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FG Trade/Getty Images August 26, 2022 Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to take control of their finances by providing clear, well-researched information that breaks down otherwise complex topics into manageable bites. Bankrate logo The Bankrate promise
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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. 1 Determine how much you can afford
The key to a successful buy is to first determine . Your credit score, monthly income and the type of car you want should all factor into this decision. The key is to strike a balance between fitting your budget and finding a car right for your needs. When budgeting, look at the , not just the sticker price that you see advertised. The true out-the-door price is the entire cost that you will be expected to pay, including dealer fees and taxes. Once you have that number — or a suitable estimate — factor in your typical salary and take advantage of a , which will help you determine what the monthly cost to finance the vehicle will be. Lightbulb Bankrate tip Car ownership comes with so be sure you have room in your budget for any extra expenses. 2 Save for a down payment
The for your future vehicle is the initial lump sum that you pay for it. Aim to cover at least 20% of the purchase price, which might take some time. Being patient and saving up for a is likely worthwhile if you can delay getting a car until you have the funds. It will save you money overall and lower your monthly costs. If you can’t wait, you can make a lower down payment. However, you may not get a good rate with your lender. In this case, consider a less pricey vehicle instead. The less you pay overall, the less you will need to save for a down payment. 3 Take a look at your credit history
If this vehicle is your first large financial investment, it is possible that you don’t have a lengthy credit history. If this is the case, check your credit history to determine what loan options are available. Your credit score is the primary factor lenders consider to determine the interest rates that you will be offered. The better your credit, the more favorable your interest rate will be. Check your credit score before talking to a potential dealer. You can do so online through or for free at . It is worth waiting to get your credit in good shape before applying for vehicle financing if you can. 4 Decide what car is right for you
Choosing which vehicle is best for you takes a lot more consideration than just color or style. Consider other factors, such as the vehicle’s durability, size for your needs, technology, safety features, gas mileage and the weather where you live. Check out and for these stats — and extra information on how much the vehicle you are interested in typically sells for. This is also a good time to determine if you want a . While a new car is exciting, certified pre-owned (CPO) can give you a lower price tag while still boasting new features and a manufacturer-backed warranty. And if you aren’t in a bind to get behind the wheel as soon as possible, you can save money by waiting for . 5 Prequalify for financing
After you gather some information on the type of vehicle you wish to purchase and your financial history, apply with lenders that offer prequalification. This step is vital to saving money and putting you in control when it comes to choosing the best financing option available. Prequalification, or , differs from full approval, so even after the prequalification process ends, it’s not a done deal. Rather, preapproval will give you an idea of potential rates and terms. You will still have to fill out a formal application after, but you will have an idea if you can afford it ahead of time. You will need the following when you apply to prequalify: Average income and finances. Personal information. Employment information. Any current debt. 6 Head to the dealership — in person or online
After prequalifying for a loan and setting your sights on your dream car, it is time to begin the car buying process. Ideally, you should to see what vehicles are available in your area. Most dealers have their inventory listed on their websites and allow you to set up appointments. It is important to get behind the wheel of your potential car and take it for a test drive before you buy. Be sure to adjust the seat, measure if it fits in your garage and can handle your day-to-day routine. But you are not limited to the dealers local to you. Online dealers like Carvana, TrueCar and Vroom give you access to a national inventory of used cars. You can browse and get financing without leaving the house, and when you pick a car, you get up to a week to test drive your car and have it . 7 Negotiate
Negotiation can feel intimidating but getting the best deal comes down to standing up for yourself. Come prepared with any paperwork needed, a firm understanding of your credit history and to ask. But the bottom line is this: be prepared to walk away if you can’t get the deal you deserve. When the time has come to close the deal, remain steadfast on the agreed-upon number. You can expect the dealer to push for . Say no to options like fabric or paint protection when an add-on like gap insurance might be more useful. Next steps
Negotiation can feel intimidating, but getting the best deal comes down to standing up for yourself. Come prepared with any paperwork needed, a firm understanding of your credit history and to ask. Focus on the purchase price, not the monthly payment. And be prepared to walk away if you can’t get the deal you deserve. When the time has come to close the deal, remain steadfast on the agreed-upon number. You can expect the dealer to push for . Say no to options like fabric or paint protection when an add-on like gap insurance might be more useful. Learn more
SHARE: Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to take control of their finances by providing clear, well-researched information that breaks down otherwise complex topics into manageable bites. Related Articles