Note: This article from Nerdwallet includes many good tips for getting the best deal on a car. If you need financing, please contact us at Self-Help! If you have been a Self-Help member for at least 90 days, our car loans are more affordable than ever.
The number of decisions you have to make when buying a new car can be dizzying. And while many of them will depend on your individual needs and wants, there are some steps you should take no matter what to ensure you get the best deal.
Assess your credit and financing options
Unless you plan to pay cash, your credit will matter a great deal as you look for financing. Get your (free) credit report from AnnualCreditReport.com and look for any errors. If you want to know your credit score, you can buy it at myfico.com — but first look at your credit card's monthly statement, as some issuers include your score there.
You can get financing through the dealer, but it's far from your only option. Inquire at your bank or credit union about its auto loans and ask to be preapproved. If you are, take the approval with you to the dealer. Consumer Reports offers some useful do's and don'ts at the dealership.
If you are getting rid of an old car, you can sell it to someone or trade it in at the dealership, and put the proceeds toward a new car. Use the Kelley Blue Book to find estimates of your car's trade-in value and the price you can expect if you sell it. There are also a number of car-shopping apps you can check for competitive offers.
Set a budget that makes sense
Add up your preapproved loan, the value of your trade-in and any down payment you plan to make, then subtract about 10% for taxes and fees (rates vary by state). This will give you a good idea of what you can spend. If you want to go by how much you can afford to pay each month, use an affordability calculator to see where you stand.
Buying the car isn't the last time you'll put money into it, of course. There's gas, maintenance and much more. At sites such as Edmunds.com, KBB.com and NADAguides.com, use a metric called “five-year cost to own” to get a more complete view of how much your chosen vehicle will cost you.
Do your research
Look up dealerships on customer-review sites like Yelp (filtering out the nonsense, of course) and on auto websites such as DealerRater.com (where the comments are moderated). Conduct research into your chosen make and model and options, too, so that you'll know when the dealer quotes a price that's just too much.
When you're ready to get those quotes from dealers, shop around — from home. Edmunds.com recommends calling at least three dealerships that carry the car you want and asking for the Internet sales manager. The idea is this person deals with savvier customers and so is more likely to go lower. And play the offers off one another to really get the best deal.
Hold your ground
Like the grocery store stocks goodies in the checkout aisle, the dealer may offer you an extended warranty or service deal just before you start signing the paperwork. The goal is the same: to get a last little bit of money from you. Resist.
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