Everybody loves the idea of buying a new car, but unfortunately sometimes shopping for one can be an overwhelming experience.
A new car is second only to a home as the most expensive purchase many consumers make, and with an average purchase price above $33,560 (according to Kelley Blue Book), you want to make sure you're happy with your purchase.
To help you in the process, we've compiled this list of car-buying dos and don'ts to help you improve your new-car shopping experience.
1) Do Know What Kind Of Vehicle You Are Shopping For!
Educate yourself ahead of time about the vehicles you're interested in, and know what kinds of options and trim levels are available.
Consider several vehicles and research the accessories, features, and trim levels available on each one ahead of time, so you know what trim levels interest you, and which ones you would not want to pay extra for. Knowing the cost of each trim level, options, and packages is very important because depending on the car, these add-ons can add up to the cost of a whole other new car! Keep in mind that most vehicles are packaged according to specific trim levels, and can’t always be purchased to specific requirements without a special order, so familiarize yourself with your vehicle by visiting manufacturer's websites where you can configure the vehicle ahead of time and learn the costs of specific trim levels and options.
2) Do Your Pricing Research Ahead Of Time!
Manufactuer's suggested retail pricing is just a starting price. To get the best possible price, you need to learn as much information about the vehicle you are shopping for before you ever enter the dealership.
Dealer invoice pricing used to be a secret, but such information is easily obtainable from a variety of sources these days. Use online shopping tools at websites like Edmunds.com, TrueCar.com, and KBB.com to help you know fair market pricing before you ever visit a dealership. TrueCar not only will give you retail and wholesale pricing, but will indicate fair and good pricing to pay, by zip code. On used car purchases, TrueCar will show what is being paid for similar models and mileage, and will indicate if the prices are above or below market value. Compare several sites against each other to know the best pricing before you start to negotiate at a dealership.
3) Do Know How Much You Can Afford!
Don't shop for a luxury car if you're living on a small-car budget.
The rule of thumb when buying a new car is to put about 20 percent down, try not to borrow for more than five years (60 months), and keep your monthly payment lower than 10 percent of your income. Don't forget to factor in such things as fuel costs and annual maintenance. If you know your average commute, you can figure out in advance what you are likely to spend on gas by comparing your mileage to the EPA Fuel Economy Estimates on the window sticker. Check websites like KBB.com to learn costs of ownership you won't be surprised down the road.
4) Don't Rush Your New Car Purchase!
To save time, do your shopping during the week. It will probably be faster to get through the sales process on a slow weekday than on a busy weekend.
Keep a poker face, and don't let your excitement over a specific vehicle make you a victim. Be prepared to walk away. There is no such thing as “now or never,” and it's likely you can find a similar car on another dealer’s lot. If you don’t think you’re being treated well, you can ask for a different sales person. If that doesn't work, you can always find another dealer. Have a resonable bottom line: the dealership needs to cover its costs and pay the salesperson’s commission, but if you feel they’re not being fair to you, you can most certainly find another car on another lot on another day.
5) Do Bring Your Kids!
Let your kids help with the test drive: Can they open the doors to get in and out of the back seat easily? Can they operate the controls to get in and out of the third row (if the vehicle has it)?
If you have small children, bring their car seats with you so you can make sure they attach easily and safely. Bring the stroller or other large items you normally carry to ensure it all fits into the trunk. If you're actually planning to buy at that time, be sure to also bring activities and snacks to keep them occupied while you're going through the purchase process.
6) Do Contact Your Insurance Agent Ahead Of Time.
Check with your agent to learn the insurance rates of the vehicles you're shopping for before you actually buy.
It might seem backwards to check with your insurance agent before you actually purchase a new car, but if you knew the premiums were going to be sky-high for a certain vehicle, would you be inclined to choose a different model or trim level? For example, would it affect your purchase if you were to discover a significant difference in the premium between the two- and four-door versions of a specific model, or that one trim level might cost less to insure than another?
7) Do Check Your Credit Rating And Financing Options In Advance!
Don't be surprised by high rates when you reach the financing department.
Before you walk onto a dealership lot and fall in love with a shiny new car, it’s important to know your credit score; otherwise, you risk the potential heartbreak of being told you don’t quality to finance your gorgeous new ride. If you're a member of a credit union or other financial institution, you can even get pre-approved for a vehicle loan, and use that to negotiate better rates at the dealership.
8) Do find a Certified Female Friendly Dealer!
Once you have a vehicle in mind, go to the Zip Code Search on the AskPatty.Com® site for an AskPatty.Com Certified Female Friendly® dealership near you.
Once you find a location, check out their company web site. Most dealerships have a listing of their new and used vehicle inventories so you can do some searching for the car you are seeking to purchase. All new car dealerships have their own web site, so searching on the Internet by the name of the dealership or by product brand name you are researching should be easy.
9) Don't Trade In A Car That's Worth Less Than You Owe On It!
When that happens, the balance of your old loan will be rolled into the new car's loan amount, combining the debt of two cars into one, larger, loan.
Save discussions about trade-ins until the end of your negotiation process. The price of the car should not be determined by the vehicle you have to trade in, so consider that a separate transaction. Only after you settle on a purchase price should you start negotiating the terms of a potential trade. Price your car ahead of time using services like KBB.com, Clearbook.com, or CarMax.com, so you have a good idea of what it should be worth ahead of time. Remember, if you don't like the trade-in value you're offered for your car, you might get more for it by selling it yourself or taking it to CarMax.
10) Don't Base Your Purchase On Monthly Payments!
Instead consider the total purchase price after sales tax, and then evaluate the monthly cost.
Once you know your total price, financing the car should cost about $20 a month for 60 months for every $1000 financed (for buyers with good credit), so keep that in mind when you’re looking at the bottom line. Most car pricing services also offer pricing estimators to help you know ahead of time what it will cost to finance your purchase. If you have quotes from other dealers, use them as leverage in your current negotiation. Having a target transaction price in mind before you visit the dealership is important, and where your advance research will help the most.
11) Do Join a Club!
If you're a member of an organization that offers an auto buying program -- like Costco, Consumer Reports, USAA, or American Express, or even your insurance company -- use it!
These affinity groups work with a network of dealers who provide incentives and offer exceptional guaranteed pricing and service if the car is purchased through that group. These pre-negotiated discount programs have been arranged to help group members save hundreds, and even thousands, of dollars off the purchase price: check to see if you belong to any and let their buying power reduce your purchase price!