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How To Buy a New Car


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The fourth in our “Road Safety 101: A Weekly Guide to Staying Safe on the Road” series covers tips for new car buyers. Most new cars come with a manufacturer’s warranty. Buyers also rarely have to worry about a car’s history when it is being purchased new off the lot. New cars, particularly those with a high safety and crash-test rating, are safer to drive and will help to keep your family safe.

If you are interested in buying a car, or you are in the middle of the car-shopping process, these tips may help you find the safe and reliable car you are looking for, at a price you can afford.

Do Your Research Before You Buy a New Car

Before you head over to your local auto dealer, you are going to want to do a little research first. Figure out what kind of car you want and the model most suited to your needs. People who have long daily commutes may be more inclined to buy an electric or hybrid vehicle, whereas those with larger families may lean more towards an SUV.

Once you have chosen the type of vehicle you want, go online and read reviews from other buyers. Find out what they think about the car, how it operates, whether it is worth the investment. Check to see how the vehicle you want to buy rates on the National Highway Traffic Safety Administration’s 5-Star Safety Ratings. Safety must be of your utmost concern, as you want to do everything you can to make sure you and your family will be less likely to be injured should an accident occur.

You should also take the time to find out the value of your trade-in. Go to Kelley Blue Book (kbb.com) to find out what your vehicle is worth before you go to the dealer. This way you can be informed about a fair trade-in price when buying a new car.

Get Approved Ahead of Time

Now is the time to determine your credit score and buying power. If you know the type of offer you are likely to get before you even walk onto the dealer’s lot, it will increase your chances of getting the vehicle you have chosen at a reasonable price. Individuals with higher credit scores will be able to get lower interest rates, also called APRs (annual percentage rates), on auto loans, and have more overall buying power.

Figure out how much, if any, you are can put down towards your new car. Dealerships tend to make better deals for larger cash down payments. The down payment affects the final costs and your monthly payment. According to Edmunds, the average down payment for a vehicle is about 12%, but there are deals out there, including no-down-payment offers.

Take this information to your bank, credit union or other private lending source to see if you can get pre-approved for a loan. Getting financed through the auto dealer at the time of purchase will generally mean you can expect to pay higher rates. Compare offers and see which one gives you the better rate, and choose that loan. You will want to know what you can afford and what you are able to finance before you begin the negotiation process.

Shop Around

Get competitive quotes from different dealers. Not all dealers have the same vehicles nor do they offer the same deals. Shop around. Do not worry about trade-in or terms, as you should already have that information, simply work to find the lowest price for the vehicle you want. Don’t compromise—you’ll be using that vehicle for years. If prices are similar, you can negotiate and see if one dealer would be willing to come down to beat a competitor’s price. Many dealers will do so to get the sale.

You should also consider buying towards the end of the month, as you may be able to get a better price. Dealerships and sales reps often tend to be more interested in wheeling and dealing at the end of the month when they are trying to reach sales quotas for that month. This can be used to your benefit when shopping for a new car.

If you have done your research, have a loan approval in advance, and have shopped around for the best price, your next step is to finalize the price and complete the paperwork for your new car.