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What to know before buying a new car

What to know before buying a new car?

Most car buyers make the mistake of relying strictly on their emotions or their wants when they shop for a new car. A case of “I like it, I buy it” with little preparation or research. To get the best deal, though, you should adopt a more systematic approach, one that is designed to keep you away from the most common pitfalls of buying a new car.

In this article, you’ll find out how to choose a new car that will tick the most important boxes based on your needs, and what are the right steps to buying a new car. With a little preparation and by keeping your emotions from dictating your choices, you’ll avoid buyer’s remorse and prevent yourself from overspending on your new car.

Decide if you want to buy or lease

The first step of your car-buying journey is deciding between buying and leasing. What are the differences?

The main benefit of leasing is the fact that you can afford a better car for the same monthly payment or you could buy the same car and pay less every month. With leasing, you’ll also get a new car every three years and you won’t have to worry about maintenance or repairs, both of which are covered by the dealership. So what’s the catch? No matter how many payments you make, you’ll never build any equity while leasing – as the name suggests, you don’t actually own the car that you’re paying to get access to, you are merely borrowing it in exchange for a monthly fee. That means that as soon as you stop making payments, they’ll impound the car. You’re stuck with having to pay forever.

With buying, you’ll afford less car for the same monthly installment, but when you finish paying off the car loan, you own the vehicle forever. That way you can drive it “for free” for a few more years and when you decide to upgrade to a new car, you can trade it in and get a discount.

You opt for leasing if you want to have access to the newest models and tech, and you don’t want to deal with the hassle of car ownership. You go for buying a car if you are more financially responsible and you want to build equity with every payment that you make.

Get pre-approved

If you’ve decided to go for leasing, or if you will pay the car fully out of your own money, skip this chapter. But if you’re looking to get a car loan, you need to get pre-approved even before looking for a new car. Why?

Because getting preapproved will make your budget crystal clear to you and it will stop you from overspending. It will also help you get the best car loan on the market for your needs, one that is likely significantly better than anything dealerships will try to sell you. The more car financing options you have, the better the final terms of your deal will be.

You can find very useful tips and tricks to help you land a better car loan deal on our blog.

Research models and features

Now that you know how much car you can afford, it’s time to decide on the sort of models and features that best suit your needs.

Fuel type

 There are three main categories to choose from when it comes to what powers your car:

  • Internal combustion – these are your classic gas and diesel cars. They still make up the majority of new cars ordered in the US because they have a long range and they benefit from a great gas station and service shop infrastructure.
  • Electric-powered – gaining in popularity and with more models released every year, an electric car is less expensive to drive on a day-to-day basis and less likely to break down. They have higher prices, though, and their value is tied to the health of their battery pack.
  • Hybrid – combining the best of both worlds, hybrids offer the same independence as cars powered by internal combustion engines but come with lower emissions and better fuel economy.

Choosing between the three types of propulsion is a matter of analyzing your particular needs and your local infrastructure. It might make sense to buy an electrical car if you drive in an urban environment in California, but less so if you venture off-roading in Montana.

Vehicle safety features

Modern cars come with exceptional safety features. You can get perks such as Automatic Braking, Lane-keeping Assist, Blind-Spot Detection, Collision Warning, Adaptive Cruise Control, Rear Cross-Traffic Alert, or Lane Departure Warning to name but a few.

Lately, almost every manufacturer offers some sort of advanced safety features with their base models, but some are better value than others. Before you look at more superficial things such as a car’s exterior design or its engine, familiarize yourself with the brand-new safety technology that is available out there. See what you would like to get from your future car and sift through models based on that, first.

Connectivity and entertainment

Huge leaps have been made in terms of connectivity and entertainment tech in cars. You’re almost guaranteed to get a touchscreen in every new model nowadays, just as you’re likely to get Apple CarPlay and Android Auto.

Spoiled for choice, buyers should consider how these technologies will age and they should experience using tech-ridden vehicles scenarios they’re likely to encounter in the future. A car with full-touchscreen commands might sound good in theory but if the touch breaks, you won’t be able to control much until you have it fixed. Also, a button is fast and easy to press whereas a touchscreen menu, as intuitive as it might be, still takes you a while to navigate, keeping your focus off the road.

Strike a balance between what’s cool and what’s easy to use plus durable.

The right model for your needs

If you want to maximize your chances of getting a great deal, then you should consider more than one model. Ideally, you’ll pick between three and five models from multiple manufacturers, after you check as many car reviews and ratings as you can find online.

The more options you have, the more dealerships you’ll be able to approach and try to get a good price or a good features package. Most car brands offer a model to suit every need, with the main differences being pricing and aesthetics.

Since you already know your budget and the list of must-have features, all you have to do is figure out your ideal car class and you should find a few models that have the power you’re looking for and whose exterior design delights you.

Find the right price

You’re now close to contacting dealerships, but still not there yet. You still have two more preliminary steps to complete before you actually set foot in a dealership. The first is figuring out what a good price is for every model that you’re looking for.

The sticker price is often negotiable, even on new cars, and you can find lots of information online on what the final price for a model is, at any particular time. Even better, you can also find what free perks and features some brands are offering.

