Car Buying: Five Steps to Getting the Best Deal on Your New Car

Couple buying car

Everyone loves driving a new car, but before you cruise out of the parking lot, make sure you are getting the best deal for your money. Drive away with a bargain by following our easy "know before you go" car-buying checklist.

Five-Step Checklist for Buying Your New Car:

Set a budget. Take a look at your savings and budget to determine how much you can afford to spend. Remember to consider any changes in insurance, maintenance, and fuel costs. Decide whether you want to purchase a new or pre-owned vehicle. The price you pay for your new car can vary a great deal depending on a down payment, the term of your loan, and the interest rate.

Do your research. Check reviews and road tests of various models, compare vehicles and check safety information. Learn the invoice price, manufacturer's suggested retail price, and the average selling price of the cars you're considering to determine a fair target price.

Secure financing. A dealer's "special" financing may be tempting, but keep in mind that you may not qualify, and you might need to forgo other incentives or rebates that might work out to be a better deal. Getting preapproved for an auto loan1 at your credit union or bank means you walk into the dealership with the amount you can borrow and the interest rate in hand. That knowledge boosts your negotiating power at the dealership--because financing is already in place, you only need to focus on the purchase price (and your trade-in, if any).

Time your purchase. Dealers tend to reduce prices at the end of the month, model year, and calendar year to manage their inventory and make room for newer models. If you can wait until the end of a model year or even the end of the month, you may drive off with a better deal.

Keep an eagle eye on the paperwork. Always read all the documents carefully, make sure the numbers match what you've agreed upon and look for any additional charges. Get any promises in writing, such as free installation of accessories.

Stop Dreaming and Start Driving

With this checklist, you'll be better prepared for a great deal when you visit the dealership. By choosing a vehicle that fits your budget with a terrific financing plan in place and at a great price, your only concern will be where to drive first.

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