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Buying A New Car
Buying a new car can be a daunting process. Making such a large financial commitment - with so many choices available and so many factors to consider - can leave people feeling overwhelmed. Better Business Bureau of Minnesota and North Dakota offers some tips to help consumers navigate this major purchase:
-Determine your budget. This sounds straightforward, but there's more to budgeting a new car purchase than just the monthly payment itself:
-How much gas will the car use? Remember that your results may vary from EPA mileage estimates. The website is a good resource for 'real-world' mileage data reported by car owners.
-How much will insurance cost on the vehicle? Contact your auto insurance agent for quotes on various models you may be considering.
-How much will maintenance and repairs cost? Online reliability reports can give you a sense of which models are more expensive to repair.
-When considering monthly payments, use online payment calculators to see how different rates, down payments and loan terms can impact your payment.
-Don't become so focused on the monthly payment that you lose sight of the purchase price, or total cost over the term of the loan. Extending the term of a loan from 60 months to 72 months in the name of a lower monthly payment can mean paying thousands extra over the life of the loan.
-Explore financing options. Visit your local credit union or bank to see what interest rate they can offer on a loan, and then consider getting pre-approved. Having this information (or offer) in hand will allow you to decide whether dealer financing is a better option, and gives the dealer a 'target' to match or beat.
-Perform your research before you visit a dealership. Websites such as provide free information on what you can expect to pay for a particular model in your region, and can help you determine the value of your trade-in. Visit to obtain reports on individual dealerships and see how they have responded to any complaints.
-Comparison shop online. You can get a price quote on a vehicle from most dealerships in a matter of hours, and then compare competing quotes. A great time-saver!
-Take it for a spin. Some consumers feel pressured by face-to-face sales, but you need to test drive a vehicle before buying it. Tell the dealer that you are there for a test drive only, and will make a decision on a purchase later. Don't be rushed.
-Look for rebates. Many rebates are available to all consumers, but some carry eligibility requirements that should be disclosed in advertising - loyalty bonuses, active duty military, trade-in bonuses, etc. Make sure you understand these qualifications to avoid disappointment later.
-Understand leasing options. If you decide to lease a vehicle, make sure you're clear on the terms of the lease, and the pros and cons versus purchasing. Leasing can mean driving a nicer car at a lower monthly payment than might be possible with a purchase, but if you drive more than about 12,000 miles a year or are concerned about "excess wear and tear" charges, leasing may not be the best option.
-What's the bottom line? When looking at the price of a vehicle, remember that you will also pay fees for documentation (capped at $75 in Minnesota), title and registration, along with applicable sales tax. BBB regularly receives complaints from consumers with "buyer's remorse." Buying a car is a big decision. Be sure to do your research; visit the dealership for a test drive, and take time to think things over carefully before making a purchase. For more information, contact BBB at 1-800-646-6222 or visit

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