Buying a used or new car at an auto dealership is both exciting and scary. You have to be able to find the car you like and then negotiate the price. Doing it well could save some drivers thousands of dollars.
As far as major purchases go, few are as exciting as buying a new car at a dealership. The process can be fun if you know how to navigate it.
Don’t get led astray on your route to a new ride, though. It’s important to study up on how to buy a car from a dealership.
Commonly posed questions include:
- What do I need to buy a car at a dealership?
- What tips are there for buying a car at a dealership?
- How do I negotiate the price of a new car?
Perhaps one of the most important tips is not to get caught up in the thrill of buying a new car. When you start to think with your heart instead of your head, you’re liable to make some big money mistakes.
How Do I Research Buying a New Car?
When you purchase a vehicle from a dealership, you should do your homework.
There are many resources available to those who are interested in buying a new car, and most of them are accessible via the Internet (or local library). For example, various news outlets provide annual listings for the best cars on the market.
Car ranking websites can help, so finding a third-party opinion on any particular year, make, or model poses little challenge to the technologically inclined.
This is also a handy tip if you are considering trading in your vehicle when making the purchase. By studying the market values for your trade-in, you’ll be able to know whether the dealership is robbing you blind with their offer.
The savviest auto shoppers know just how much the cars are worth before they head to the lot. They accomplish this by looking at several vendors and shopping around.
Can I Get My Own Loan When Buying a New Car?
Many of our families have taught us that buying a car requires you to take out the financing option offered by the dealership, but this isn’t always true or the best idea.
In fact, it’s an insider secret that many dealerships make huge profits in their financing offices. The banks offer them a cut of the deal when the buyer finances the vehicle at the dealership.
Sometimes factory-sponsored events and amazing credit unions really do offer the best deal, but you won’t know this if you haven’t shopped around for auto financing.
Rather than blindly take chances on your budget, get a preapproval from your bank, credit union, or car insurance company. Having this can help the dealer understand that you aren’t joking around. As such, they are likely to offer you a better deal!
Getting the pre-approval is fairly straightforward. The applicant fills out a few online forms and gets the answer shortly thereafter. With the online approval, you’ll be able to request a check or put the financing down on the car of your choice.
Another pro tip is to check your credit score before you do any of this. If you have bad credit, getting a loan to buy a car will be difficult. You may need to put down a large down payment, find a cosigner, or take out a high-cost loan.
Should I Get an Insurance Quote When Buying a New Car?
Everybody buying a new car from a dealership should talk to their insurance agent before making the purchase.
The agent can inform you of how much the insurance would be on the type of vehicle you’re aiming to purchase. This is important to know because if the insurance is too high, you might want to pass on the car you thought you wanted.
It all comes down to the dollars and cents. Buying a car at a dealership is pricey, especially when talking taxes, fees, down payments, and monthly payments. If the car insurance premiums put you over budget, you won’t be a happy camper.
Additionally, insurance companies can sometimes outdo dealerships on certain types of coverage such as GAP insurance or vehicle service contracts.
Cash is NOT Always King
When buying a car at a dealership, you may not want to go with auto financing. Instead, you could pay with cash.
The last thing you want to do is waltz onto a car lot boasting about the stacks of cash you have in your pocket.
The salesperson may take you for a sucker if you do. Instead, appear undecided on whether or not you will pay for the car with financing. Some offices negotiate better when they believe a loan is involved. You can save the details about the cash payment for later.
Additionally, if there are any really good loans available (i.e., zero percent), you might be better off saving your cash for a rainy day.
Buying a Dealership Car? Read the Fine Print!
There are plenty of buying a car at a dealership horror stories out there. From them, we can take away a few lessons.
For example, it’s a good idea to read the fine print very closely when making major purchases, especially when putting thousands of dollars down for a new automobile.
Don’t be afraid to skip the add-ons.
Some dealerships intentionally talk fast and spit out numbers so that the transaction becomes kind of confusing. New car buyers and people who are intimidated by quick math get flustered, and assume the salesperson is operating with the customer’s best interest at heart.
They’re usually not!
Ask for the list of fees to be itemized in detail. Question every single fee if you have to. It’s your right to know what you’re paying for. If something doesn’t sound right, ask if it’s required. If they say it is, research that fact.
