to finding the perfect vehicle that aligns with your lifestyle and budget.
RBC’s My Auto Affordability Tool can help make pre-qualification quick and easy.
Read next: 5 Steps to Finding the Right Vehicle
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
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