5 Steps to Buying a New Car

It is very easy enough to get caught up in one of several mistakes or carefully-laid salesman traps when you are going out shopping for a new car. Buyer's remorse for buying new cars is a strong and common occurrence that, unfortunately, often doesn't start to kick in until after that new car smell has started to wear off.

Fortunately, with a little preparation and a lot of self-determination and resolve it is possible to greatly minimize any chance that you will get stuck either with the car you don't want, or paying too much for the car you do want. Five simple steps, when followed, can help ensure that your new car-buying experience is a smashing success.

1. Research your car thoroughly. Mistake #1 made by many people going out to buy a new car is to only have a vague idea of what they want. They want a Toyota or a Ford, or a Hyundai, or a Cadillac. Maybe, even more specifically, they want a Toyota Prius, a Ford Mustang, or a Hundai Elantra, or a Cadillac Escalade. All of this is but the beginning of the information you should know before you set foot anywhere near an auto dealership to allow a salesperson to fill in the rest. Using the Internet is a great tool for pre-purchase research of everything and you should know everything about your car before you choose it. Colors, both exterior and interior, the options that you are interested in, and what the Manufacturer's Suggested Retail Price (MSRP) is for the car(s) you're interested in buying.
2. Build up a down payment to save money. Your down payment for your car will act to save you money in three ways: 1. The larger your down payment is, the more negotiating power you will have to actually bring down the final price of the vehicle. Dealerships are impressed by the idea of receiving extra cash up front. 2. It reduces your loan amount which saves you interest, and 3. A large enough down payment (usually 20% or more) will typically offset the depreciation of the vehicle and allow you to avoid becoming upside down in your loan, making it much easier for you to sell down the road if you should need to.
3. Secure financing before you go. This is a great way to lose money when buying a new car - relying on dealer financing. Not all dealers are crooks and liars, but many of them will use your reliance on them finding financing for you to take advantage of you and jack up the price of the car by making you pay extra for financing. When you have to rely on the dealer for financing, they are doing you a favor, rather than the other way around (you're the one buying from them, remember?). The best way to stay on top of the negotiation process from start to finish is to show up at the dealership with a preapproval in hand from your bank or credit union. This will also serve to give you extra negotiating and buying power.
4. Shop multiple dealers. Not all dealers are alike, and you should not limit yourself to one when buying your car. Competition in this case is healthy, because different car salespersons will offer you different incentives, rebates, and options in order to win your business and if you shop at least two dealers (and let them know you are doing it), you will incentivize their best offers out of them in a hurry.
5. Don't get sweet-talked into extras. One of the most common and dirty tactics tried by many dealerships comes when you have to sign the paperwork for actually purchasing the car. They will print out sheets and sheets of paper by the dozens for you to read and sign, and some of it is likely to include extras that you don't need. They will often make it seem like buying this stuff is normal and required, like the taxes they'll be hitting you with at this time, but don't fall for it. Keep your eye out for extras like fabric protection, VIN etching on your windshield, or gimmicks like paying for gas or car alarms or wax jobs and just rolling the price into your purchase today. That means you'd be financing these things and believe me, it is far, cheaper to just tell the dealer "no" and go out and purchase that stuff on your own independently later if it is what you really want.