Gird Your Loins: How to Buy a New Car and Feel Good About It

Gird yourself for the car buying battle. A new car is statistically the second largest purchase you make in your lifetime, with your house being the first. That means that colossal amounts of time, energy, and money are all going to go into making that purchase happen (especially money). You’ll be attacked by fatigue, helplessness, inhuman service representatives, and overwhelming amounts of information. You’ll be plagued by every degree of despair known to man. You’ll be tired. Irate. Bewildered. And yet? You can win. You don’t have to be another casualty of the car buying battle, where more gladiators end up conquered by buyer’s remorse than not. All you need, as in any other type of war, is a bulletproof strategic plan at hand.


The Plan


1) Research Your Vehicle Online

  • Decide what you want your vehicle for. Are you carting a family of 5 around? Are you doing inner-city driving? Are you looking for a sportier ride to just have fun with? Do you need something different from what you currently have or something roughly the same?
  • Decide what brands you’re interested in. Luxury premium vehicles offer different features and price points than non-luxury premium vehicles. Are you a Volkswagen enthusiast? A Honda-lover? What characteristics do you most value in a car? Do you want to spend tons of money for a nameplate, or are you hoping to get the most bang for your buck?
  • Pick three cars you’re interested in. Choose your top three and figure out what model years you want. Newer model years will often include greater advancements in luxury and technology, but you may like an older model year for its different style and different price point. Meaning, its significantly cheaper price tag.
  • Decide if you’re trading in. Are you getting rid of a car in order to get the new one? Most dealerships will accept trade-ins and use their value as the down-payment you put on the new car. This is a good way to get immediate equity back, but you may find more value in keeping the car or selling it elsewhere. Trade-ins are extremely convenient but you often lose money on the sale of your vehicle by submitting to them.

2) Know Your Finances

  • Know what you can afford. Be realistic with your financial state of affairs. Find out what you can afford as a down-payment. Will you be able to put $2,000 down? $10,000? Will you be able to buy outright? If you’re trading in a vehicle, that money can be used towards your down-payment- but remember, it might not be much. Don’t get a car that doesn’t fit your finances, as this is a sure way to guarantee regular heartburn over the course of several years.
  • Know your credit score. What’s your credit score look like? Your score will affect what sort of APR you can get on a loan. You can ask your bank to send you your credit score, and be aware that dealerships will try to take advantage of you if it’s low.
  • Know the APR you want. The APR is the amount of interest on your total loan that you’ll pay annually. A lower APR means a lower monthly payment, so you want your APR to be as low as you can get it. Be aware that your APR may change based on what type of car you’re buying (new, used, etc.). It will sometimes be lower if the car is brand new, as opposed to a previously-owned car from the last model year.
  • Know how long you want your term. Typically, the longer the term the shorter your monthly payments are. However, that also means you pay more in interest for your loan. Most people do a loan of over 4 years, but the length of your term is up to you.

3) Selecting Your Car

  • Match your finances with your car. You’ve already researched a few cars that you’re interested in, and you should have a top three. Do those top three fit your finances? If they don’t, you may need to readjust your choices. We’ve said it once and we’ll say it a hundred more times: be realistic with yourself.
  • Test drive your top three. You’ve done your research online, and you know your finances line up pretty well with the cars you’re interested in. Now? Go try them out! Do multiple test drives, check out multiple colors, look at the features included, experience different trim levels. Test drives are free and as long as you make time to do them you can do as many as you want wherever you want.
  • Choose the car you want. Narrow down your list to the model of car that best fits your finances and your needs. You will then need to decide what trim level you want (which will affect the price tag) and what color combination you want with it. Most trim levels will have a variety of exterior and interior color pairs to choose from.

