New car buying tips

Much of the car buying process is common sense. You must know your budget, get your trade-in appraised (if you have one), and be prepared to walk away from the negotiations if they aren't working for you. But some aspects of the car buying experience are murkier than others, especially when it comes to financing.

Discuss the numbers one step at a time

Negotiate the price of the car before you discuss financing or the value of your trade-in if you have one. It's easier to understand the actual cost of the car if you go through negotiations on the new vehicle first. Some dealers may even try to offer deals based on the monthly payment you tell them you can afford — but that's not always to your advantage. Learn more about how to negotiate the best deal when buying a new car.

Shop around for financing

Interest rates make a big difference over the life of the loan, so it can be worth getting a few offers from banks and financial institutions before you even go to the dealer. Getting a better deal on interest — even just a fraction of a percentage point — can add up in the long run, so don't accept the dealer's offer without considering your options.

Double-check your loan document before signing

Lenders make money when you pay interest over time — and the longer you pay interest, the more they make. As a result, some loan agreements charge penalties for early repayment of the loan. If you're able, paying it off as soon as possible is a smart way to save money over the long run, so make sure your lender doesn't penalize you for early repayment. Learn more about how to buy a new car.

Other new car buying tips to consider

While financing is a crucial part of the car buying process, it's not the only thing to consider. Other tips for buying a new car include:

  • Consider less popular brands: If you're looking for a brand new car, you might try looking at discontinued models or less well-known brands. Often, these cars are cheaper than their current or more popular counterparts but can be just as safe and reliable.
  • Patience is a virtue: If you've got your heart set on a particular car, but the price is too high, consider waiting to buy. Market conditions like supply shortages or production slowdowns can drive up prices.
  • Preparation can pay off: Do your research, know your budget, and be prepared to make an offer on the car you want when the price is right.
  • Use the market to your advantage: Low supply and high demand is a double-edged sword. While those market conditions can make a new car more expensive, your trade-in will also be more desirable.
  • Timing is critical: Even if the car you want isn't in low supply or high demand, timing is crucial in how dealers price their vehicles and make deals. Prices tend to vary seasonally, and dealer flexibility on price can be affected by the dealer's desire to meet sales goals and incentives from the manufacturer. Learn more about the best time to buy a car.
  • Flexibility can get you a better deal: Know what features you want or need in a car and be flexible about the rest. Choosing a lower-trim package may be less expensive than committing to a higher-end package that includes extras you don't need.