A car is a major purchase, possibly the largest one you have ever made. As you approach this process, it is important to know what to do and how to do it. Being an informed consumer will help you to get the best possible car at the best possible price. Here is our checklist, intended to help car buyers who are new to the US. It will help to guide you through the process of getting a car that is right for you.
First: Are you buying a new or a used car?
This is usually the first decision you will need to make. The answer to this question depends on your income and your credit. If you have a higher income and good credit, you may be able to buy a new car. But if you are on a tight budget, or your credit is not ideal, a used car may be the right choice for you. Once you have made the new vs. used decision, the buying path splits. Let’s start with buying a new car.
Buying a new car: all new cars are alike
If you are shopping for a new car, keep in mind that new cars of a given make and model are all identical, no matter which new-car dealer you choose to shop at. They are fresh off the assembly line, and have had no previous owners. This means that you can focus on getting the best deal from the best dealer, and wherever that is, you will be getting the exact same car.
Here are some new-car buying tips that will guide you through the process:
- Decide which type of car is right for you: Car, truck, or SUV? Small, medium or large? Mass market brand or luxury?
- Do your research online: Read the reviews, comparison tests, and reliability ratings.
- Pick a few finalists: Two or three choices are enough, and don’t get hooked on a specific vehicle yet.
- Test drive your finalists at local dealers: Take a through test drive on all the types of roads you will normally drive on. The car should be comfortable, easy to operate, and have enough power and features for your needs. Do not discuss prices or purchasing at this point.
- Decide which vehicle or two you prefer: Your test drive should help you narrow your selection down to one or two.
- Configure your chosen vehicle(s) and find current incentives: Use the manufacturer’s website to choose the trim level and options you want. This will tell you the MSRP, or retail sticker price of the vehicle(s). The site will also give you information on current cash offers and other incentives.
- Check the local market pricing: Car shopping sites like Kelley Blue Book, True Car, or Edmunds can tell you what other buyers have paid for the car(s) you are shopping for.
- Locate the car you want: Check the manufacturer’s and local dealers’ websites for vehicles in their inventories that match what you want.
- Check your credit, figure out the right payment, and get preapproved: Checking your credit score will give you a good idea of the interest rate you will get on your car loan. The better your credit, the lower your rate. Next, use a loan calculator to figure out the right loan term and payment for your budget. Then you can apply for a loan and get preapproved, before you enter the dealership. Even if you’re a new U.S. resident without credit, Lendbuzz can help you here – contact us!
- Negotiate the price of the car at several dealerships: Using the local market prices you have found, visit a few dealers that sell the brand(s) you are shopping for. If you don’t want to take the time to do this, you can do it by email or through the dealer’s website. Tell them that you are shopping for the best price on the exact car that you want. Also ask them for the interest rate that they would offer you for financing your purchase, and compare it to the rate you have been preapproved for. Continue negotiating until the car prices and the interest rates don’t get any lower.
- Take the best deal and close it: Select the best combination of car price and financing rate, visit the dealer, do the paperwork, and drive away. Remember to bring your driver’s license, proof of insurance, any funds needed for a down payment, and your preapproved loan information, if relevant.
- Drive away happy!
Buying a used car: no two used cars are alike
Once you enter the world of used cars, you will quickly realize that each one is unique and different from all of the others. They have been driven varying numbers of miles, they have had one or several owners, and they may have led lives that were pampered or abused, as well as everything in between. The key to buying a good used car is to find the one that has been treated the best, driven the least, and fits within your budget.
Here are some used-car buying tips to help you navigate this unfamiliar landscape:
- Decide on the type of car you need: Small, medium or large-sized? A car, an SUV, or a pickup truck? A luxury brand or something from the mass market?
- Research thoroughly online: Check out reviews, driving impressions, and especially reliability ratings and maintenance/repair costs.
- Narrow it down, but not too much: Remember, the condition, mileage, and previous care of a used car count for a lot. Keep your options open.
- Check the market pricing: Car shopping sites like Kelley Blue Book, True Car, or Edmunds can tell you what other buyers have paid for the used car(s) you are looking at.
- Look up your credit score, figure out the right payment, and get preapproved: Checking your credit score will give you a good idea of the interest rate you will get on your car loan. The better your credit, the lower your rate. Next, use a loan calculator to figure out the right loan term and payment for your budget. Then you can apply for a loan and get preapproved, before you enter the dealership. Lendbuzz can help you here – contact us!
- Thoroughly inspect and test drive each prospective used car: Check the condition of the interior, exterior, the under-hood area, and the tires. Take an exhaustive test drive on lots of different types of roads, including rough and bumpy ones, as well as highways. The car should feel solid, accelerate smoothly, corner confidently, stop quickly, and not make any disturbing noises. It should also not have any bad smells, severe rust, or other obvious problems. All of the basic systems and electrical/electronic accessories should work properly.
- When you have narrowed it down, have the car inspected by an independent mechanic: This will cost a few bucks (somewhere around $100), but it is an excellent investment. A thorough inspection by an independent third party will give you the real lowdown on whether this used car is worthy, or if it is about to become a money pit that you should steer clear of. If that’s the case, walk away and keep looking.
- Negotiate the price of the used car: Use the local market used-car prices you have found, along with any problems that the car may have, to negotiate a better price with the seller. You may ask the seller to make any necessary repairs as part of the deal. Otherwise, deduct the cost of the repairs (your inspection mechanic should give you this information) from the negotiated price. If you are buying the used car from a dealer, ask about a warranty. Also ask them for the interest rate that they would offer you for financing your purchase. Compare this to the rate you have been preapproved for.
- Close the deal: Using the lowest financing rate, do the paperwork. You will need to bring your proof of insurance, driver’s license, down payment, and preapproved loan documents.
- Drive away happy!