The experts suggest that one way of managing this is to keep every step of the car purchase separate in your mind. First, there’s a car selection. That’s different from financing. The trade-in you want to offer is another deal in and of itself!
Note how many of these dilemmas can be avoided by shopping around.
What often happens is your community has a well-known dealership (or there’s only one in town). Then, everybody goes there. It feels normal, but what if the dealership a few towns over offers better deals? Don’t miss out because you were hasty in not checking around.
Never Skip the Test Drive
Skipping the test drive when buying a car at a dealership is not a good idea!
First of all, test driving vehicles is one of the best parts of the experience for many people. Secondly, you can’t be sure the car operates well, especially if used, without a test drive.
Mechanics claim that a ten-minute drive around the block can reveal more about a car’s true state than months of online reading could do.
There are plenty of signs to look for when test driving a car that will indicate whether this particular year, make, and model is “the one.”
Questions to ask yourself while doing a test drive:
- How is the car moving, steering, and sticking to the road?
- Is the engine vibrating or making noise?
- Are there any funny sounds, smells, or leaks?
- Do you like the radio system?
- Is the car big enough for your needs?
- Is the car sluggish when accelerating?
- How are the brakes?
- Do you feel physically comfortable behind the wheel? Not all cars are built for people on the taller or shorter sides!
- Do you like driving the stick shift or automatic version better?
- Does this car suit your style?
These are just a few considerations to make when shopping for a new or used car at a dealership. Prioritize the concerns so that you are prepared to make an analysis when test driving the vehicle.
Other Car Dealership Purchase Quick Tips
There are some other tips we can offer for those looking to buy a car at the dealership in the near future.
Don’t bring the kids.
It can be tempting to pile the family into the minivan and head to the car dealership. You’ll be there a long time, the kids will have fun, and you can teach them about buying a car.
That being said, you might not want to bring young children to the dealership. They can get fussy and distract the buyer from the details of the purchase. Additionally, some salespeople will be super friendly to small children, earning your trust when it isn’t fully warranted.
Brush up on your math skills.
Don’t be afraid to bring a notebook and work out the figures by hand or with a calculator. Buying a car at a dealership is a huge financial decision, and it requires care on the part of the consumer.
Take a mechanic with you.
Taking a mechanic with you to the car dealership feels like something illegal, but it isn’t. If you have a friend or family member who knows cars and/or sales, take them along for the ride.
On the other side of the coin, if your partner in crime is impulsive, hotheaded, or not good in business situations, consider telling them to stay quiet during the transaction or encouraging them to stay home.
Alternative Ways of Buying a Car
Buying a car at a dealership isn’t the only way to obtain a vehicle. If the “how to buy a car at a dealership” portion of this post has you second guessing the move, know there are other options on the table.
For example, even at the dealership, shoppers could inquire about leasing a vehicle instead. A lease is like agreeing to rent the car from a company instead of owning it. People like leases because they often offer affordable monthly payments and ownership isn’t a requirement.
This can feel silly to some people who would rather own the physical vehicle. Those who advocate for leasing suggest that after a couple of years, cars become a money pit anyway. They would rather drive something newer and dependable so long as they can afford it.
Beyond the dealership, some car shoppers turn to other methods for purchasing a car, especially if they cannot afford a dealership purchase.
These options include the auto auction and private sales. Buying a car from the auto auction, however, is a huge gamble. Many of the vehicles there have problems, and since you can’t test drive them, you’re really unaware until you’ve paid.
On the other hand, private sales can be a good route to go for older and used cars, especially if you’re handy under the hood or have cash set aside for surprise repair bills.
It’s unlikely a shopper will find a new, dealership-quality vehicle for sale in a private sale.
On the downside, private sales require upfront cash most of the time, and there is risk since the transaction rarely comes with a guarantee or warranty.
Don’t Get Taken for a Ride!
At the end of the day, consumers deserve to be able to purchase cars at auto dealerships without feeling like they’re getting thrown to the sharks.
By doing their homework before they head out to the auto lots, car shoppers can ensure that they are making a fair purchase.
If not, the car may find itself in the junkyard instead of cruising down the expressway.