Car Buying 101: Take control of the process


If you’ve purchased a car at any point in your life, you know how big of a deal it is. You’re spending (presumably) thousands of dollars, signing lengthy paperwork, and trusting a complete stranger in the process, all with the intent of making a good decision, both financial and practical. Yeah, sounds easy, right? Keep reading to lend yourself the upper hand in car buying (video below for comedic value)!

First steps (do this before anything else!)

The best first steps don’t involve a dealer at all. First, you’ll want to identify your car buying budget. This is the most important piece, as the rest of your car buying journey will be predicated on this. During this step, you’ll also want to identify HOW you’re going to pay for the car. Ideally, you’ll get an auto loan check from your bank or credit union, which can be presented to a dealer or individual upon purchase. This check can be written up to a certain amount, depending on what your bank approved you for. These loans will typically have a better interest rate and will help you avoid the “shenanigans” that dealers tend to pull with in-house financing.

Next, you’ll want to decide on what year, make, and model of vehicle you want. You don’t need to decide on the specific car, but you should have it narrowed down to 2-3 different makes and models while knowing the year range you’re looking at. Your research should include all the things that are important to you, including reliability, fuel mileage, maintenance costs, space, safety features, horsepower, etc. Once you have all this figured out, you should check resources like Kelley Blue Book and Edmonds to see what these cars are roughly worth. This will give you a starting point for what you can expect to pay. If these values exceed your budget, go back to the drawing board!

Searching for your car

Now that you’ve identified your budget and a short list of potential vehicles, you should start shopping around on the internet. Yes, the internet only! Do not go to dealerships. Instead, conduct more independent research on your own time. Find some reputable dealers in your area and then see what cars they have in stock that match your criteria. Once you have a list of reputable dealers with some in stock cars and a loan check in hand, you can officially start the “test drive” process.

Visiting dealerships

I’m only going to talk about dealership purchases in this article, as that’s the most common form of car purchase in the U.S. Buying from a private seller is an entirely different beast, and we’ll talk about that another day. Also, the car buying process is intimidating, especially for a first-timer. With that said, it may be helpful to bring a responsible person along for the ride, preferably one who has bought/sold many cars. Lastly, you should check your state websites which normally have some car buying guides that talk you through your rights as a consumer and some dealer behavior to look out for. This is a huge asset and can’t be overstated.

Before visiting your first dealer, you’ll want to get your trade-in (if applicable) evaluated independently by someone like CarMax. This gives you a bottom line starting point for your trade value.

When arriving at the dealership, let them know that you were looking at a few cars on their website, and that you saw the internet price of X, and that you’d like to drive the cars. Once you complete test drives, ask them to put an official quote in writing including your trade-in (if applicable). This should give you a solid quote to go off of.

At this point, the best thing to do is walk out with your quote and go test drive other cars. You can use this quote to leverage the next quote and hopefully get a better price. If you spend a whole day doing this, you can normally get to a really fair price at each dealer (note that this is harder if you’re buying a highly desirable car). The more quotes you get, the better the deal gets. In order for this to work you have to be in a “don’t settle” mindset.

Disclaimer: the 2021/2022 car markets have been crazy, and negotiating a “great” deal is a lot harder than it used to be.

The final decision

Once you’re done wasting away an entire day and have settled on the car you really want, for the best price, you need to proceed with purchasing. This is the point where you scan the contract and ensure you’re not getting added warranty coverage, extra roadside assistance, etc. These things are all “add-ons” and are virtually nothing but profit for the dealer. Once you have verified that these are excluded, you should be looking for something like “unpaid balance due upon delivery”. This is the final out the door (OTD) price which includes all applicable taxes, fees, vehicle trade-in and payoff, etc. At the end of the day, this is the amount you’ll be writing your bank/credit union loan check for.

Admittedly, there are some things you’ll want to look out for while finalizing the deal.

  • They’ll try to convince you that their financing is better. Don’t fall for it. The only time this is true is on a new vehicle purchase with factory financing.
  • Last minute warranty sales. These are costly, and they’ll pull out all the stops to convince you that a blown engine in the first year will bankrupt you.
  • Ensure the vehicle has a clear Carfax report. This isn’t a guarantee that the car hasn’t been in an accident, but it does help.
  • Make sure the dealer completes their end of the deal, including any requested window tint, floor mats, full detail service, etc.
  • The dealer will try to get you to leave a Google Review before leaving the building. Don’t do this until you’ve had the car for a bit and can validate that you’re happy with the experience.

Now that we’ve gotten those out of the way, it’s time to complete the purchase! Once you’ve paid the dealer, you’re free to take the car home. Now is the time to sit back and enjoy your new set of wheels!

Closing arguments

This was a lot of information in a relatively short article, so I understand that this probably feels overwhelming. But at the end of the day, we’ll all go through this a time or two, and it really does get better with experience. Remember, if you need help, ask a friend or family for assistance. Having a “battle buddy” for a car purchase is a great idea! Good luck out there!

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