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  2. Basics of How to Buy a Car: Where to Start?


Buying a car is always a special experience, more so when it’s your first purchase. But the car buying process is not as simple as just walking into a showroom and driving your favorite car home. As a rational buyer, you must always conduct background research about the car you want to buy, check insurance prices, think about getting a good deal for your auto loan, and compare different dealerships to sweeten the deal further. 

So if you’re planning to buy a car anytime soon, we would highly recommend you to take time and do your research first. In this article, we’re going to take you through a step-by-step guide to buying a car. Even if this is the first time ever that you searched on the internet ‘how to buy a car’, you will find our detailed checklist easy to understand and follow through.

How to Buy a Car

Buying a car is not rocket science, but at the same time, it’s not as simple as heading to the supermarket and bringing home the things you want. 

Buying a car requires research, comparing quotes online and offline, finding a good buyer for your old vehicle if you’re trading-in, negotiating with the dealers, taking care of your car loan, and so on. There’s no single-step solution for this. You have to be well-informed of the current market scenario, and of course, very patient to take home the car of your choice at a great price.

How to buy online

Online car buying is a relatively new practice. The truth is, you cannot entirely depend on online channels for such a big decision. So you have to visit the dealership or your potential seller to test drive the car for yourself before you finalize. Meeting offline will also help you negotiate the price.

Where to Start: Main Guidelines

The internet can be an overwhelming place when you’re looking to buy a car. For both new cars and pre-owned cars, you can take a look at the following options to buy your vehicle online. 

  • Facebook marketplace search
  • Find car buy/sell  Facebook groups
  • Search Craigslist car section
  • Read online auto magazines
  • Visit car-buying concierge services and  dealership websites

For comprehensive, detailed, and unbiased reviews of latest SUVs, check out SUViews Reviews

Steps for Buying a New Car

In this section, we are giving you a clear roadmap to find the ride of your dreams. All you have to do is follow each and every step mentioned below, and you are sure to have a hassle-free and quick car buying experience. 

Let’s dive in!

Set up your budget

Now that you’ve decided to buy a car, it’s time to set up a budget. In the U.S., you can get decent cars starting from $15,000 onwards. The price goes up depending on the choice of class (car/sedan/SUV etc.), brand, features, and specific models. Having a clear picture of your budget laid down before your eyes will optimize your car buying process in more ways than you can imagine. You can block out the vehicles that are below or over your estimated budget, and focus on checking out cars that fit within your range. 

This step will also help you gain insight into the financial aspects of buying a car. As you set up a budget, you can decide how much down payment you would want to put forward, how much will be your car loan, and what is a comfortable loan repayment horizon for you. 

Choose the car for you

With the growing demand for cars globally, there is no dearth of brands or models. You have plenty of options available for any price range, whether you’re looking for a generalist vehicle or a luxury one. But your budget should not be the only factor to determine your choice of car. As a smart and informed buyer, you first have to find answers to these questions:  

  • What’s your family size? 
  • How frequently will you use the vehicle?
  • What is your primary purpose for using the vehicle? (everyday commute/traveling/off-roading) 

Once you are able to answer these questions, you are ready to go ahead and find a car. Here are some of the key aspects you must keep in mind about the car you pick: 

There are ample resources available online where you can check different vehicles and their features, and of course, you might also pay a visit to car dealerships in your locality to get more details. 

Find your dream SUV based on price, automaker, location, and year of making at SUViews Best Suvs

Check car maintenance costs

You have to know the approximate car maintenance cost right at the stage when you’re choosing the car. Because as you already know, buying a car is never a one-time expense. You have to spend a considerable amount on regular intervals to keep your car up and running. According to the American Automobile Association (AAA), the average cost of car maintenance is $792 per year or $66 per month. This is just a ballpark, and the number goes up depending on individual cases. 

For more clarity, check out this calculator to know the real cost of owning a car.

Test-drive the car

The test-driving session can make or break the car deal for you. While not everyone opts for a test drive before a purchase, it’s a great way to familiarize yourself with the car even before you commit to it. Here’s a quick list of things you must take note of during your test drive: 

  • Is it comfortable getting in and out of the car? 
  • Is there enough cargo space? 
  • Is there enough legroom and headroom for all passengers? 
  • Is the ride quality meeting your expectations? 

You can also request the dealer to test-drive the car at your own place. Try to park it in your usual parking spot, take it around for a quick drive, and observe the overall experience. Don’t stick to just one vehicle– test drive the top 3-5 choices you have in mind and then come to a conclusion. 

