The process of finding and then buying a new or used vehicle can be an exciting experience. But it can also be long, confusing and exhausting — especially if you don’t know what to expect and prepare yourself for the challenges ahead.
If you’re in the market for a new or used car, we recommend that you follow these steps to help make sure you get the best deal possible.
Know your budget
If you know roughly how much you can afford to spend, you’ll be better equipped to narrow down which cars are within your price range. Once you have a general idea of what kind of vehicle you want, check out pricing information on individual models before visiting dealerships asking for quotes.
Have your credit score on hand
One of the biggest factors that will influence which cars you can afford is your credit score — and how much money a potential lender feels you’ll be able to repay toward the loan. You can get one free copy of your credit report each year. Check your credit score and report at least a couple of months before you plan to buy your new car. If you find any errors, work on getting them resolved or removed before attempting to buy a car loan.
Work out how you’re going to finance it
One of the biggest decisions you’ll need to make is working out how you’ll finance your new car. If you have the funds on hand, you might want to pay for it outright in cash. If you don’t, you’ll need to look into your loan options. You may want to consider taking out a loan through the bank you already have an account with, or it may be worth checking out other options in your area, like car finance. It’s also worth looking into if the dealership has its own financing plans. Make sure to compare all your finance options, not just at that moment but in future too to make sure you’re getting the best deal.
Proceed with caution
If you don’t know much about cars, use this as an opportunity to educate yourself. Test-drive several different models and make a list of their pros and cons to determine what’s important to you. Then visit the dealership armed with all your research and knowledge about pricing so that you’re ready to negotiate.
Get prequalified for a loan
Although it definitely can’t hurt to try negotiating with dealerships on price, the bottom line is that the car you want could likely be out of your budget if you don’t have financing secured. Get prequalified before you negotiate and take a test drive so you know how much you can afford and feel confident about your purchase.
If you’re not prequalified for a loan, dealerships still may accept your offer — but the chances are much slimmer that you’ll get the best deal on your new or used car. If you have an excellent credit score and pay a larger down payment, the dealer may be able to work with you.