What Should You Know Before Buying a House or Car?

Buying a car or a home can feel overwhelming. There are so many options, plus paperwork, agents and negotiating. These tips can help you make your next big purchase with more peace of mind.

What should you know before buying a car?

1. Know your credit

Your credit is a big factor when you buy a car. It affects your loan options and your interest rate, and in some cases whether you can get financing at all.

You can get free copies of your credit reports from the three major credit bureaus at AnnualCreditReport.com. Knowing where you stand helps you choose a car and negotiate at the dealership.

Strong credit gives you more room to negotiate. With lower credit, interest rates are often higher, so it pays to know before you go.

2. Set your budget and financing early

Look at sticker prices ahead of time and figure out what down payment you can manage and what monthly payment you're aiming for. This helps you plan your money and keep your expectations realistic. Buying a car outside your price range can hurt your credit and put stress on your other bills.

3. Compare prices at several dealers

Different dealers often charge different prices for the same car. Visit several, talk to the sales agents and ask for their best offer. Then use that information, along with your credit, to see what your financing could look like over the length of the loan.

4. Check the vehicle history report

If you're buying used, whether from a dealer or a private seller, always ask for the vehicle history report. It shows past accidents and other records, and it helps you decide if the car is worth the price.

5. Take a test drive

It sounds simple, but it matters. From the driver's seat you can tell how balanced the car feels, whether the engine runs smoothly, if anything shakes or rattles at higher speeds and how the brakes respond.

What should you know before buying a home?

A home usually costs much more than a car and comes with more paperwork, agent fees, property taxes and sometimes an HOA. These tips can help you get started.

1. Find a trusted real estate agent

A good buyer's agent works for your side of the deal. They can help you understand the market, decide when to buy and keep the process running smoothly.

2. Think about your future

Do you plan to have kids, change jobs or move in a few years? Keep that in mind. If you sell your first home soon after buying, you may not have built much equity yet, which can make your next purchase harder.

3. Look at your current debts

Car payments, student loans and other bills all add up. Make sure you can handle a mortgage on top of them. It's also smart to have an emergency fund in case you lose your job or the housing market drops. Falling behind on payments can put your home at risk.

4. Check your credit

Your credit matters even more for a home than for a car because of how much you're borrowing. Lenders will look closely at your credit, your income and your other payments.

5. Keep your must-have list short

The longer your list, the harder and more expensive your search gets. Stick to two or three true must-haves and remember that many changes, like updating the look of a room, can be made later. This likely won't be your last home.

Don't forget insurance

Insurance is part of the cost of owning a car or a home. Get quotes before you buy so you know what to plan for in your monthly budget.

How A-MAX can help

Shopping for a car or a home? Walk into one of our 240+ offices in Texas, California and Arizona, or call 1-800-921-AMAX for auto, home or renters insurance quotes in English or Spanish.