If you want to get a new car, don’t even go near a showroom until you’ve done your research. You’ll get a better deal if you go in knowing not only what you want, but what you can afford and what the dealer paid to get the car on the lot in the first place. Here are things to think about when buying a new car:
Your Credit and Financing
Know your credit score and shop around for auto loans. You never know—your local bank or credit union may have a better deal available that a dealer can offer.
What You Can Afford
When you’ve got a picture of the going rate for auto loans, do the math on how much you can afford. Calculate how much you can put down, find out your old car’s value, look at your monthly budget, and determine what kind of monthly car payment you can squeeze into it.
Models, Features, and Invoice Prices
Many automakers’ websites let you play around “building your own” car, adding or subtracting features and options. For instance, you can customize your vehicle to have manual or automatic transmission or rear-wheel, four-wheel, or all-wheel-drive. Then, you can see what the “manufacturer’s suggested retail price” would be. But you never want to pay the MSRP—settle on what type of car you want, and find out from online sites what the “dealer invoice” price was. If you walk in knowing the invoice price, you’ll know a good deal from an inflated one. While you are mixing up your preferred combination of options, check the site for rebate offers or coupons, and if you choose their car, make sure the dealer comes through with them.
Timing
You’ve heard that certain times are better than others for buying a car: dealers need to meet monthly sales goals, and toward the end of the model year they want to clear space for the newer cars coming in. Month-end and the end of the model year are good times to buy, and so is the end of the calendar year. Sales are usually slow, and you might get a good deal from a salesperson eager to close out the year on a successful note.
Resale Value
It may seem odd to think about selling or trading in a car you haven’t bought yet, but resale value should be a consideration in your choice. Think about whether you plan to own your new car until it can’t go anymore, or if you want to cycle through another new car or two over the next few years by trading in or selling whatever you’re going to buy now.
Your chances of getting a good deal are better if you’re well prepared. If you’ve considered these things to think about when buying a new car, and you know what you want, what you can afford, and what the dealer paid, you’re ahead of the game.
