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The essential checklist before buying a new car

Man driving car
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Man driving car
Sergey_T/Getty Imgaes
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Buying a new car can be intimidating, and one of the hardest parts of the process is knowing where to start. From identifying the right car for your budget and lifestyle to negotiating a deal, there are many steps involved. And at a time when new car prices are soaring due to inflation and limited stock, it’s especially important to be well prepared to navigate the buying process.

If a car purchase is in your future, take these steps to ensure that you are getting the best deal and vehicle for your needs.

Before heading to the lot: Researching

Much of the work in buying a new car takes place before you even set foot in a dealership. Here’s where to start.

  • Set your sights. It may sound obvious, but the first step is to decide what vehicle you want, including what features are essential versus simply being nice to have.
  • Check pricing. Before entering negotiations, understand market pricing and set expectations for how much you are willing to spend. Kelley Blue Book is a great resource to research current vehicle pricing before arriving at the lot.
  • Decide on financing options. There are two primary options for car financing: direct lending and dealership financing. There are pros and cons to both options. Independent lenders may offer you a lower interest rate, but dealerships could have incentives — like 0 percent financing — if you take out a loan through them.
  • Do the math. Owning a vehicle costs far more than just the sticker price you will be presented with. Be prepared to cover additional costs, like maintenance, gas, insurance, registration, taxes and fees.
  • Check your credit. As with most financial choices, your credit score serves as a vital factor in your interest rate, so understand your credit health before going to the dealership.
  • Organize your paperwork. Arrive at the dealership prepared with your driver’s license, payment method and proof of insurance. If you are financing through the dealership, you’ll also need proof of income and employment.

On the lot: Investigating the car

A test drive is one of the most important elements of your car purchase. Investigate all aspects of your car with your lifestyle in mind.

  • Examine the specifics. This will be your vehicle for quite some time, so be prepared to explore the ins and outs to make sure that it’s the right fit. Are the seats comfortable? Can you easily access the spare tire? Is the trunk large enough?
  • Map out a test course. Test the car in the same environments in which you will drive it — on the freeway, in stop-and-go traffic, in parking lots and on hills. If you don’t know the area well, tell the salesperson the types of driving you want to do and ask them where to go.
  • Get behind the wheel. Take your time in the driver’s seat to test the brakes, park in tight spaces and check visibility. You’ll also want to monitor road noise and the smoothness of the ride.
  • Compare the car on the lot to your checklist. Remember that list of nice-to-haves and essentials you made? Now that you’re on the lot looking at the actual vehicle, make sure it aligns with those priorities to make sure you’re getting the best car for your needs and lifestyle.
  • Leave emotions at home. When you’re sitting in that new car on the lot enjoying its high-tech features and new car smell, it’s easy to forget about your budget or must-haves and let emotions take over. If you find a car you love that doesn’t meet your original parameters, step away and think about the purchase before making a decision.

On the lot: Deal-making

Once you have chosen your dream vehicle, you’ll need to be prepared to ask questions and negotiate to get a good deal.

  • Confidently negotiate. Negotiation is one of the most dreaded aspects of car buying. But if you come prepared, the difference can be seen in dollars. Remember, don’t rush your negotiation, and always be prepared to walk out if you’re not satisfied with an offer.
  • Check for deals. Depending on the time of the year, or even the time of the week, dealerships will have special pricing. Search for special pricing or rebates before meeting with a salesperson.
  • Don’t talk trade-in. A salesperson will likely push for a trade-in, but it’s best to negotiate the price of your purchase before talking about your old car. That way, the dealership won’t have a number in mind based on the value of your previous vehicle.
  • Read the fine print. Before signing on the dotted line, read your contract in full. Pay special attention to the money due upfront, including closing costs and added fees.
  • Make a counteroffer. Use the number you found when researching market value as your measurement for success. The key to a counteroffer is to not be so outrageous that the dealer won’t take you seriously, while also pushing back enough to get the best price.

Next steps

Buying a new car will have significant financial ramifications for your budget for years to come, so be sure you’re well prepared as you embark upon this process. Research vehicles before you head to the dealership and, equally importantly, crunch the numbers and figure out exactly how much you can afford to spend. And, once you head to the dealership, leave your emotions at home and stick to your game plan.

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Written by
Rebecca Betterton
Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers in navigating the ins and outs of securely borrowing money to purchase a car.
Edited by
Auto loans editor