Five Tips for Buying a New Car

If you’re in the market for a new car, you probably want to make sure you get the best deal possible. In order to make sure you get the car you want at the best possible price, just follow these five tips:

1. Do lots of online research first. Once you have narrowed your choices down to a few makes and models, check online to find out what those makes and models are actually selling for in your area. Check to see which features come standard in the car you’re considering, and make a list of added features you know you want. (Making a list of features you want ahead of time will help keep you from getting sucked into adding on additional features you don’t want or need.)
2. Make sure you can comfortably afford the make and model of your choice. Once you find out what the car you want is typically selling for, then start your calculations. Figure in your down payment and your interest rate and calculate what your monthly payment is likely to be. Don’t forget to factor in insurance (since insurance is higher for certain makes and models) and the cost of upkeep and repairs. If you figure out exactly what you can afford ahead of time, you’re less likely to get talked into buying a vehicle at a price that’s a stretch for your budget.
3. Apply for financing online or at your bank or credit union. By applying for credit auto financing before you go to the dealership, you’re more likely to get a lower rate and less likely to be talked into stretching out the length of your loan to four or five years which, while it makes your monthly payment lower, means you end up paying a lot more over the life of the loan than if you got a loan for two or three years. If you deal with the loan ahead of time and get pre-approved, it also means you can walk into the dealership with confidence, knowing you can buy the car you want (with no nail-biting wait for approval.) You should also make sure you’re familiar with auto financing terminology.
4. When you go to the dealership, talk to the dealer in terms of total price of the car — not how much your monthly payment will be. Talking in terms of monthly payments rather than total price is one way dealers tend to muddy the waters and keep the customer confused and thus at a disadvantage. When you’re negotiating, find out what the dealer actually paid for the car, as well as finding out the manufacturer’s suggested retail price (MSRP.)
5. Be willing to walk away. If you don’t like how you’re being treated or if the dealer is being pushy or aggressive, you should consider leaving and going to a different dealership. A car is a huge purchase, and you should feel confident and in-control during the negotiations. Remember, the dealer really wants you to buy that car, so you have the upper hand.