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Car Buying Tips

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key with car keychain on pile of money on contract and pen to sign

Start by figuring out what's right for you.

Shopping for a car can be complicated and time-consuming. It involves balancing your desires with your economic reality, deciding whether to buy or lease, and knowing what is the best deal for you. To make the process more efficient and improve your chances of driving away happy, you will need to consider:

Save For a Down Payment or Total Car Cost?

While it is possible to buy a car with no money down, you will end up paying a lot more for it if you do. The more you borrow, the more the car will ultimately cost.

To decrease the amount you finance, it is wise to make a significant down payment. With enough savings, you may be able to purchase a car outright (typically an option when buying a used car, rather than a new one).

Effective saving begins with first determining how much you want to save, then setting a reasonable date to achieve your goal. Using an automatic deduction can make the process easy. You can arrange with your financial institution to have a set sum deducted from your checking account and automatically deposited into savings.

New, Used or Lease?

After you determine how much you can afford to spend, the next step is to decide between buying new, buying used, or leasing. It is important to be familiar with each option’s positive and negative aspects.

Financing Options and Implications

Because financing increases the total cost of the car, the loan you get is very important. Make sure you understand the following aspects of the loan agreement before you sign any documents:

There are various financing options available to you when you purchase a vehicle. Be sure to look at all of them and choose the one that best fits your needs.

Shop for the Best Deal

The total amount you will pay for your car depends on its price, the annual percentage rate (APR), and the length of the loan. When shopping for the best deal:


To get the best price on your new car, you will often have to negotiate with the salesperson. Developing your bargaining skills will be worth it to you in the end, as it can often save you 10 to 20 percent of the advertised price. You may be able to negotiate a particularly good price on overstocked or less popular cars.

But remember – a deal isn’t a deal if you end up with a car you don’t really want. Sometimes ordering a car will save you more money then negotiating for one on the lot, as you won’t be paying for unnecessary options.

Trade In Your Old Car

If you already have a vehicle, you will likely be selling it and using the profit to pay for all or part of your new car. To get the best price, make sure you know your car’s worth. Check reference books or the Internet to know its value. Try Kelley Blue Book and NADA. After that, you have two options:

  • Your Needs – Think about your transportation requirements. Does your car need to be large enough for a family of five, or small enough to fit in tight city parking spaces; tough enough to haul firewood, or chic enough to drive clients around?
  • Your Wants – Your desires certainly play a part in the car buying decision. Make, color, options, and style are all important to being happy with your final choice. Read car magazines and websites for ideas.
  • Your Budget – It is easy to get carried away and end up with a car that is out of your price range and a monthly payment beyond your capacity. Your budget, not a salesperson’s opinion, should dictate your decision. Review your income and expenses to see what you have available each month for auto expenses.
    • Exact price you’re paying for the vehicle
    • Amount you’re financing
    • Finance charge
    • Annual percentage rate (APR)
    • Number and amount of payments
    • Total sales price
    • Don’t be fooled by an advertised low monthly payment – if the length of the loan is long and the interest rate high, you will be paying more than you may have to.
    • Be wary of extremely low promotional APRs. Though you may qualify for particularly low rates by making a large down payment, it may be more affordable to pay higher financing charges on a car that is lower in price or to buy a car that requires a smaller down payment.
    • Look for manufacturer’s incentives. Dealers may offer cash back on specific models.
    • Sell the car yourself. You will usually get the best price this way, but will have to allow for the time it takes to sell, as well as the effort of placing the ad, talking to and seeing a lot of people, and negotiating with buyers.
    • Trade-in to the dealer. This is often the easiest option, though typically not the best deal. To ensure you get the most from a trade-in, do so only after you’ve negotiated the best possible price for your new car.

Our affordable car loans offer you the same low rate whether your car is new or used.

  • Related Resources

    See More Resources

  • Buy or Lease Your Next Car?

    Making the decision to lease or buy your next car depends on the type of driver you are and what kind of vehicle you want.
  • Negotiating a Deal

    Once you’ve decided on a car, it’s time to talk about price and a deal that suits both you and the seller.
  • Types of Financing

    There are various financing options available to you when you purchase a vehicle. Be sure to look at all of them and choose the one that best fits your needs.