Facing a decline in business due to mass unemployment and social distancing, auto manufacturers and car dealers are offering attractive incentives to buy a new set of wheels. Chevrolet, for example, is offering 0% financing for 84 months plus...

Facing a decline in business due to mass unemployment and social distancing, auto manufacturers and car dealers are offering attractive incentives to buy a new set of wheels.

Chevrolet, for example, is offering 0% financing for 84 months plus no payments for 120 days for qualified buyers who purchase select models. Ford is offering six months of payment relief — three months of those payments are deferred and the other three are simply forgiven.

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Many other dealers have similar promotions. Some are also providing significant cash allowances to lower prices.

Social distancing orders have also changed the car buying process. Buyers are able to purchase vehicles completely online and have the cars delivered, so they never have to physically visit a dealership.

These deals may have you asking yourself, “Is it a good time to buy a car?” 

We asked some experts, who agreed: You should rely less on what the auto industry is offering and more on what your individual financial situation dictates.

“Low interest rates come and go,” said Pamela Capalad, a New York-based certified financial planner and founder of Brunch and Budget. “The main thing to ask yourself is, ‘Was I going to do this anyway?’” 

Buying a car just to get a good deal when it wasn’t in your plans or doesn’t make sense financially is not a good reason, she said.

Before buying a car, it’s important to analyze your finances to determine if you could still afford the car payments and other related car-ownership expenses if you were to lose your job and be out of work for a few months.

“If you’re unsure about your job security in any way, now might not be the time,” Capalad said.

While having adequate savings is always a good financial move, it’s especially important in these uncertain times. You should make sure your car purchase won’t drain the money you’ve set aside for your emergency fund.

“[An emergency fund] is so key right now,” said Ann James, a Las Vegas-based accredited financial counselor and founder of Financial Freedom Battles Buddies.

While the general recommendation is to have a minimum of three to six months of living expenses in an emergency fund, she said you may want that amount to be higher based on your personal situation.

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Before shopping around for a car, you should have a very clear idea of how much you can afford, factoring in all the extra costs like insurance, registration, maintenance, parking and more. You don’t want to fall in love with a car that’s out of your price range, Capalad said.

Another thing you’ll want to decide about your purchase is if you want to buy or lease the vehicle.

“Some people like to have new cars every two or three years, so if that’s the situation, leasing may be a better option for you,” James said.

If you’re buying the car, James said having the cash to pay for it outright may put you in a good position to negotiate with the seller. But even if you don’t have that much saved up, buyers who are financing still have an upper hand due to market conditions.

Capalad said to ask for a lower price instead of having the dealers throw in upgrades you never would have considered before.

Asking for discounts is another tactic. Dealers commonly provide military and student discounts, but some are currently offering discounts to healthcare professionals in response to the coronavirus pandemic. 

And if you’re replacing your current vehicle, don’t forget about the trade-in value, James said.

If you are financing your vehicle purchase, you’ll want to find out your credit score prior to talking to the dealer. Your credit score will influence how much you’ll pay in interest over the life of the loan.

“Don’t go to the dealership and wait until they run your credit,” James said.

She also said not to rely on the dealer as your only option for financing. 

“I always recommend that individuals [get] a preapproval from three lenders just to have [choices],” she said.

In the end, if you determine you’re in a stable position and can afford a car and all its associated costs, feel free to take advantage of the special deals being offered now. Just don’t make decisions based off of your emotions, James said. 

“Emotions flee, and those car payments can last anywhere from three to seven years,” she said.

Nicole Dow is a senior writer at The Penny Hoarder.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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