Check its car stats in a dealership

When you contact the dealership, make sure you obtain the running stats of the vehicle. This information will include details such as brake horsepower, engine size, acceleration, city and highway mileage, annual tax, and insurance cost. When you compare the stats of multiple vehicles, you’ll be able to gauge the market standards better, and then you can decide which model you would pick for yourself.

Find where you want to buy it from

Where to buy a car will largely depend on your personal preference. For both new and pre-owned vehicles, you can buy from an online marketplace or a local dealership. A quick internet search will give you all the details of your nearby dealerships. Check their online reviews and the list of available vehicles to shortlist a few dealers.

Get dealer quotes

Now it’s time to collect quotes from the selected dealers. Never settle for the first dealership, rather shop around for a while to get multiple quotes. Then compare the costs to find out which showroom is offering the best deal, without compromising on standard offerings.

Bargain the right price for you

You can always get a better price if you bargain, so don’t hesitate to negotiate a little with your car dealer. While talking to the salesperson, be in control of the conversation, and don’t let emotions make decisions on your behalf. Be as rational as possible, and conduct in-person research to secure the best deal for you.

Maximize trade-in value

To get maximum value for your old vehicle, the first step is to research the ideal price range for your vehicle. Edmunds is a great resource for this purpose. Check out other online marketplaces where used cars are bought and sold. Before you present your car for the trade-in, make sure to wash the car and clean the interiors. Get rid of small scratches and dents to make your car as practically flawless as possible. If you have already kept a tab of your maintenance records, that’s all the better– just carry all the documents with you. 

Now that you’re ready with all the information, documents, and a cleaned-up car, visit multiple dealerships and shop around for the trade-in. Having an idea of your budget for the new car is another bonus. It will help you bargain well and negotiate for a better price. One expert tip in this regard– while talking to the salesperson, always negotiate the trade-in price separately from your original car down payment or EMI. 

Seal the deal

Once you find a dealership that’s offering a fair price for the trade-in as well as for the new car, it’s time to seal the deal. You can get your car delivered at a convenient location, or in some cases, directly drive it home. If you follow the steps we mentioned above, you shouldn’t have any problem getting a reasonable deal on your car purchase. All you need is some research and negotiation skills, and you’re good to go.

What is the Process of Buying a New Car: Tips to save money

By now, you’ve understood the step-by-step process of buying a new car. From searching online marketplaces to shopping around for a good price to finalizing the deal– it might take a little longer than just heading to a showroom and buying a car instantly, but you will save quite a lot of money if you put in the extra effort. 

Here are some more tips for you to save money while buying a car. 

Get preapproved for a loan

Instead of applying for a car loan after you have finalized a vehicle, consider getting pre-approved for a car loan. Although the process differs a little from bank to bank, the basic regulations are more or less the same. You will have to present your credit report which also includes your credit score, and the financier will pre-approve your loan based on their evaluation. 

Why is this significant? Because it gives you an idea of how much you can avail in the form of a loan even before you choose a particular car. It also saves a lot of time and expenses when you’re actually buying the car. Car dealers often charge higher interest rates than usual, if you get a car loan from them. So getting your loan pre-approved is the best option. Try to contact at least 2-3 lenders to know the rate of interest they are charging, and go with one that’s best suited for you. 

Keep it simple

When you’re at the dealership, the salespeople will try to enquire about any other requirements you might have other than buying a car. The common queries are if you need a car loan or whether you want to offer a car for trade-in. The smart way to handle these questions is to avoid them. The reason is, if you divulge too much information about your requirements at the very beginning, you will have less control over your deal. 

If at any point you feel you’re not being adequately compensated for your old car, don’t feel afraid to look elsewhere. You might also choose to purchase the car without the trade-in because there are enough marketplaces where you can get a good price for your car.

Don’t buy add-ons

The dealership agents will try their best to upsell you a large number of add-ons that you don’t really need immediately. They will lure you into believing that the extra additions will only add a small amount to your monthly installment, but if you actually sit and calculate, the amount is quite big. So to save money, say no to all the additional things they offer you.

Some of the common add-ons for a new car would be protection plans, extended warranties, and upscale luxurious features for the car. There’s absolutely no need to fall into their trap, and in case you need an extended warranty, you can opt for it later on and shop around for the best deal. Remember, the dealership from where you’re buying the car is not the only one selling these. They have a huge margin on the sale of add-ons, so be cautious.

