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How to Buy a Car

Buying a car is a big decision, but it doesn’t have to be a big headache. Whether you’re buying your first new car or you’re just ready for an upgrade, we can walk you through the process to ensure you’ll have the best possible experience. Modern services and technologies have made car shopping easier than ever. You might be surprised by how much of the car buying process can be done right at home.

Here are some tips on how to buy a car that’s right for you:

Do Your Research

Some find it daunting, but researching your next car can be fun. Right here on Autotrader, you can search for cars, trucks, SUVs, and minivans at local dealerships and see Kelley Blue Book ratings of those dealers. You can check boxes for certain body styles (car, truck, SUV, etc.), certain features like Apple CarPlay, and of course, set limits on prices based on how much you’re willing to spend. Autotrader also has resources that include not only new car reviews, but lists and comparisons to help you narrow your search.

If you already have a good idea of what kind of car you want — even right down to a specific make and model — it’s a good idea to research different trim levels and specific features. Is upgrading to all-wheel drive worth the extra cost? Is the infotainment system compatible with your smartphone? Do you really need those massaging leather seats? These are the kind of questions you should ask when researching the finer details of your next car.

Set Your Budget

Everyone’s car budget is going to be different, which is why you need to do some math to determine yours. A good place to start is deciding whether you want to lease, take out a loan, or buy with cash.  If you buy with cash, then financing is very simple; your budget is whatever amount you’ve saved up.

If you’re leasing or buying with a loan, you need to figure out what kind of monthly payment you can afford. A good rule of thumb is to spend no more than about 15 percent of your monthly take-home pay on your car. That includes the monthly payment, fuel, insurance, maintenance, etc.

For example, if your monthly take-home household income is $5,000, then you could comfortably spend up to $750/month on your car including all other associated expenses. If you spend around $100/month on fuel and $100/month on insurance, then that’s a $550/month car payment. Remember, that’s the most you want to pay. There’s nothing wrong with being well under that number if you want to keep more of your income.

When you have an estimate f your monthly payment,  try out our Car Loan Payment Calculator. Using this tool, you can plug in numbers like the price of the car you have in mind, an estimated interest rate, a down payment, and the trade-in value of your current car. From there, you can determine what kind of monthly payment you can expect based on  the price of the car you have your eye on. There’s also an Affordability Calculator where you start with your preferred monthly payment to determine which price range is best suited to your budget.

The process of figuring out  a lease payment is quite similar. One of the main differences is that the amount due at signing is usually already set in a lease deal and is less flexible than a down payment for a loan.

Consider Incentives

Sometimes a great deal can help you find a nicer car than you thought you’d be able to afford. Automakers run incentives on their vehicles all the time, some of which are more generous than others. For financing, leasing, and even cash buyers, there are discounts, rebates, and lease/finance deals that may fit your taste and your budget.

Every month, Autotrader compiles the best car deals, best truck deals, and best SUV deals to help you find the best price possible on your next ride. This part of car research is often skipped by shoppers, so make sure you take a look at what deals are available now and see how much you can save. From zero-interest financing to affordable lease payments to “cash on the hood,” some of these deals are too good to pass up.

Get Pre-Approved For Financing (If Applicable)

Unless you’re buying your car with cash, you’re going to want to get pre-approved for financing. This is another step that you can do from your couch without needing to visit a dealership or a bank. Not only can you get a pre-approved loan with personalized financing options, but it won’t impact your credit score. That’s good news since you’ll want a strong credit score in order to get a low-interest rate. Once you’re pre-approved, you can shop around with different lenders to see where you can get the best interest rate.

Get pre-qualified, build your deal, and save time at the dealership with Autotrader.

Find the Trade-In Value For Your Current Car

If you’re trading in your current car, determining its value can save you some serious coin on your next ride. Your car is like a down payment on wheels, especially if it’s relatively modern, has reasonable mileage, and is in good condition. Trading in at the dealer can save you the hassle of selling your car yourself. However, you will almost always get more money for your car by selling it privately, which we can help you with here on Autotrader.

Through our friends at Kelley Blue Book, you can not only get a good idea of what to expect for the trade-in value of your car, but you can get an instant cash offer as well. All you need to get started is your VIN or your license number.

Take a Test-Drive (Or Two)

Once you’ve narrowed your search to a small selection of candidates for your next car, truck, or SUV and you’ve been pre-approved for financing, then it’s time to visit the dealership. While much of the car-buying process can be done online, there’s still no substitute for looking at cars in person, sitting in them, and taking them for a drive before making your decision.

Whatever you do, don’t feel rushed or pressured by the sales staff to make a deal before you’re ready. Ask to see different models, different trims, even different paint colors if that’s important to you. If you want to sleep on it or look at some other options at another dealer, don’t be afraid to tell that to your salesperson. The more you explore your options, the more confident you’ll be that you’re getting the right car.

Make the Deal

You’ve done the research, set your budget, got pre-approved, and test drove everything until you thought your salesperson would kick you out of the dealership. Now it’s finally time to make the deal. If your loan is pre-approved (don’t forget to ask if the dealer can beat your rate) the paperwork at the dealership will be pretty painless. Be sure to carefully read the documents and don’t be afraid to ask about any additional fees or charges.This is normally the part that shoppers stress out over the most, but if you’re diligent in your homework,  you’ll be able to buy with confidence, 

Enjoy Your New Ride

Congratulations on your new car! Now it’s time to enjoy your new ride. Keep it clean, keep it properly maintained, and drive safely.

Our editors are here to make car buying easier. We’ve driven, reviewed and compared thousands of cars. We’ve bought and sold more than our fair share, too. And as part of the sprawling Cox Automotive group of companies, we have exclusive access to a range of valuable data and insights. Whether you’re looking for the best car, the best deal or the best buying advice, you can trust... Read More about Autotrader

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  1. Yes Josh this is true. When I look for a late model Pickup. I check the Dealers first. Always buy the vehicle you are looking at from the Auto makers dealership. Dodge to Dodge Ford to Ford Chevy to Chevy. Then ask the business Rep. who they use for extended warranty. Use the one they recommend. If you have a problem they will take care of it through the company they recommend. Make sure you know what the coverage’s are and the deductible and go from there.

  2. dealership costs more. buying directly from the owners of the vehicles costs less you save two to three thousand dollars. . instead after locating the car take it to your mechanic to inspect the car buying making the deal.

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