Key Takeaways

• Avoid spending more than 20% of your monthly income on car expenses.
• Research and test drive the car you want.
• Shop around for loans and get preapproval before going to the dealership.

If you’re planning to buy a new car, it’s important to consider factors such as cost, financing options, and negotiation strategies before heading to the dealership. These seven tips will guide you through the car-buying process.

7 Steps to Buying a New Car

Learn how to buy a new car effectively by following these steps:

1. Figure Out Affordability

Don’t choose a car you can’t afford. Calculate the monthly payment and other expenses related to car ownership.

2. Decide Between Buying or Leasing

Consider your preferences and decide whether you want to buy or lease a car.

3. Research Car Options

Visit automaker websites and independent auto information sites to research and compare features and prices.

4. Determine the True Cost

Consider additional costs like gas, insurance, repairs, maintenance, and taxes.

5. Get Financing in Advance

Compare auto loan rates and get preapproved before visiting the dealership.

6. Test Drive the Car

Spend enough time test driving the car to ensure it suits your needs and preferences.

7. Negotiate the Price

Come prepared with research and negotiate the best deal with the dealership.

Current State of the New Car Market

New car prices are near record highs due to supply and demand issues. Borrowing costs have also increased, affecting financing amounts. Prepare to spend more on a new car but use the above tips to save money.

Next Steps

Ensure your finances and credit score are in order. Assess your budget and find the best financing deal before starting your search for a new car.