World crisis affects lives of many people and it is important to have right thinking and well-planned strategy if a person wants to survive. Just because various companies close and many people lose their jobs the life of the others doesn’t come to the end and people still need vehicles to take them from one place to the other.

At the same time low fuel prices should not fool you because their jumps and falls are only a matter of time. There have been talks about an upcoming price rise in 2009 which will not fall as low as the 2008 peak. It is also necessary to consider that the vehicle a person gets usually stays with him/her for five-seven years. Therefore if you are anxious about the money in your pocket, it is better to get a gas-sipper even with a $2 per gallon gasoline prices.

The Bankrate.com financial analyst, Terry Jackson, gives some helpful tips which can help those who plan to shop for an auto in 2009.

1. Work on your credit score. Unless you plan to pay a full price for a new car, you’ll need a high credit score to get better interest rate and good discounts. A little bit of additional work can help with it: pay your bills in time, make the payments higher than it states on the bill, pay off some loans and debts and don’t apply for a new credit.

2. Save enough to be able to put down 20%. The bigger the down payment is the easier it will be to pay off the car loan in the future. When a person owes less he feels more secure about the debt and it is significantly easier to get rid of it.

3. Consider using your current car for a few more years. If you own a vehicle already, it is good to keep using it till the credit score is high enough and there is plenty of money in your pocket for a down payment on a new auto.

And while using the vehicle you own, make a complete check-up and fix what need repairs. This will not only help the auto to last longer, but can increase the value of the car as well.

4. Go away from repossession as far as you can. There expected to be more auto repossessions this year than ever before. Many people lose their jobs and become unable to pay off debts, so the terrible situation of repossession becomes unavoidable for them. You need to think before this becomes a reality for you too.

The negative side here is not only the fact a person loses what he/she owns without any money back, it also hits the credit record badly and will stay there for at least five years (very often it is even longer).

If you feel like the bad times came to your life, check with the lender if it is possible to change the conditions of the agreement which will make it easier on you. Remember, nobody wants repossessions, even lenders, so it might be easy to make them change the terms.

5. Don’t use the house equity money to purchase a vehicle. While for some people it is pretty obvious the idea like this is not smart, the others want to buy a certain auto so badly they are even ready to pull the money from the home equity to pay for the car.

At the present situation the house value drops and you may end up with more debt than it is worth, so in the troubled situation you loose the house and have extra debt to pay in the future. So, don’t risk your house for the sake of some car.

6. Be realistic about your finances. It is definitely tempting to see all the nice extra features the dealerships offer, but they cost money and it is good to keep a clear mind and remember the maximum price you can afford.

More than that you should get exactly what serves your purpose: if a Ford Fusion is fine, don’t stretch to get a Mustang… It is definitely tempting, but be smarter than that.

7. Shop for used autos. There is no doubt; they are cheaper and, in some way, time-proven. While the new vehicles are cleaner and nicer, there are a lot of autos nowadays that can run to 100,000 miles and more without major repairs.

Phil Morris

posted in Car Buying