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The essential checklist before buying a new car

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One of the hardest parts of buying a new car is knowing where to start. If a car purchase is in your future, take these steps to ensure that you are getting the best deal and car for your needs.

Before heading to the lot: Researching

The majority of the work in buying a new car comes 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 on what vehicle you want, including what features are essentials versus nice-to-haves.
  • 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 look into 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 way more than just the sticker price you will be presented with. Be prepared to factor in the additional price of things 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. Come to 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.

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 in 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.

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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
Student loans editor