Craving that new car smell? You’ll have to endure the exhaustive buying process. First, you must figure out which car is right for you and what you can afford. Then, there’s going to the dealership.
“A lot of times, people go to the dealership unprepared,” said Ronald Montoya, senior consumer advice editor at Edmunds, an online resource for automotive information. “So there’s confusion on knowing enough, knowing what you should be paying, knowing you can go to another dealership and so on.”
Here are some tips for car buyers the next time they are on the lot.
Get pre-approved first
Besides researching what car is right for you, you’ll also need to figure out how to pay for it.
Unless you buy the car in cash, you’ll have to take out a loan, which includes financing charges. You can take out a car loan through a financial institution or the dealership itself. It’s best to get a loan directly from a bank, credit union or other lender — you can often secure a better interest rate. Going through the auto dealership adds a middleman, which typically adds extra fees.
Getting pre-approved doesn’t mean you have to get a loan through that lender. Car buyers can get several loan offers before heading to the dealership, Montoya said.
“By the time you are at the dealership, you’re only there to test drive and come back and sign,” he said.
Find out about how car loans work here.
Note: Auto loan interest rates are set based on your credit score, the type of car and terms of the loan. Having good credit can help you secure a low-interest loan — here are some simple ways to improve your credit.
At the very least, come to the dealership with some idea of the car you want, how much you can afford and the features you need.
“Don’t expect the salesperson to educate you,” said Montoya. “If you have a specific vehicle in mind, you’re responsible for educating yourself.”
Salespeople are typically paid on commission, and will push customers toward pricier vehicles or models with bells and whistles, said Montoya. While you can (and should) ask plenty of questions, have an understanding of what you’re looking for.
A good place to start is a comparison website like Edmunds, Cars.com or Kelley Blue Book. They provide car reviews, appraisal values, average car prices and more. Think about your specific situation. Are you planning on expanding your family? Do you commute a long distance to work? These are the factors to consider when deciding what car to buy.
Get familiar with the car-buying process
Once you step foot on the dealership lot, you should understand the steps you’ll take before buying a car: inspection, test driving, asking questions, signing paperwork and so on.
Avoid initial stress by heading to the dealership at the right time. Weekends are often busy, especially when the weather is good, said Montoya. If you have questions, going on a weekday or in the evening may be your best bet. If you’re looking for a deal, start shopping toward the end of the season or year. Most dealerships have quotas to fill and will sell a car at a discount to get it off the lot. Certain holidays, like Presidents Day and Memorial Day, have their own special sales.
Consider bringing a friend or partner with you. They can serve as a sounding board and offer objective advice.
Montoya recommends spreading the process over two days.
“Once you find a car, sleep on it and come back the next day to sign the paperwork,” he said. “This eliminates impulsive decisions.”
Check out our ultimate guide to buying a car.
Determine a range of how much you would be willing to pay for the car, including the absolute maximum. There are plenty of hidden fees that come with buying a car, but not all of them are set in stone.
“What always calms people down is when they’ve done the research,” said Montoya.
It’s vital to test drive the specific car before you buy, said Montoya. You’ll want to make sure it has all the features you want and doesn’t have any quality issues.
“If you want specific options or colors that the dealership doesn’t have in stock, they will try and push you to something they have on the lot,” he said. “But you have the advantage. You are able to negotiate to get the car you want.”
The most common sales tactic is to focus on the monthly payment over the overall cost of the vehicle. Salespeople can (and do!) manipulate the monthly payment to make it appear you’re getting a good deal even when you’re not, said Motoya. Customers could wind up with an eight-year car repayment plan, which can become a financial burden over time.
When going through paperwork, the salesperson may suggest additional add-ons, like extended warranties, paint protection or window etching (all of which ia often expensive). It’s best to decline these offers. Most of the items are available from other sources. Check with your insurer or lender to see if they offer similar products at better prices.
“It doesn’t take a battle with the salesperson to get what you want,” said Montoya. “You have the information. It’s not about going back and forth. It’s about being informed. It’s about pointing out the facts.”
Don’t know how much car you can afford? We have a guide here, along with tips on how to budget for one.
Image: David Cairins