1. Review your finances
Does buying a car fit into your budget? Whether you’re financing the vehicle or not, make sure you include all the factors associated with owning a car – the payment, gas, insurance and maintenance – in your overall budget.
2. Review your buying options
It’s important to consider not only what you want, but also what you need in a vehicle. Consider how the vehicle’s insurance and fuel costs will affect your budget. It’s also important to understand the pros and cons of buying a used or a new vehicle, or even leasing. Don’t forget to include the documentation fees and taxes.
3. Get pre-approved
Getting pre-approved for your vehicle loan will help you know your interest rate, and subsequently your payment. Having this information can be helpful when you enter negotiations with a salesperson, as you’ll know your financial limitations, which can help prevent a poor financial decision.
4. Find and buy your vehicle
When you head to the dealership, be prepared and ask questions. Check out Kelly Blue Book and NADA to familiarize yourself with prices and to know what concerns to look out for. If you’re buying a used vehicle, buying at the end of the month often means you’ll get a better deal, especially if the dealership has had the vehicle for a while. If you’re buying new, the best time to buy is in December, near the end of the month. However, if you want the previous year’s model, buy in late January.