5 Important Things to Know When Buying a New Car


The decision to buy a new car is not one to make lightly. Unless your bank account is overflowing, a new car purchase is a very big deal and should be treated as such. This does not mean simply walking onto the new car lot and driving away in your new ride. It means careful research, knowing how to comparison shop, and learning more about your best options for financing.

If a new car is on your horizon, learn more about how to get the best possible deal with these helpful tips.

1. Learn More About Your Financing Options

Unless you have the aforementioned overflowing bank account, you’ll likely need financing to pay for your new car. This means that you’ll first need to assess your entire budget and decide how much car payment you can afford. You’ll have to take stock of your entire monthly budget in order to be accurate.

Secondly, you should decide if you want to finance through the car dealer or through your own bank. In most cases you’ll get a much better interest rate through your bank or credit union, so pay them a visit to discuss your options. Make sure the loan you opt to go with is a good deal and not something you’ll regret as soon as you step off the lot. However, in some cases auto manufacturers will offer special deals on financing, so check their websites to see if any of those deals apply to you.

2. Choose Your Make and Model Carefully

Unless your car needs are very specific, such as a van for work, be sure to consider all of your new car options. While a new car can rarely be seen as an investment, there are advantages and disadvantages to each type of car, and one of the most important of these is the resale value.

Certain types of cars hold their resale value longer, which means that you’ll lose less of your money when you either sell it or trade it in. Toyota, Honda, and Jeep are just a few of the most sought after makes on the used car market, so if one of these works for your lifestyle and your budget you may want to give them serious consideration.

3. Pay a Visit to Multiple Car Lots

Getting the best deal on a new car requires more than simply stopping in to the nearest dealership. Prices can vary widely from lot to lot so it’s in your best interest to visit multiple car dealers, even if you’re looking at the exact same car each time.

Some dealers even offer bidding and price quotes online. If you already know the exact make and model you want to purchase, you can use this feature to determine the price differences between dealers. You can even take the initiative and inform Dealer A that Dealer B is offering a better deal, which may result in a lower price from Dealer A.

4. To Trade In or Not?

Using your old vehicle as part of the down payment for a new one has long been the standard practice, but you may be losing money on that transaction without realizing it. If you’ve secured financing through your own bank, it makes sense to sell your old car yourself and simply apply that cash to the loan principal.

If you decide to offer up your used car in negotiations with the dealership it pays to do your homework. Be sure that you have checked your car’s resale value with Kelley Blue Book before you start. When you begin haggling with the salesperson on the price of your new car it’s best leave your trade in out of the equation at first. Once you’ve reached a price that is acceptable to you, mention your trade in and also mention the fact that you are well aware of its resale value. Still, be aware you’ll get less at a dealership than if you successfully sold it on your own.

5. Negotiate Like a Boss

Car salespeople can be intimidating, especially for first time buyers or those who have little experience negotiating. This is why impeccable preparation is key before you visit the car dealership. If you’ve done your comparison shopping and can express your newfound knowledge adequately, you are already ahead of the game.
Don’t feel awkward or uncomfortable; maintain a calm demeanor and tell the salesperson what you will and will not accept. They want your business so if you’re confident in your decision and have the facts to back it up, you’ll likely drive away with the exact deal you were hoping for.

Buying a new car doesn’t have to be difficult, but it does require preparation. Follow some of these tips to ensure that you get the best car your money can buy.