4) The Hunt

  • Build your menu. The best way to approach buying a car is to build out the menu you want to see before you ever step foot in a dealership. To build out a menu you will need the following components: sales price, tax percentage, estimated title and license fee, down-payment, APR, and length of term. A sample menu looks like this: Sales Price: $15,000, Title/License: $495, Tax (9.5%): $1,472.03, Down-payment: $2,000, Total Financed: $14,967.03, APR: 3%, 48-Month Payments: $331
  • Know what you can pay and what you want to pay. You can check the Kelley Blue Book value of the vehicle you’re interested in to see what sales price might be reasonable, if not the same as the one listed. Title/license fees and tax fees will vary from dealership to dealership, so make sure you are relatively flexible on those numbers, and that you’re prepared for them to change.
  • Get pre-qualified with your bank. You’ve got the car you want in mind. You’ve got your menu. The best way to make sure your APR is where you want it to be when you go into a dealership is now to get pre-qualified for your loan with your bank. You don’t have to actually use that loan with your bank, but it will help with negotiating the loan terms when you do walk into a dealership, and you can always fall back on it if you need to.
  • Search nearby dealerships for THE CAR. Now you’re ready to get in touch with a dealership. Check out the inventories of multiple dealerships nearby and take a look at what they are selling your car for. If you need to adjust your menu based on this research, do so. Feel free to also begin communicating with dealerships online to see what sort of pricing they’re willing to offer. In some situations, all of the haggling can be done completely through email, and you would only then need to go into the dealership to confirm everything and sign the paperwork.

5) The Buy

  • Pick your dealership. Reach out to your selected dealerships in the area. To save time when you do walk in, you can do a finance application online and get your credit check out of the way early. If you like working over email, you can begin your negotiations with these dealerships online with the menu you’ve built. Be very specific about the car you want and the numbers you’re looking at. Or, make an appointment with your preferred dealership and do those negotiations in person. Either way, be sure to read reviews about the dealership and perhaps even give them a call. Know what sort of company you’re getting ready to do business with. Remember: not all dealerships were created equal.
  • See the car in person. When you arrive to make your deal, ask to see the car. If it’s pre-owned, you may want to take it for a test drive as well, and check for extra dings, dents and scratches. If you see something out of the ordinary, you may be able to haggle your price down even lower because of it. Ensure that your preferred colors, features, and trim level are adhered to. If you love it, walk back into the dealership with your sales representative and begin your purchase.
  • Have your own paperwork with you. If you have made any negotiations over email, print those emails out and bring them in with you. Print your menu out. Print your credit score out and bring in your paperwork saying that you’ve been pre-qualified with your bank. Bring entertainment if you’d care to- sometimes the process takes a long time. A really long time.
  • Beware of sales department add-ons. Know that accessory, destination, and other miscellaneous fees often get added on to the total sales price. Don’t be afraid to negotiate with your sales representative about these fees, especially if you’ve already received a sales price online. For the most part, they’re completely unnecessary and can be waived.
  • Beware of finance department add-ons. After you’ve signed the paperwork and made the deal, you will have to go through the finance department as well. There are often packages offered by the dealership that cover additional warranties and services, which you may choose to add on. These are almost always optional, however, and you are free to pay the price you’ve already agreed to without adding any extra. Be firm about it.
  • Drive it home and treat it nice. Congratulations! You’ve made your deal and you have your new car. If it’s truly brand-spanking new and has no miles on it, make sure you are doing your regular oil changes and that you’re prepared for your 30,000, 60,000, and so on mile check-ups. If it’s used, do the same, plus some.

The Results

If you’ve successfully made it through our car buying strategy guide, you should be golden. Buying a new car is often a giant pain in the rear end, not only because haggling is part of the process, but also because car dealerships are often slow to catch up to digital marketing trends and tend to use outdated and painfully frustrating techniques. Don’t give in. Research, prepare, and plan ahead. Your dream car? It’s not so far out of reach. If you’re careful, diligent, and responsible, you’ll have it sitting in your driveway in no time- at the price you wanted, and with buyer’s remorse kicked firmly to the curb. Happy shopping.