Thinking about buying a new car? Not sure if you’re going about it the right way? Have no fear: Our latest list includes nine steps every buyer should take before signing the papers.
1. Read Reviews
Choosing the right car can be difficult, and it’s even more complicated when you’re thinking about interest rates, monthly payments, color choices and options. That’s why you should begin to narrow down your choices before you even set foot in a dealership, even before you look for financing.
The best way to do this often involves reading reviews from experts, who can help you eliminate mediocre cars and focus on the best ones. You should also talk to friends and family to find out their views on various cars. Interested in a Honda Civic, for example? Ask a friend who owns one.
2. Figure Out What Your Trade-In Is Worth
If you’re trading in your current car, this is an important step. Because you want to be armed with as much knowledge as possible before setting foot in a dealership, you’ll want to know what your trade-in is worth before a dealer ever makes you an offer on it. To do this, we highly recommend using Kelley Blue Book’s website (kbb.com). We also recommend searching AutoTrader to find asking prices on cars that are comparable to yours. But remember, since you’ll be trading in your car, don’t expect the dealer to offer you its full retail value.
3. Figure Out What You Can Afford
Once you’ve decided on a few cars worth considering, it’s time to find out what you can afford. If you’re interested in financing or leasing your next car, this means you need to figure out what monthly payment is acceptable without breaking the bank. Different shoppers have different strategies for budgeting car payments, and we certainly wouldn’t want to impose our own, but we strongly suggest creating a budget before heading to the dealership or the bank.
4. Secure Financing
The next step in the process is to secure financing, and we wouldn’t suggest waiting until you’re at the dealership to do it. Trying to negotiate a car’s price while simultaneously working out an interest rate and loan terms can be very time-consuming, and the dealer knows that the more time you spend on a car, the less likely you are to walk away.
Securing financing beforehand — from a bank or credit union, for example — gives you more power in the negotiating process. It also lets you know where your credit stands before you visit a dealership. Remember that if you secure financing before visiting a dealership, you should get a little extra money to pay taxes and fees often associated with a car purchase. Otherwise, you could be stuck paying those sometimes-costly items after the purchase.
5. Find The Cars You Want
The next step may seem simple, but it’s more crucial than you might think. In fact, this is some of the most important advice we can give you: Don’t just find one car you want. After you’ve read reviews and set a budget, visit AutoTrader’s listings and find several cars available locally. That way, you’ll have several backup choices if your original plan falls through. Additionally, you’ll have some other options if you have a bad experience at one dealership, or if a few cars are sold to other customers before you’re able to check them out.
6. Take a Thorough Test Drive
For many shoppers, this step is possibly the most important of them all. Unless you have a lot of experience with the make and model of car you’re considering, don’t just settle for a short 5- or 10-minute test drive around the block. Take a long, thorough drive, no matter how persistent the salesperson is that a shorter route is better. Remember that you’re the one buying the car, and it’s a huge purchase. As a result, you shouldn’t feel rushed into any part of the decision. If you do feel rushed, it might be a sign to consider one of the other cars you’ve selected.
Beyond a test drive, shoppers interested in a used car might want a mechanical inspection. While this is often not necessary for certified pre-owned cars sold with a manufacturer-backed warranty, mechanical inspections can be money well spent for drivers interested in used cars with no warranty. At this point, we also suggest that you ask the dealership for a Carfax or AutoCheck vehicle history report to find out whether the car has been in an accident or suffers from any other issues.
7. Negotiate a Lower Price
It’s very rarely true that the dealership is advertising its best price. Usually, car dealers advertise one price, but they’re willing to come down from that figure if shoppers negotiate. This is especially true on a sales close, which is almost always the last day of the month.
When it comes to negotiating, don’t be a jerk. Be firm, but remember that this is a business transaction, and it’s not personal if the dealer doesn’t meet your price. Still, we strongly suggest that you don’t agree to any figure you aren’t comfortable with. Since you have your financing in order and a long list of other cars to consider, you can always walk out the door at any time. That gives you the ultimate bargaining chip in the world of car sales.
8. Thoroughly Read the Buyer’s Order
Before you agree to any transaction, read over the buyer’s order. This is a document that lists the price of every single thing on the vehicle, from its base cost to dealer fees and taxes. If you have any questions, be sure to ask the dealer about everything before signing the order. This includes items like documentation fees and taxes. If you aren’t sure what an item is, now’s the time to ask, and if anything makes you uncomfortable, this is your last chance to back out.
Around this time, dealers will also offer to sell you various automotive add-ons, such as tire warranties, alloy wheels or alarm systems. We suggest that you be very careful here, as these items can become expensive quickly, and they can increase your monthly payment.
9. Enjoy Your New Car
If you follow our advice, the process of buying a new car doesn’t have to be so intimidating. Sure, it’s a lot to keep in mind, but don’t let all that stop you from enjoying your new car as you drive it off the lot for the first time.
