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Top 5 tips for buying a new car

Young couple sitting in a new car

November 27, 2019. Buying a new car can be a big investment for many of us. New car shopping can be exciting yet overwhelming, and it can be tempting to make impulsive decisions. These tips for buying a new car will make car shopping a little easier and less stress.

5 tips for buying a new car

Here are some tips to keep in mind if you don’t know where to start when buying a new car:

1. Research

Decide on what type of car you want and which options are must-haves and which ones you don’t need. Car company websites will allow you to configure most new vehicles to your own personal specifications and give you an estimated cost on what you are looking for before you even go to the dealership.

2. Go for a test drive

One study found that 16% of Americans bought a car without going for a test drive. A test drive is one of the most important and enjoyable parts of buying a car! You should always go for a test drive to find out whether the car fits your needs and if you feel comfortable behind the wheel. Buying a new vehicle is a big decision and you may want to consider renting the same car for a week before you decide to buy it.

3. Set a limit

The car you purchase will depend on what your budget is, how much you can afford to spend in total and how much you can afford to spend on payments per month. Knowing what can fit into your budget will help stop you from making decisions based on emotion the first time you walk into a dealership.

Don’t forget to factor in maintenance, gas, and insurance when setting your limit. When financing, focus on the total amount you will be paying, not on how low you can get your loan payments, so you don’t end up paying more than the car is worth. Don’t be afraid to walk away from a car you can’t afford or isn’t a good fit for you.

4. Timing is important

Timing your purchase right can help you save money. Dealers try to sell last year’s models by doing end of the year sales. The end of the month is also a good time to buy because you might find a salesperson who needs to meet month-end quotas and will be more likely to give you a discount.

5. Negotiate and don’t buy options you don’t need.

Dealers typically mark up vehicles 2-5% to ensure a profit. This is the invoice price, which is still smaller than the MSRP price the car is listed at. You should negotiate down to or below invoice price. Also, avoid the add-ons dealers will try to talk you into; a lot of them don’t hold their value well, you might not even use them, and if you really want them, chances are you can buy them elsewhere for less. Shop around! Car dealerships are in direct competition with each other (even dealerships under the same brands) and each offer their own individual discounts and sales depending on their current stock. Try not to rush into a purchase and you could save yourself thousands of dollars with a little bit of patience.

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