All you have to do is spend some time on car forums that cover the models you’re looking to buy. Read threads and don’t be afraid to ask questions – most owners will gladly brag about the deals they got.

Figure out the trade-in value or start the process of selling your old car yourself

Finally, the last piece of preparation you should do before heading to the dealership is figuring out what is the trade-in value of your current car, if applicable.

A good rule of thumb when dealing with car salesmen is to always do your own research and never take what they say at face value. The more informed you are, the less likely they will be to take advantage of you. See how much cars that resemble your trade-in go for and then either sell it yourself or have the dealer give you a fair price for it.

Ask for offers and research dealerships

Since you already know exactly how much car you can afford, if you’re buying or leasing, the models that fit your needs, and the real value of your trade-in, now it’s time to get in contact with a few dealerships and ask them to send you their offers.

It’s a good idea to begin your interaction with them online because that way you can get a feel for their pricing structure and their professionalism without being pressured to make a decision.

Check Google and other third-party review sites to find out more about the reputation of the dealerships that appeal to you initially. Avoid sellers with a bad rep, even if their prices are a bit lower than others.

Test drive the models that you’re interested in

When you find a few models that suit your needs and come at a reasonable price, the next step is to test-drive them. It’s vital to see how a car handles and feels on the road before you buy it.

To make the most out of your test drive make sure to:

  • Schedule it during the week when dealerships are less crowded. That way you can get the salesperson’s undivided attention and you won’t be rushed.
  • Drive the car in as many settings as possible. Try taking the car for a ride inside the city and then out on the highway. See how it feels in stop-and-go traffic and at high speeds. If you plan on using the car off-road, check if the dealership will allow you to also test it in that environment.
  • Park the car a few times. Try lateral parking and also back into and out of a parking spot so you can see how easy the vehicle is to park in multiple scenarios.
  • Be as critical as possible. If something feels off during your test drive, don’t ignore it. Chances are that the problem will only bother you more and more as time passes.

Don’t rush a test drive, it’s only when you get some hands-on experience with a car that you can decide if the model is right for you or not. You’ll have more suitable candidates on paper than in reality. A test drive is the only way to pick the perfect car for your needs.

Negotiate the whole package, not just the price

Most car buyers pay close attention to a car’s sticker price, and they forget two important aspects. First is the fact that the sticker price is not the same as the final, out-the-door price, which is generally around 10% extra. And the second is that you should negotiate the entire package when you buy a new car, not just its price. To get the best deal make sure to:

  • Guard yourself against unnecessary add-ons such as advertisement fees, extended guarantees, etc.
  • Try to get as many free perks as possible (free maintenance, road assistance, features, etc)
  • Get a fair quote for your trade-in
  • Have at least three offers for auto loans and car insurance before you visit the dealership
  • Take your time to understand each addition to the contract and to the total price, don’t be afraid to leave the dealership if you feel pressured into signing something that you’re not completely comfortable with

Finalize the deal

If you’re happy with the car and you have successfully negotiated a good deal for it, it’s time to finalize the sale.

Before you sign the contract, read it carefully one more time. It’s best if you have the dealership email it to you so you can take your time reviewing it at home, without salespeople breathing down your neck.

Ask as many questions as you want and make sure that no extra fees or add-ons have been added to the total price. If everything checks out and you feel confident that you have a good grasp of all the clauses in the contract, sign it and the car is yours. Just remember that before you leave the dealership, you’ll likely need to get car insurance for your new car.

Consider buying a used car or a CPO

A great way to make the most out of your money is to buy a used car, especially if it’s a Certified Pre-Owned (CPO) model.

A CPO comes with the manufacturer’s backing, effectively keeping you safe from the most common problems associated with second-hand cars such as fake mileage, hidden damages, or theft records. And, considering that cars lose between 20 and 30% of their value in the first year of their lives, CPOs also come at a far better price than brand-new cars. 

Not all used cars qualify to be awarded the Certified badge by the manufacturer. In fact, the restrictions are quite limiting, making sure that only the best second-hand cars get to the inspecting and reconditioning process that precedes the CPO status.

To read more about the benefits of Certified Pre-Owned vehicles, check out the articles on our blog.

There are two parts to buying a new car. One has to do with what happens before you step foot into the dealership – getting preapproved, researching models and dealerships, finding out what’s a fair price for your trade-in. The other is knowing how to deal with salespeople so that you get a good final price for your new car and you stay clear of expensive, unnecessary add-ons.

What to do before buying a new car? Know the car market, know your budget and take your time at the dealership so that you don’t get pressured into spending more than you want to.

FAQ

Is it worth buying a new car in 2024?

It depends on your financial situation. New cars can be considered a luxury if you take into account how steep is their depreciation curve in the first two years of their lives. 

Can I get a car loan when buying a new car?

Of course. All car loan providers favor new cars as collateral, so you’ll get the best APRs and loan conditions when shopping for a brand-new vehicle.

Why is test driving important?

Because that is the only way to see how the car feels and handles on the road. On paper, almost any car can sound enticing, but that can all change as soon as you step behind the wheel. Make sure to test drive any car before you buy it.

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