There are many tips and tricks on what to know when buying a car, because it can get overwhelming, especially if this is your first time. While everyone has their own way of preparing to buy big ticket items like a car, we can give you some basic tips to look over when you’re ready to buy a vehicle.
Things to Keep in Mind When Buying a Car
Whether you’re buying a new or used car, it’s important you have a strategy in mind and stick to it. When buying a vehicle, you should always consider the most important things – overall cost, safety, and reliability, to name a few – first. Things like add-ons and even incentives should be secondary, since you should start with your basic needs and work from there.
Car Buying Strategies for New Cars
It’s easy to get sidetracked during the process. If you’re looking for car buying strategies based on the type of vehicle you want to finance, we’ve gathered this list for you to follow:
- Calculate a budget – Using online tools and calculators, you can determine how much car you can afford. When budgeting, make sure you look past the monthly payment, and also keep in mind the costs of a down payment, insurance, gas, maintenance, and repairs. Just because you can afford the monthly payment doesn’t mean your budget can also handle the additional costs associated with owning a car.
- Research vehicles – What type of vehicle do you need? Think about your current situation, and how you plan to use the car. If you need to carpool or haul your family around, consider a minivan or SUV. If you’re the only one using the car, you could opt for a sedan or smaller crossover. Look at selling prices, reviews from other owners, fuel economy, safety, reliability ratings, and anything else that’s important to you.
- Look up rebates and incentives – Check for any incentives and rebates. Some new cars come with low or zero APR deals, while some offer customer cash incentives. If you qualify for a specific deal and you’re torn between two vehicles, a rebate or incentive could be the deciding factor.
- Research your trade-in – If you plan on trading in your current vehicle, you can check how much it might be worth. Valuation sites such as NADAguides can give you an estimated trade-in value for your make and model. Remember, the figure is just an estimate, and each dealer is going to determine how much your trade-in is worth. At the same time, you can use the estimate from the valuation site as a reference to negotiate the price of your trade-in.
- Get pre-approved – One of the best things you can do is get pre-approved for a car loan from your bank or credit union. Being pre-approved gives you a big advantage during the car buying process because you can shop like a cash buyer. The lender sets the maximum amount you can borrow and the interest rate you qualify for, so you can focus on choosing the vehicle when you head to the dealership.
- Get multiple rate quotes – If you’re looking for the best rate, you should aim to get quotes from two to three different lenders. This way, you can compare offers and pick the best rate. It doesn’t hurt to rate shop as long as you do it within a given time frame (14 days to be safe) to avoid multiple hard inquiries.
- Test drive the car – When you get to the dealer, test drive the vehicle under various road conditions and ask questions. Make sure you’re aware of what the car is capable of, and pay attention to how it feels when you drive.
- Negotiate one item at a time – Every item that adds to the total cost can and should be negotiated. The trick is to negotiate each item one at a time and don’t get distracted – this is where you could miss a good deal.
Car Buying Strategies for Used Cars
The used car buying process begins just like the one for new cars: you need to budget and research vehicles for sale in your area. But, because these vehicles are pre-owned, you’re going to want to take more care, starting with these tips:
- Check the vehicle history report – Make sure you run the VIN number and get a vehicle history report and make sure the information given by the dealership is accurate and up to date. You don’t want to buy a used car with odometer issues, a washed title, or one with severe accident damage.
- Ask questions – Don’t be hesitant to ask any and all questions about the vehicle. If the seller is apprehensive about answering certain questions, such as if it’s ever been in a flood, it’s best to walk away.
- Have a mechanic look at it – Just because you think the car is in good shape, doesn’t mean it is. Once you’ve decided on a particular vehicle, have a trusted mechanic and body specialist take a closer look. They can identify any potential issues that you might not see.
- Negotiate the vehicle’s price – Just like a new car, you can negotiate the vehicle’s purchase price with the seller. You can use sites like NADAguides to get an estimate of how much the car should sell for.
- Finalize the deal – If you’re buying from a private party, you need to finalize the purchase with both you and the seller present. Make sure the title is properly transferred over to you, and that all documents are signed by both of you before heading to the DMV or secretary of state. If you’re buying from a dealer, they have the title and takes care of all the paperwork for you. You just need to sign the proper documents such as the finance contract, odometer mileage statement, “As-Is” used car buyer’s guide, application for registration, and the title. From there, the dealership handles the paperwork with the DMV or secretary of state.
Is it That Easy if I Have Bad Credit?
When buying a car, it takes time and effort if you want the best possible deal. Although the process is slightly different between used and new, or if it's sold by a private party or a dealer, the end goal is to get financed and drive away with a vehicle. It may seem like a fairly simple process, but if you have bad credit, you typically aren’t going to be able to get pre-approved by a bank or credit union, or even get financed through many dealerships.
So, where do you go? You start with Auto Credit Express! We work with dealers across the country that specialize in helping borrowers in unique situations get financed. Start today by submitting our easy and secure auto loan request form.