Buying a new car is one of the biggest credit purchases a person makes, next to buying a home.
When you're in the market for a new auto, it makes sense to do some research before you ever go to the car dealerships. Researching your options can help you can find the best deal on the vehicle you want, at terms that you can afford.
When searching for a new car, start off by considering what makes and models you are interested in. You also need to be realistic about what price range you can afford. There is no sense in searching for a car that you can't afford to buy. Once you have the basics in mind, you'll need to compare cars and prices from multiple local dealerships.
For a quick and easy comparison of the dealerships, use the free price quotes at Edmonds.com or Cars.com. You can even get price quotes from multiple local dealerships without ever stepping foot on a car lot. You'll also find specific vehicle information, comparisons, and consumer ratings, as well as information to help you negotiate your best deal. Edmunds also has information on rebates and incentives, financing, insurance, resale values, in addition to calculators to help you estimate payments and determine to true cost to own the vehicle that you have in mind.
Unless you're buying a vehicle outright (which isn't an option for most people), you'll need to compare financing to find the best terms and rates available. Contact local lenders directly and then compare the rates and terms they offer with what the dealership has to offer. When comparing financing, you need to look at more than just how much you'll pay each month. You also want to consider the interest rate and how long it will take to pay off the loan.
Some dealerships run TV and radio ads offering really low interest rates on certain makes or models (don't you love those awesome deals). What you need to realize is that certain conditions usually apply to these offers. Most of the time, the asking price will be non-negotiable, so you'll have to pay the full sticker price. You may also have to pay more money down in order to qualify for the financing.
If you're interested in one of these special deals, be sure to think about whether it will best suit your circumstances. You might find that it makes more sense to pay a higher interest rate on a lower-priced vehicle or find one with a lower down payment.
Once you find the car you want to buy, some dealership may also push you to buy credit insurance. This will insure that your loan will be paid off if you become disabled or die. If credit insurance is optional, check first to see whether any of your other insurance policies would cover you. Usually, the credit insurance offered with the auto financing is an expense that you'll never recoup. If the dealership requires credit insurance in order to finance you, it must be included in the total amount financed when buying a new car.
Lastly, before leaving the dealership in your new car, review the contract to make sure there are no mistakes and everything has been filled in. Then request a copy of the signed contract to take with you when you drive off in your new car.
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