I totally agree with the buying guide and echo the comments. I just walked in from looking at a georgous 04 corvette on line , of course that was based on the photos. After carefully inspecting the car and reviewing the car fax there were several issues that I noticed, paint blemishes, serious oxidation on the wheels, the enging was replaced and although and pointed out the concerns. I felt that I was being rushed and as professionals salespersons they turned the coversation away from my concerns as minor problems for a 16 year old vehicle. As bad as I felt, i walked away, and I am glad I did. There could have been more issues that I did not visually see. My recommendation to potential used car buyers, look the car over carefully, get a professional mechanic to inspect the vehicle, try to get it on a lift, review the car fax and DONT BE IN A RUSH. There are tons of cars out there.Good Luck
For me the utmost bit of advice is FIND OUT WHO OWNS THE CAR YOU WANT TO BUY. I know of someone who paid 30,000 dollars for a truck that had a phony title. You must find out if there’s a lien on the car you are looking at. You must make sure you are looking at a legitimate title and never buy a car without looking at the physical title. If you do buy one without the title you may be in for a big surprise.
For me the utmost bit of advice is FIND OUT WHO OWNS THE CAR YOU WANT TO BUY. I know of someone who paid 30,000 dollars for a truck that had a phony title. You must find out if there’s a lien on the car you are looking at. You must make sure you are looking at a legitimate title and never buy a car without looking at the physical title. If you do buy one without the title you may be in for a big surprise.
For me the utmost bit of advice is FIND OUT WHO OWNS THE CAR YOU WANT TO BUY. I know of someone who paid 30,000 dollars for a truck that had a phony title. You must find out if there’s a lien on the car you are looking at. You must make sure you are looking at a legitimate title and never buy a car without looking at the physical title. If you do buy one without the title you may be in for a big surprise.
For me the utmost bit of advice is FIND OUT WHO OWNS THE CAR YOU WANT TO BUY. I know of someone who paid 30,000 dollars for a truck that had a phony title. You must find out if there’s a lien on the car you are looking at. You must make sure you are looking at a legitimate title and never buy a car without looking at the physical title. If you do buy one without the title you may be in for a big surprise.
My strategy is simple. I don’t ever buy (or sell) a car when I have to, but rather only when I want to. It allows me the leverage to really negotiate and to also walk away with confidence. When you NEED a car, you are more likely to get screwed.
Also be careful with finance.Finance will pull your credit from various lenders.You,as a consumer have a 14 day window to shop around.With only 1 hard pull on your credit report.However I have seen 5 hard pulls while shopping for a vehicle.Best bet go in pre qualified.
Great tips! A lot of people are lost when it comes to what to do when buying a car, so this will be good info to share! It’s also good to get a vehicle history report from a site like LemonChecks.com too.
on a new car, dealers are asking buyers to pay destination charge and dealer fee, I know the destination charge in mandatory, however would you pay the dealer fee as well please advise?
Destination charge is the one you pay on the window sticker. If they won’t drop the fee back down to what the OE said it is demand them drop it down or walk.
Another tip not on the list I’d suggest is the pay yourself forward option if you can plan ahead. 1) set up a vehicle savings account (AMX has a high yield personal savings account with a 2.1% return on assets) or another bank of your choice and 2) have however much you think you can can afford for a monthly car payment added to your payroll as a direct deposit amount right off the top of your paycheck. Depending on how long ahead you are planning, that will help ensure that you were not overly optimistic about what you can afford monthly but it will also help you raise a hefty down payment if you can wait and if you are planning for the very long run, it opens up the chance to car shop without needing any financing at all. Rather than paying a bank 3.5% or more on your loan, consider delaying gratification and flipping the script so you earning a little bit of interest on your money for a change. (obviously a high yield savings account might not be enough to offset inflation, BUT it’s safe and doesn’t lock your cash up like a CD would) Regardless of your budget, this should work well and once you buy your car, reduce the automatic deposit amount down by as much as you need too but consider keeping some money flowing into the high yield savings account as an emergency repair fund or just roll it forward for your future vehicle needs. Obviously many of need financing, but this will help you keep debt down and allows you more purchase/negotiation power to get the vehicle you want.
The biggest and best piece of advice I can give people shopping for a vehicle is DO NOT be afraid to walk away. Do not get emotional over finding the vehicle you want and make a poor decision. It seems that if you walk away from a car deal happy, that is more important emotionally than walking away with exactly what you want unhappily. Don’t let them rush you into a poor decision. I prefer to go in in the morning before lunch, that way I can take lunch to think about it and not be rushed. Remember, at the end of the day it is a business transaction and a very big one, so walk way happy with what you paid for what you got. If they can’t meet your reasonable needs, thank them and walk away.
The only way I can do #4 before hand is if I have a copy of the price agreement with the vehicle I’m looking for from the dealership.
That isn’t my experience… my bank allows me to pick an amount for financing and then finalize the exact vehicle and dealership later. It might be different for some based on credit score, but check with whomever you bank with first and then a credit union if you don’t like their rates and think you can do better.
thax.s great info.
used car buying and cash purchases are not included.These types of deals are most important to following through with a mechanic far enough away from the dealer As to lower the chances that they know each other. Save yourself headaches and get it checked out by a mechanic, even if they charge you a nominal amount it is well worth it. Finding burnt transmission fluid saved me from a big mistake.
Not everyone has time or the extra money or a willing dealership to go to a mechanic to get a second opinion. So I go with reviews of the dealership.
Too vague when it comes to checking out a used car.