Buying a new car can be exciting, challenging, and nerve-wracking. Thankfully, with an average of 15 and a half million cars sold every year in the United States, the car buying process has been refined for consumers over the decades. But do you know the best way to buy a new car? Are you prepared for every eventuality? Consumers can follow these eight easy steps.
Work out Your Budget
If you’re buying a car, the first thing you do is determine your budget. The average loan repayment for a car purchase is around $500 a month. Can you afford that, or is it better to buy your car outright? Start by considering the 20/4/10 rule. Car financing shouldn’t take up more than 10% of your monthly income and should be repaid within 4 years. You should also be able to put down at least 20% of the total cost of the car to bring costs down. You should only look to buy a car you can truly afford, so consider your budget carefully.
Look Online to Build a Car Wish List
With a budget in mind, you should start to build your car wish list. If you’re not a car fanatic, you can start by looking online at used car buyer guides and ‘top 10’ lists like this to help inspire you. You should think about what you’ll need to use your car for. Do you need a small vehicle to get around in, something with space for the kids, or a pickup truck for rural usage? With SUVs, compacts, hybrids, and sports cars on the market (to name but a few!), you’ll have plenty to choose from. Once you identify the type of car you want, you can then build a wish list of potential car models.
Compare Prices (Online and Offline)
Found a few car models you like? Your next step before heading to the car lot is to look at some prices. You might have already done a little bit of this when you were researching models, but now it’s time to look at actual prices in your locale. We’re going to recommend you look online at car ad directories, major car selling sites and local dealership websites, but focusing online doesn’t necessarily get you the best deal. If you have dealerships nearby, don’t be afraid to give them a call and ask what vehicles they have in your price range.
Visit Dealerships in Your Area
If you’ve found a car you like, it’s time to move your search outside your home and visit a few in your local area. Dealerships offer the best guarantee possible of finding new or certified pre-owned vehicles. CPO cars are usually the best quality used cars you can find, with lower-than-average mileage and a rigorous inspection and refurbishment process. Visit a few dealerships, take a look around, and don’t be afraid to ask questions about the sales process or about any cars you like the look of. If you’d prefer, you can deal with private sellers on directory sites like Craigslist, but you take on added risk. There’s no guarantee that the car you buy is safe to drive, and you may find it harder to get your money back if there’s a problem.
Get Yourself a Vehicle History Report
Before you rush to put down a deposit on a car you like, take a step back and get a vehicle history report from your local DMV or from an online provider. Use the car’s license plate number to run the search. A report like this can help you determine if the vehicle you’re looking to buy has a less-than-reputable history behind it. The report will list any recorded accidents, the number of owners, and if the car has a salvage title or not. Be very wary of vehicles with salvage titles. These vehicles were damaged extensively and rebuilt before sale and can harbor unseen issues.
Take a Test Drive and Speak to a Mechanic
If the car you like doesn’t have any warning flags in its vehicle history report, then speak to the dealership again about taking the car out for a test drive. You shouldn’t buy a car without trying it out and seeing if it feels right for you. Is it the right size, and is it comfortable to drive? It also gives you the opportunity to do some further inspection yourself. The ‘sniff’ test could be essential here – do you smell anything strange, like oil or gas, when the car engine is running? Test everything you can, from the wipers to the air conditioning. Don’t be afraid to ask for a second opinion, either. A mechanic can provide an inspection report for a few hundred dollars to give you additional peace of mind about the car’s condition.
Begin Price Negotiations
The car you like is being sold for a price, but it isn’t necessarily the fairest price. Remember, dealerships are looking to make a profit – but just how much is up to your negotiation skills. Speak to your car salesperson about the car and register your interest. Don’t go in feeling vague about your budget, and don’t go above it. Your budget exists for a reason! Choose a starting number based on some of the average prices you’ve seen for the same car model when you were completing your earlier price research. The dealership might not accept your first offer, so be prepared to negotiate. As long as you don’t go above your top limit and you stay reasonable, polite, but firm, you may be able to secure yourself a better deal.
Complete the Sale
With a price agreed upon, the final step is to complete the sale. You’ll need to arrange car financing, either with the dealership or with an external financing company, and complete this step at this stage once you know the price you’re paying. You may want to consider some of the extras on offer. If your car is a certified pre-owned vehicle, it will likely come with a warranty included. Remember anything your dealership attempts to upsell, needs to be considered against your budget. Ask yourself, is it essential? Before you sign a sales contract, check, check, and check it again to be sure you’re not being misled. Confirm the price, and question and confirm any administration fees before you sign. Once the sale is completed, be sure your car is covered with insurance before you drive it out of the car lot. u
Make the Car Buying Process Work for You
Buying a car shouldn’t be a challenge if you follow these steps and make the process your own. Remember, research is your best weapon in the car buying process. Stick to your budget, find a car you like, and be sure to get it tested before you haggle on the price. Don’t forget, thanks to Texas Lemon Laws, if you’re sold a lemon, you may be able to pursue legal action against the car manufacturer for compensation. That’s where we come in. If you’re based in Texas, Lemon Proof provides protection against the often expensive fees and expenses associated with replacing a lemon.Want to give us a test drive? Drop us a message or give us a call and we’ll be happy to answer any questions that you might have!