1. Decide what you can afford
Having your eye on a specific car is no help if you can't afford it. When you’re budgeting for a car, make sure you factor in all the costs to operate them, including gasoline costs, cleaning and car insurance. Use our auto loan calculator to determine your payment and total payment price.
2. Decide between new or used
Used cars have been in high demand for several years now, making prices higher overall, while there is a wider array than ever of inexpensive new cars. As a result, you may want to consider new and used cars that fit within your budget. There are trade-offs with each. Buying used means you can get a more expensive car for your money, but the trade-offs include not knowing the car's history, a shorter warranty period during your ownership and higher interest rates. Buying a new car means you'll get less car features for the same money, but you get the benefit of the full warranty and generally free maintenance and roadside assistance as well, not to mention lower interest rates.
3. Assess total cost to own
Once you have a handful of cars in mind, see if you can afford them by estimating the ownership costs for each. Do your best to calculate your gasoline usage and call your insurance agent to get a car insurance quote. You should also factor in the cost of vehicle registration and sales tax.
4. Get the best interest rate
While you may be drawn to a certain car or brand because of an ad for a low interest rate, it's of no use unless you qualify, and very few car buyers qualify for the zero-percent and low-interest-rate deals automakers offer. Stop in and see us first and see if we can pre-qualify you for your loan.
5. Don't assume dealership rate is best
Don't let your eagerness to test drive the cars that interest you find you at the dealership too soon. Dealers don't just want to sell you a car. They want to get you to sign a car loan, too. Dealers typically receive a set fee or a commission on the car loans that they coordinate, regardless of whether that loan is from the manufacturer or a local lender they work with. Also, use caution if that offer seems too good to be true based on your credit or other loan approvals you've received. Dealers will sometimes indicate they can get you a great rate to get you to sign a contract, only to gloss over the section that says the car loan rate is contingent on the loan approval.
6. Know the invoice price
Your car research should have included the invoice price for new cars or wholesale price for used cars which can be found on sites like Nada and Kelley Blue Book . The more prepared you are, the better equipped you’ll be to negotiate with the dealer.
7. Don't rush the test drive
To get the most bang for your buck, you'll want to keep your car for five years or longer, so take a thorough test drive to make sure you'll be happy for the long term. Take extra time with the car parked to adjust the seats and experiment with the controls and the car's other features. Make sure all of your typical passengers and cargo fit well and the passengers are comfortable - even if that means spending some time installing a child safety seat or putting your golf clubs in the trunk while you're in the dealer's lot. Finally, think about your life five years from now and try to imagine if this car will suit your needs then in terms of people and cargo.