Get Your Finances Ready
Set Your Budget: Think about the full cost of owning a car—this means not just the sticker price, but also taxes, registration, insurance (get some quotes!), gas, and future maintenance. As a helpful guideline, try to keep your total monthly car costs under 25% of your income.
Down Payment: If you can, try to put down 20%—it helps lower your loan and the interest you’ll pay.
Financing: Getting pre-approved for a loan at your bank or credit union can give you peace of mind and help you shop with confidence.
Do a Little Homework
Needs vs. Wants: Figure out what you really need (like safety, reliability, enough doors) and what would just be nice to have (like a sunroof or heated seats).
New vs Used: Used cars usually cost less but could need some repairs. New cars have warranties but lose value quickly. Certified Pre-Owned (CPO) cars can be reliable options and there are warranties available for used cars from companies like Endurance or CarShield.
Used Car Values: Quickly book out the value of a potential used car, gather the VIN, exact mileage, and trim level. Enter this data into consumer valuation tools like Kelley Blue Book, Edmunds, or CarGurus to instantly find the car's trade-in, private party, and retail values.
Vehicle Check: Don't Skip This Step (especially for used cars)
Vehicle History Report: Request a CARFAX or AutoCheck report to check for accidents or other hidden issues.
Test Drive: Take the car for a spin in both city and highway settings. Pay attention to how it feels, how it brakes, and listen for any odd noises.
Independent Inspection: If you can, have a mechanic you trust give the car a quick checkup before you buy.
At the Dealership or Seller
Negotiate: It’s normal to negotiate, so don’t be shy! Focus on the total “out-the-door” price, not just the monthly payment.
Insurance: Compare insurance quotes before you buy—the price can change a lot from one car to another.
Paperwork: Take your time to read everything before you sign. It’s okay to ask questions if anything isn’t clear!