Consumer Watch: Do these three things before buying a car
OKLAHOMA CITY (KOKH) —
Whether you are going used or new, car shoppers everywhere are still making some major errors.
Most people want the car they've fallen in love with, over the one they can afford, and that can run you into some major budget problems. An Oklahoma financial education expert explains the big three things to think about before setting your sights on a new ride.
Buying a nice new car could have you feeling like you made it in life, but car payments could be a crushing blow to your finances. Mistake number one is not knowing how much you should be spending. Instead of shopping for a car first, you should look for a loan from your financial institution first.
“At WEOKIE Federal Credit Union, our members come in, they come in do an application, and they are pre-approved for a certain amount,” says Tabatha Thurman, a financial education specialist with WEOKIE Federal Credit Union.
This means you'll know how much you are approved for, what the interest rate will be, and how long the loan would take to pay off.
If you are happy with the numbers, then you start the hunt, but don't buy anything until you call your insurance agent first, to make sure you can afford that monthly payment.
“You think, oh, it is a brand new car, it has all these safety features, your premium is going to be cheap -- that is obviously not the case. So, call your insurance agent before you pick your car. They just need a year, make, and model, and they can give you a good premium cost,” says Thurman.
Next up, be sure you aren't forgetting about the cost of the tax, title, and license because this could be a thousand dollars or more. Thurman does not recommend financing this cost, that is because you will end up paying hundreds more in interest for this debt alone.