1. Set your budget
Start by selecting if you want to buy your new car outright, obtain a loan, or lease it.
Paying cash makes budgeting quite easy, but don't blow through all of your savings. Also keep in mind that you'll need to pay for registration, insurance, and sales tax.
Taking out an auto loan is the most typical choice, but do your homework on financing in advance to ensure you obtain the best terms when negotiating. Calculate your monthly payment with a car payment calculator.
Here is some advice for getting financing:
- Verify your credit rating. If you need to improve your credit, you might want to hold off until you can obtain financing with reasonable terms.
- Apply to get preapproved for an auto loan if your credit score appears to be good. Take the loan if the dealer can match the rate and terms, but give them something to match.
- Choose the loan period with the shortest interest rate that you can manage.
2. Identify your car’s must-have features
The exciting part now is choosing the ideal car for you. Here are some insightful queries to consider:
How do you plan to use your car? If you have a family, for instance, you'll need enough space for everyone and lots of cargo capacity.
What’s on your list of must-have features? Maybe you want heated seats, a sunroof, or remote starting. Make sure to search for that as well. Check the Insurance Institute for Highway Safety for crash test ratings if safety is your primary priority.
Find models that fit your requirements when you've established them. You may discover a car finder tool on several automotive websites and car-buying apps, together with thorough rankings and research recommendations, to assist you choose the best prospects. Filter your search based on your available funds and the features you want. Choose three to five target models that you want to learn more about in depth.
3. Check reliability and ownership costs
Models should be chosen for both their durability and inexpensive cost of ownership. Resources like J.D. Power and Consumer Reports, which solicit owner maintenance records and assign reliability ratings to vehicles, could be beneficial. Verify each model's total cost of ownership. Some cars are inexpensive to purchase, but they end up costing much more in the long run due to depreciation, insurance, upkeep, and repairs. To estimate these costs, use calculators like the Kelley Blue Book Five-Year Cost to Own or Consumer Reports' Cost of Vehicle Ownership. Sometimes it makes more sense to spend more up front for a car than to take a chance on future maintenance expenditures that will be high.
4. Locate and test drive the car
It's time to see the results of your selections. To get a clear sense of the various models, it's crucial to test drive every automobile you're considering. It would be best if you did these things quickly after one another so you could compare your impressions. Set up a morning or an afternoon to complete the process, preferably around the middle of the week when dealerships are less busy. Make an appointment over the phone. In this manner, the appropriate model will be retrieved and ready to use. Choose a test-drive route with a variety of terrain, including hills, uneven pavement, curves, and even a section of highway. It could be challenging to find what you want on the lot due to the lack of new cars. Dealership inventory can be found online, or you can use a website or app that enables you easily browse several dealerships at once. One of the vehicles you examined might have satisfied your requirements, but it wasn't the ideal color or had the wrong set of features. If there aren't any nearby options, try expanding your search area using a website that allows you to browse cars, such as Autolist or Autotrader, to include an entire region or perhaps the whole country.
5. Find the right price
You can quickly learn what others in your region are paying for the automobile you want by consulting pricing guides like Kelley Blue Book and Edmunds. Simply enter the desired car options on any company's website to view prices; in some situations, you may even enter the desired color because every element might effect the cost of the vehicle. Check to see if there are any incentives or rebates offered for the automobile you want. Current offers are often listed on manufacturer websites and typically vary every month.
6. Get dealer quotes
Negotiating can be made less stressful by requesting dealer quotations via email. You can email the dealership to obtain a price estimate, or you can use a third-party service like TrueCar to rapidly get pricing quotes from several dealerships. Assess the difference between the seller's asking price and the median market price you calculated using the pricing guides. There's a good chance that the seller is asking for more than the going rate. Here are some pointers to utilize on the car lot if you decide to bargain face-to-face:
Don’t be a monthly payment buyer. You will be treated as a cash buyer if your loan has been preapproved. Instead of negotiating the size of the monthly payment, talk about the car's price.
Be unpredictable. Avoid letting a salesperson lock you in a sales office while he "goes to talk with his boss." Instead, take a stroll through the showroom or buy a coffee.
Negotiate slowly and repeat the numbers you hear. Go slowly and even jot down the statistics that are presented to you because it is simple to become confused. If you're discussing the "out-the-door" price, which includes all taxes and fees, or just the car's sale price, be sure to clarify.
Ask about fees before saying yes to a deal. Some dealers could add fictitious charges to make up for the earnings they lose during negotiations. Before committing to any agreement, request a breakdown of any additional costs.
Be ready to walk. Simply leave the meeting if you feel like you aren't moving the deal forward or you don't like how you are being treated. No need to say farewell.
7. Maximize trade-in value
Make sure you're receiving the best price for your car if you have one to trade in. You can estimate the value of your car using an online pricing guide's appraisal function. Fill out every field completely because some features and options may increase the value. The following are some words you might run into:
Trade-in value: The amount you would get for trading in the car.
Private-party value: What would you get if you tried to sell the car yourself.
Dealer-retail value: How much the dealer will attempt to get for the car.
Even if you decide not to buy a car from the site, they will still make you an instant offer for your car that is good for a few days. This is another way to sell your automobile online. You'll be in a stronger negotiation position at the dealership if you have that as a point of comparison. The better offer is always an option if the dealer declines to match the offer.
8. Seal the deal
Ask to have the automobile delivered to you rather than picking it up at the dealership if you're negotiating over the phone or via email. It’s quick and stress-free. The majority of individuals still go in person to sign documents, albeit not all dealerships provide this option. Even if you have been preapproved for a loan, the finance manager at the dealership could offer to improve the loan's terms. To check if they can secure a lower interest rate for you doesn't hurt. Ensure that the loan's other conditions are all the same. The finance manager might make an effort to upsell you before the contract is drafted. At the proper price, an extended auto warranty might provide you peace of mind. But first, make sure you are familiar with the details of the warranty that came with your new car.
Along with a powertrain guarantee that normally lasts up to 60,000 miles, most new automobiles come with a bumper-to-bumper warranty that lasts at least three years and 36,000 miles. The engine, transmission, and suspension are just a few examples of the components that the powertrain warranty covers. Take your time reading the contract, and resist the urge to sign it quickly to get it over with. The agreed upon sales price and the following additional amounts shall be set forth in the contract:
State sales tax. Based on your city and county, this percentage of the car's price may change.
Documentation fee. The dealership really costs you for filling out the contract, as absurd as it may sound. In other states, this "doc fee" is limited. Some dealerships in places like Florida charge up to $700 in doc fees.
Registration fees. Conveniently, a dealer has the capacity to register the vehicle on your behalf.
Dealerships could charge extra fees, some of which might be false. Knowing what is genuine and what is added merely to increase their profit is difficult. Ask to have a fee eliminated if the dealer's finance manager is unable to satisfactorily explain it in the contract.
