How to Buy a Car
|How this Guide is Organized|
|1. Choosing the Right Car|
|2. New Vs. Used|
|3. Negotiating the Price on a Car|
|5. Owning a Car|
There are few things in life more exciting than buying a car. Our cars are an extension of our personalities and lifestyles. They can publicly display whether we’re urban adventurers, weekend warriors, or soccer families.
Buying a car is typically the third largest purchase decision that we make in our lives, behind choosing a college and buying a home. It can be a daunting challenge, culminating with a trip to a car dealer that for many buyers is about as welcome as a trip to the dentist. However, if you break down the process into a series of steps and arm yourself with information, the process is a lot easier. The more prepared you are, the more likely it is that get you the car that you want at a price you can afford.
Information is your best friend in the car buying process, while confusion is a tool used by sellers to get you to pay more than you should for your new ride.
Finding the right car is all about balancing the car you want with the car you need. While we all might want a Mazda Miata, it’s obviously the wrong choice if you need to carry three kids and a Great Dane (or even just the Great Dane.)
Do you drive in snowy weather? You might want to consider a car with all-wheel drive. Do you need to carry a lot of people, cargo, or a mix of the two? You might want an SUV, minivan, or wagon. Do you want a fun car to rip around in on the weekend? A sports car or convertible might be the right choice.
How much car can you realistically afford? Our car affordability calculator can help. Are there life events on the horizon that might make a short-term lease a better deal than buying? You can learn more about leasing vs. buying here.
Once you’ve answered questions like these, your decision process can become much more focused. One of the best sources for information when choosing a car is U.S. News & World Report's rankings.
Do you want the latest in high-tech features, a full warranty, plus the intoxicating new car smell – or would you rather save thousands of dollars by buying a used car. It’s not as easy a decision as it used to be, as there’s now a third choice called a certified used car, which is usually a relatively young used car with low miles and a manufacturer-backed warranty.
Whichever route you choose, there’s more information for buyers available than ever before. U.S. News & World Report's new car rankings and used car rankings are a great source of information. You can also see what's available in your area by using U.S. News' new car finder and used car listings.
Financing is one of the last things many car buyers consider, but it should be one of the first. You can borrow money from a bank, credit union, finance company, or the financing arm of car manufacturers. Getting pre-approved for financing gives you a baseline that you can use to negotiate a better deal from the seller at the end of the process.
It is important at this point to understand how much you can afford to pay. Don’t focus on the monthly payment, however, as you might find yourself owing on a car for eight or nine years and paying thousands more than you should over the life of the loan.
Though not all lenders will require it, you’ll want to pay some money up front as a down payment to reduce your risk of owing more on the car than it is worth. When you finish paying off the loan, the car is 100 percent yours!
Car buying is one of the last bastions of free-wheeling price negotiation, and that’s one of the reasons many buyers find the process unnerving. Times are changing though, and more dealers are offering fixed prices, plus there are programs like U.S. News & World Report’s Best Price Program, where buyers receive a guaranteed discount off of the Manufacturer’s Suggested Retail Price (MSRP).
The best route to a good deal is to avoid the confusion that sellers try to foster. Don’t bundle the cost of the car, financing, trade-ins, and add-ons. If you keep the transactions separate, you’re more likely to get the best deal on each of them. Though it can be emotional, it is just a business transaction, and you have the power to walk away from a deal that you’re uncomfortable with before you sign on the bottom line.
Your financial commitments don’t end when you drive your new, or new-to-you, ride home. You’ll need to register it (the dealer may do this for you), buy the proper insurance for it, and maintain the car so it will retain its reliability for many years to come.