Ten Things You Need to Know Before Buying a Car

Ten Things You Need to Know Before Buying a Car
Ten Things You Need to Know Before Buying a Car
Education
| Dec 17 2021
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You Need To Research When Buying a Car

Bringing home a car can be overwhelming. What kind of car should you get? What make and model? What color, trim level, and transmission? New or used? Should you lease or buy? And these decisions are just the beginning.


On top of the choices you will need to make on the actual car, you will also have to decide how you will pay for your new ride. Will you buy it outright, or do you need to secure financing


Car dealers know how stressful this can be, and they are prepared to take advantage of you and pressure you into making decisions on the spot. But being prepared can make all the difference. If you do your research and shop around a bit, you will be less likely to make an impulsive decision. 


Here are the 10 things you need to know before you buy your next car


#1 – What you want

It's important to know exactly what you want before you ever step foot in a dealership. Think carefully about what make and model you want. What is your budget? There are many resources out there to help you decide what car is right for you. Publications like Consumer Reports and Car and Driver routinely rate and review cars to give you an impartial idea of what car might be best suited for your needs.


Are you a commuter who needs good gas mileage? Do you have a large family and need something safe and reliable? These resources can help you decide what makes the most sense for you.


Depending on which vehicle you select, you may have options of transmission, trim level, and color. Look around and see what you like most, keeping in mind that certain add-ons come with a price tag.



#2 – Details about the car you've picked

Once you’ve narrowed down what you are interested in, do your research. Do you know anyone who has that car? Talk to them and get their opinion. Go on YouTube and find video reviews of the car you are interested in. You can even take a virtual test drive on YouTube to get an idea of how the car drives. Look at J.D. and Associates and Consumer Reports to see how reliable the vehicle is and what types of repairs are common. This will help you be confident that you are making a good decision.


If you are looking at used cars, be sure to research the actual car you are interested in. Getting a CarFax report is a great idea. A CarFax report will list how many owners the car has had, the mileage, and list any accidents the car might have been involved in. Just because a car is being sold at a reputable dealership, it doesn’t mean the car is problem free. 


#3 – What it should cost

Once you decide what you want, it’s time to shop around. Compare prices. Start with Kelley Blue Book or Edmunds to get a good sense of what a fair price will be. Use the car value tool to find out what the MSRP is and get a range of what dealer prices might look like. Having a range of numbers will help you negotiate when you go into dealerships.


#4 – How you will pay for it

Before you set foot in the dealership, you should have a plan for how you want to pay for your new car. Do you have the capital to buy it outright in cash? This is always a good negotiating tactic that can reduce your price tag. If that’s not an option, decide how much you can put as a down payment. Experts recommend putting down 20%. Making a down payment will increase your chance of getting approved and can even secure a better APR.


Getting pre-approved for financing may help strengthen your negotiating position. A pre-approval means that a lender has looked at your credit report and history and has given you a preliminary APR. This transforms you into a “cash buyer”, which is good for several reasons. 


First of all, the salesmen can’t try to inflate your monthly payment with unnecessary fees. You have already secured financing that they can either accept or try to beat. This protects you from dealer markups on APR as well, which is very common. Essentially, being a cash buyer makes you a more serious customer. Pre-approval also gives you an excuse to not fall for any last minute dealer add-ons and extended warranties. You can simply say that you are approved for a certain amount and cannot go over that. 


Take note that getting pre-approved will cause a hard pull on your credit score, so only do this if you are 100% serious about moving forward and purchasing a car.



#5 – Your credit score and history

If you will be financing your car, your credit score and history are incredibly important. Obtain a copy of your credit report before you even set foot in a dealership so that you know what type of loan candidate you are. Your credit score is the most important factor in your APR and approval chances, so you want to be sure your credit is in good shape.


When you obtain your credit report (you can get your report for free three times per year, once from each major credit agency), thoroughly review it. Look for any inaccuracies and if you find anything that is incorrect, report it to the agency immediately. If your credit score is looking a little weak, you may be smart to hold off for a few months on getting a new car and focus on improving your score. Wait for any new credit inquiries to fall off of your report and make sure your payments are on time to get your score higher.


If you already have a vehicle loan, refinancing your loan may be a good move to reduce your APR and monthly payments. This can increase your credit score in the long term if you are able to make more consistent on-time payments. If refinancing sounds like a good idea, Auto Approve can help you get started with a free quote today.


#6 – What paperwork to bring

Now that you have done your research, you are ready to visit the dealership. Go prepared with the documents you need. Look around online and select a reputable dealership that has what you want but also has high customer satisfaction ratings.

Be sure to bring the following:


  • Financial Documents. If you got preapproved for any loans, be sure to bring that paperwork. You will also need your proof of income and financial history, which may include pay stubs and banking information. 
  • Proof of residency.
  • Your current vehicle’s information, including the title. This is only necessary if you are interested in trading your car in. 
  • Information on the vehicle you want. Bring all of your research on the car you are looking at. Include prices from other dealerships and any other deals or incentives others are offering; this can be valuable in negotiating.


If you come to the dealership prepared and organized, it will show the dealers that you are serious and well researched, which can make them take you more seriously.



#7 – How the car drives

Do a test drive. It’s always a good idea to take your potential purchase out on the road. Be sure there are no rattles or squeaks that may make you nervous when you drive off the lot. This is especially important if it’s a used car. Bring along a friend or family member who is familiar with cars if you don’t know what to look for. 


#8 – The value of your trade-in

If you are looking to trade in your current car, know how much your car is worth. Go to Kelley Blue Book and Edmunds to look up a fair price. Kelley Blue Book has an Instant Cash Offer feature that will immediately give you a sense of what your car is worth. If the dealer tries to low ball you, decide whether or not selling your car on your own is an option. It might be a bit more work but sometimes the trade off is more than worth it. 


#9 – Your rights as a consumer

Before signing any papers, make sure you understand the warranty and return policies on the car. Research if your state has any lemon laws that can protect you if the car is defective.



#10 – Know that you shouldn't settle (and how to say "no")

It’s important to remember that you always have options and you should never settle. Buying a car is a huge decision, and aside from buying a house, it is one of the biggest financial decisions you will make. Be sure that the car you are getting is exactly what you want, and if it’s not, don’t be afraid to walk away. 


And those are the top ten things you should know before buying a car.


The more prepared you are, the better off you will be when buying a car. And that usually translates to getting a better vehicle for you, while saving more of your hard-earned money.


If saving money sounds good to you but you’ve already purchased a new car, Auto Approve can help! By refinancing your auto loan, we can reduce your APR and lower your monthly payments.


Get a quote today to get started.


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