5 Steps to Take Before Buying a New Car

1. Research the Car You Want

There is so much information available on the internet, and you should use it to your advantage. Doing research about the vehicle you want is one of the very first steps you should take when thinking about buying a new car. It’s the best way to learn about your options, compare similar makes and models, and ensure that you’re opting for the best car for you.

Look at details such as safety ratings, cargo space, and how the vehicle performs in various climates and road conditions. As you’re going through the features, consider your specific needs and wants. Do you need something that gets good mileage for commuting? Do you need room for carpooling or want something that you can take off-road? Or maybe you’re looking for a hybrid or electric vehicle.

Once you’ve narrowed things down a bit, investigate what the current manufacturer’s suggested retail price (MSRP) is for your top choices. You should also look at those of cars similar to the ones you want, as well as what cars are currently available at the dealership you’re planning to visit. This will prepare you for negotiations later on.

2. Determine How Much Car You Can Afford

When looking for a new car, it can be easy to get excited before looking at the price tag, but you have to consider what you can afford. Having a good understanding of your finances beforehand can help you make more realistic decisions while looking for a car and shopping for a car loan. It can also allow you to factor those potential payments into your budget before you go to the dealer.

If you’ve figured out your monthly payment and it’s a little bit outside of your budget, that doesn’t automatically mean you can’t get the car you want. It just means you’ll have to save a little bit to do so. This is one of the many benefits of planning well before making a big purchase. It prevents you from making unwise financial decisions. Make use of your savings account and give yourself a few months to save up so you can make a larger down payment and comfortably afford your monthly car payments.

3. Know Your Lending Options

Car buying and banking go hand in hand when you plan to take out a loan for your new vehicle. Car loans are the leading way people finance their cars when they can’t pay the full price up front. Loans allow you to make monthly payments on the total cost while having the car in your possession. One of the most important parts of getting a car loan is making sure you partner with a financial institution you can trust.

As a member of MHV, you’re eligible to apply for a car loan with flexible terms and competitive interest rates. You may also have access to potential discounts. Choosing a great lender before you head to the dealership helps simplify the buying process and sets you up for success once you’re ready to buy.

4. Get Pre-Approved for a Car Loan

The next step is to get pre-approved for your car loan. You might expect this step to come after you’ve been to the dealer and decided on your car, but getting pre-approved for a car loan beforehand has many benefits. It could be one of the most important steps you take in the car-buying process.

For starters, pre-approval shows car dealers that you’re serious about buying, which can entice them to offer you a better deal. Pre-approval will also allow you to lock in your interest rate up to 45 days before you actually buy your car. Since auto loan rates fluctuate, getting pre-approved has the potential to save you a lot of money. It can also create an easier and faster buying process, as determining financial eligibility can be one of the most time-consuming parts of the buying process.

5. Prepare a Negotiation Plan

Negotiating is one of the most important, and for some the most stressful, parts of the car-buying process, which is why you should go into it with a plan. Figure out which tactics you can use and how you’ll make sure you secure the best deal possible. Luckily, when you take the previous steps on this list, you’ll already have a few negotiating techniques up your sleeve.

Knowing the MSRP of the vehicle you want is one of the first pieces of information you’ll want to have ready. It will let your car dealer know that you’re a knowledgeable car buyer and that you’ve done your research. You’ll also want to let your dealer know that you’ve already been pre-approved for a car loan because it shows them that you’re in a situation to buy a vehicle that day—if the price is right. Lastly, be prepared to walk away. After taking all these steps, you’ll know what you should and shouldn’t buy, and shopping around can work to your advantage.

With a little forethought and preparation, you can find the perfect car, secure a great car loan at a credit union, and get an excellent deal at the dealership. Get started today.