SENIOR FINANCE: BUYING YOUR NEXT VEHICLE

Jul 16th, 2012 | By Sharon Shaw Elrod MSW EdD | Category: Senior Finances

More Ways to Save Money

Seniors looking to buy a new car might be interested in finding some ways to spend less for the vehicle. What kind of auto are you interested in?  Should you buy or lease?  How do you know if you’re getting the best deal available?

Here are some tips to consider when you begin the process of purchasing your next car:

  • Buy from a dealer you already know.  Some friends only buy Toyotas.  They have them serviced at one location.  They know the dealership.  They know the service department.  They are valued customers and believe they get the best price on a vehicle from the dealership they trust.
  • Compare vehicle prices.  If you do not fall in the first category (above), you might want to get prices from two or more dealerships.  Be sure you compare ‘apples’ to ‘apples’.  That is, write down the features you want in the vehicle, and then request a bid from the dealerships you have chosen to do business with.  That way you can be sure you are accurately comparing prices.  It doesn’t hurt to let them know you are getting several bids.
  • Compare cost of leasing versus buying.  Again, write down all the costs of both, including taxes, buy-out at the end of the lease, trade-in value and loss of investment interest.  That last one is interesting.  If you take money out of your investments to buy a car and pay one big lump sum for it, you are losing the interest on that money over the term of a leased vehicle, had you chosen to lease instead of buy.  For many seniors, buying vs leasing is decided by their budget:  it may be easier to pay smaller amounts monthly than to take a chunk out of investments.
  • Buy or lease the car you can afford. For example, you may want the Lexus, but a lower priced Toyota will provide many of the same features at less cost. You may have to forgo satisfying your ego with a less flashy vehicle.

If you are concerned about being taken advantage of because you are a senior, take a younger friend or family member with you when you look for your next vehicle.  Don’t risk being a pawn of an unscrupulous car salesman.  Buying or leasing a vehicle involves an investment of a considerable sum of money. Seniors need to exercise caution during the process.



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