Do not get long duration car loans

The lender will try to persuade you to opt for a 6 or 7 years loan tenure, but you should never say yes to this offer. Whenever your loan repayment time crosses the 5-year mark, you are charged higher interest rates. It’s true that you will have to pay a small amount every month, but if you look at the loan repayment bifurcation, you will find that most of your repaid money is going towards interest. 

As a smart buyer, why would you give away your money to the lender? If you have to take a loan, take it for a short tenure, and always repay on time. 

Consider a used car to save a lot of money!

Pre-owned cars are high in demand today, more than ever. If you search online marketplaces as well as offline dealerships, we are sure you’ll find some great used cars. Whether your budget is big or small, this is an option every buyer should explore. 

Buying a used car is an economical option– you not only save money but also get the best value for the price you’re paying. The insurance cost and dealership fee will also be considerably lower. New cars depreciate pretty rapidly, whereas used cars tend to have slow depreciation. You also get to have a look at the car’s real-life stats, based on its vehicle history, rather than only depending on the manufacturer’s words. 

What to Bring to Trade-in Time of the Car Deal

Trading in your car sounds like a simple give-and-take process, but for that process to go on seamlessly, you have to carry all the necessary documents, and of course, a clean vehicle. Whether you’re selling your old car to an individual buyer or a dealer, this rule applies to all cases. 

Here’s a list of everything you need to bring during the trade-in: 

  • Current certificate of title

    When your car is financed, you can skip this step. But otherwise, you have to carry this legal document to certify that you own the car.

  • Current vehicle registration

    Before you head out to hand over your car to its new buyer, make sure to bring along your current vehicle registration papers. 

  • A clean vehicle

    A no-brainer– you can’t afford to forget this step. Get your car washed before you hand it over, clean the cargo space, and make sure it’s clean inside out. This will help your car look well-maintained, so your buyer will have an overall good first impression.

  • Service records

    Another very important document is your service records. This record book contains all the details of the times your vehicle went for servicing, be it a filter change, oil change, maintenance, or anything else. This record will give the buyer a detailed idea about the condition of your car.

How long does buying a car take?

It would be unfair to predict a specific timeline, but all we can tell you is that it’s definitely not a 1-hour job. If you decide to follow the steps as we elaborated in this article, it will take you at least one or two weeks to get your hands on your new car. 

There are several factors at work here. Firstly, if you’re purchasing second-hand, or trading in your old car, it will take some time to look through online marketplaces and offline dealerships to find a good deal. Secondly, after you book your vehicle, you will most likely have to wait for a few days before getting the delivery. 

Exactly how long it takes to buy a new car varies from one buyer to another. As per our general estimate, we would suggest you have at least two weeks’ worth of time in hand. 

So as you can understand, the process of buying a car is long and somewhat tedious, but nonetheless exciting!

Can You Buy a Car with a Credit Card?

This is a common query all new car buyers have– can you buy a car with a credit card? The answer is yes, but you cannot pay the entire amount through your credit card. You will be allowed to pay only a certain part of it through your credit card, and for the rest, you have to go ahead with traditional car loans or a cash payout. 

Now the question is, why can’t you pay the entire price of your new car with credit cards? It will help you accumulate some good amounts of points, right? 

The no. 1 reason behind this is the transaction cost involved in the process. When you pay for a commodity through your credit card, the merchant is charged anywhere between 1-3%. For something so expensive such as a car, this apparently small percentage can result in a huge amount. This is a price that the dealerships aren’t willing to pay, so they allow you to pay only a part of your total car price through credit cards. 

And even if a merchant agrees to let you buy the car through credit cards, you will have to pay a convenience fee of 2-4%. Definitely not a wise deal.

Sum-up of the 5 main steps to buying a car?

In a nutshell, if you have to focus on the main 5 steps of buying a car, these are the key points for you:

✓ Set up a budget

✓ Do your research and find 2-3 potential cars 

✓ Compare prices in marketplaces and offline dealerships

✓ Test drive the cars

✓ Pick the best deal 

It goes without saying that if you’re trading in your old car, this list will not remain limited to 5 steps only. But if you’re noting down the primary takeaway from this article, these would be the absolutely essential steps.

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The amount you should spend on your first car entirely depends on your budget, preference, and choice of class. Ideally, your car buying expense has to be no more than 15-20% of your annual income. So if you’re making $1,00,000 a year, you can look for a car within $20,000.

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Volkswagen Golf, Honda Civic, Chevrolet Equinox, and Toyota Corolla are some of the most reliable choices for a first car.

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You don’t need insurance to buy a car, but you definitely need insurance when you’re driving your new car out of the showroom.