If you’ve never endured the journey of purchasing a vehicle, you are in for a treat. Car buying can usually be either a pleasant experience or a poor one if you walk into your local new or used car dealer unprepared. Fortunately, you’ve already taken a step towards an enjoyable car buying experience by finding yourself here where we’re going to go over a few tips on how to proceed towards your first-time car buying adventure while also keeping your stress level at a minimum so you can enjoy the ride.
STEP 1: Do Your Homework!
The very first and most important step in car buying, whether you’re new to the game or a polished buyer, is: Do Your Homework! Being prepared and doing your research before you walk into the dealership will certainly make the process much smoother and more enjoyable for you. Even just knowing what you want in a vehicle and what your monthly budget for a vehicle is can help guide you to your finance and dealer options, and then to the fun part, which vehicle you’re bringing home.
At the top of your criteria list should be your budget. You need to figure out how much you can afford monthly for a vehicle. I’m not just talking about your monthly car payment, but you also need to consider the cost of car insurance, fuel, vehicle maintenance like oil changes and tire rotations, car registration, as well as other expenses. Do some research on average rates for fuel and insurance, and then dust off that calculator for a little math to calculate possible fuel costs based on your commuting routines, to come up with an estimated amount of money that you may need to put towards your car expenses. Once you have a general expense amount, deduct that from the money you have available to put towards a vehicle monthly, and that’s your estimated car payment budget. Once you know your budget, it’s time for the fun criteria list.
Figuring out your budget is important, but so is knowing what vehicles will suit your lifestyle as well as your general preferences. The automobile industry has flooded consumers with a variety of choices when it comes to vehicles. Not only do you need to have an idea of what class of vehicle you want – whether it be a car, truck, or SUV – you also have the option of the manufacturer or “make”- like Ford, Dodge, Jeep, Chevrolet, etc. Don’t forget that you then have to narrow it down further to which “model” you want (i.e., Ford Explorer, Dodge Charger, Jeep Cherokee, Chevrolet Silverado). Then there’s a selection of trim options for models…it is a lot!
Having a general idea of what you want or need can lead you to finding the dealership that is offering what you may be looking for. Whether you are looking for a vehicle to tow with, something with plenty of interior space to carry all your camping gear or extra passengers with, or you just want something that will keep your fuel expenses down and you want it to be orange, there is a lot to consider and a lot of places to go. Narrowing down your options first will lead you to the right dealer and help you determine what financial options are available to you.
STEP 2: Figure Out Financing Options for Your Budget
You’re one step closer to finding your new car! Now that you know what your budget is, what kind of vehicle you need, and what you are looking for in a car, it’s time to use that list of criteria that I hope you created and use it to help guide you through the financing options available to you. As with the abundance of vehicle options, there are also many financing options out there, like whether or not to buy or lease a new car, buy a used car, get a loan through your bank or credit union, or just get a loan through the dealer itself. This is where your search criteria can help.
When you have a general idea of what you are looking for in a vehicle, you can use that to research car inventories at a new or used car dealer near you to get a general idea of cost. It’s not a bad idea to investigate pricing on new vehicles, even as a first-time buyer. There are plenty of affordable, budget-friendly new vehicles on the market today, and when you are looking to purchase a new car, you then have the option to either buy or lease.
Beware: choosing between buying and leasing a new car can be a tough decision. With a lease, you can get lower monthly payments – usually on a higher-priced or better-equipped vehicle than you’d get with a conventional loan from your bank, credit union, or car dealer since you are paying to drive the new car for a set term rather than actually buying it. But sometimes, the conventional loan route can be more satisfying since you are actually purchasing the car to add to your assets, and you can drive it for as long as you want and however you want to. With a leased vehicle, there are more restrictions to abide by since you aren’t technically buying it to own.
On the other hand, purchasing used is just as good of an option as buying or leasing a new car. Today, there’s the capability to trace the history of used vehicles so that you know exactly what you are buying. Loans are also available for used cars, and some may even still be covered under the manufacturer warranty, or the used car dealer may offer a warranty as well. Not to mention there are “used” vehicles out there that are only a year old. Since new vehicles depreciate their value significantly the moment they leave the dealer’s lot, those year-old “used” vehicles may have a friendly price tag even though they are practically new.
STEP 3: Take Your Preparations to the Dealer Like a Pro
If your plan is to take a loan out from a bank or credit union, make sure you’ve received the pre-approval letter to bring with you. Now that you have everything in order, it’s time to take all of your hard work to your local new or used car dealer. Once you’re in their lot, take a browse around their inventory first and pick out a couple of options that may work for your budget and fit your criteria for a car. Test drive a few options, and then let the negotiation process begin!
The number one thing to remember: you can always walk away! Whether for a different model or even to a different dealership altogether, you do not have to commit to anything if you haven’t signed any paperwork. Salespeople from any industry want to sell their products or services to you no matter what, but remember, you know what you want and what you can afford. Now use that! Negotiate like a professional for the vehicle that you want, but keep your poker face up –don’t let them know you’re dying for that Ford Mustang.
Finalizing the Deal
Now that the amateur buyer has won over the professional salesperson, the financing is in order, and you’ve taken your time with the paperwork making sure there aren’t any extras in the deal that you may not want or need; it’s time to relax. Sit back, take a deep breath, and enjoy the new car smell in the lobby as your new purchase gets detailed. The next and final step in your new car buying journey is to turn on that engine, put the vehicle in drive, and enjoy the ride!