Around 15.5 million cars and light trucks were sold in the U.S. last year, according to Statista.
Unless buying a car online from the comfort of your home, you may find the car-buying process daunting. It might be as unpleasant as filing taxes or pulling teeth.
Visiting a car dealership can be especially stressful if it’s your first.
If you’re in the market for your first car, here are 16 things to know before starting.
Take Your Time
Don’t rush through the process. If you’re tired of borrowing other people’s cars, the temptation to get something quickly might be irresistible. But it’s never a good idea to rush a car purchase. That’s especially true if you’re buying a vehicle for the first time. While the process is stressful for many, taking your time, researching, and patronizing reputable car dealerships will make a big difference. It might even be enjoyable. However, it won’t be if you’re impatient.
Decide What You Want Before Shopping
Before heading to a car dealership, you should know what you want. Do you need a specific type of vehicle? If you have a big family and a pet or two, an SUV, minivan, or crossover might be on your list. You’ll find it easier to navigate the process if you know what you want. Don’t settle for a two-row vehicle if you need three rows for your use case.
Set Your Budget
Set a budget…a realistic one. The best-case scenario is to buy the car you want in cash. That way, you won’t be locked into a multi-year financing arrangement. According to Bankrate, the average monthly payment for new cars is $735. The total loan amount and payback period are, respectively $40,634 and 67.62 months. Remember to be realistic with your budget. Going too high might leave you with a debt albatross while going too low might leave you carless.
Get Financing Lined Up Before Visiting Car Dealer
Before trotting down to a car dealership, ensure your funds are in order. Again, paying cash is the best way. But if the plan is to finance the purchase, get financing from a financial services institution. If approved, you’ll know how much money you have to work with. It’s in your best interests to get financing from your bank over the car dealership since the latter may cost more.
Consider Your Financial Situation
Beware of tunnel vision when buying your first car. Some consumers focus solely on the monthly payment. They believe that if they can afford the monthly amount, they can afford the vehicle. But this isn’t always true — especially if the loan is spread out over many years.
According to NerdWallet, the most common car loan lengths are 24, 36, 48, 60, 72, and 84 months. But it’s also possible to get loans as short as 12 months and as long as 96 months. Consider how long it might take to pay off the loan, the interest rate, and unknown factors like your job situation or health in the future.
Figure Out the Features You Want
Knowing what make and model you want is vital — but so is knowing what features are essential. You might be fortunate to find a specific make and model that already includes the technology and features on your must-have list. Otherwise, you’ll pay more to add them.
Find the Right Car Dealership
Finding the right car dealership to patronize is essential. According to a survey by KPA, most consumers don’t trust car dealers. The “2024 KPA Dealership Trust Survey| finds that 76% of Americans have no faith in car dealerships being truthful about pricing.
As for other findings, 34% have faced pressure tactics to buy add-ons, 30% agreed to a price but found hidden fees when signing the document, and 28% felt the salesperson was attempting to trick them into buying a vehicle.
That’s why you must find a reputable car dealership. Ask people you know, read online reviews, and be prepared to visit multiple dealers before finding one you’re comfortable with.
Decide Whether to Buy New or Used
Should you buy a new car or a used car? One reason to consider a used vehicle is, of course, the lower cost. Kelley Blue Book reports that the average listed price for a used car in June was $25,251. That’s down $400 from the prior month. You can score a great deal and get a used vehicle for a manageable amount. But if going that route, you should get a mechanic to comprehensively inspect the car before rather than after buying any used car.
Depending on the source consulted, the average cost for a new car in the U.S. could be around $20,000 more than the figure above for a used car. Whether you buy a used vehicle or a new one will depend on your budget and other factors.
Take the Car You Want for a Test Drive
After finding the car you want, take it for a test drive. Your best bet is to go without a car salesperson chirping in your ears while putting the vehicle through its paces.
Drive the car at different speeds on roads and highways. Brake hard when it’s safe to assess the braking system. Don’t let anyone rush you into a quick five- or 10-minute test drive. Request half an hour or more. Remember that the test drive doesn’t replace the need for a pre-purchase inspection. If the test drive goes well, you can get the inspection.
Don’t Be Afraid to Haggle
If you accept the car dealership’s price without making at least one counteroffer, you’re going about things the wrong way. No matter what a car salesperson tells you, there’s room to nudge the price downward. If they play hardball, call their bluff by getting up to leave. That might be enough for a car salesperson to make some concessions to ring up the sale.
Don’t Tolerate Aggressive Sales Tactics
According to the KPA survey cited earlier, around 7 in ten people say they’ve been pressured to buy add-ons. It’s one thing to offer the add-ons. But it’s another thing to force them on consumers. Don’t allow any car salesperson to back you into a corner.
Be Prepared to Get Up and Go Elsewhere
What should you do if a car salesperson plays hardball? Take your business elsewhere if need be. Bargaining doesn’t mean you’ll get everything your way. But if you negotiate in good faith, the car salesperson should reciprocate.
Delay a Final Decision
It might be worth your while to delay making a final decision. So, if you find the car you want, let the car salesperson know you’d like to hold off until the following day. Sleep on it. When you get up bright and early the next morning, weigh whether or not you want to go through with it.
Take Someone With You
Buying your first car can be a nerve-racking experience. That’s one reason to consider bringing someone along for the ride…literally and figuratively. They can give you advice, recommend questions to ask, and point out things you might miss.
Understand What Add-Ons Are Optional
Car dealers have a long list of add-ons they’ll try to sell you. While some may interest you, buying them is not a requirement. You might be pressured to select VIN etching, a wheel and tire warranty, rustproofing, an extended warranty, and other things. These add-ons can drastically inflate the car purchase price. Check the contract and reject add-ons you don’t want.
Trust Your Gut
Always trust your gut instinct. If something doesn’t feel right, walk away. You can check out as many car dealerships as you want before finding the one you want to buy a car from.
Buying Your First Car Is a Big Move
Buying a car for the first time is a major decision. Remember these 16 tips. They can make the process less stressful. You might even enjoy the car-buying process.
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