How to Buy a New Car: A Step-by-Step Guide
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- 1. Budget it out
- 2. Find the right make and model
- 3. Research reliability and insurance costs
- 4. Find your pick
- 5. Test drive
- 6. Research prices
- 7. Negotiate
- 8. Review the contract
- 9. Purchase car insurance
Buying a new car can be an intimidating purchase—but it doesn’t have to be. Drivers have a limitless amount of resources at their disposal to make sure they’re getting the right vehicle for an affordable price.
If you’re wondering how to buy a new car for the lowest price, car insurance comparison shopping and broker app Jerry has compiled all the information that you need into one handy, step-by-by step guide.
1. Budget it out
Ideally, you want to have at least 20% of the list price saved up for the down payment. Putting down 20% will help you land good loan terms and pay less in the long run. It will also reduce the risk that you end up owing more than your car is worth on your loan.
Once you know how much you can afford to pay upfront, use a loan calculator tool to figure out what loan terms will work with your budget. Don’t forget to factor sales tax, registration cost, and insurance into the equation.
If you want cheap car insurance quotes fast, go to Jerry. It’s free to find and compare quotes.
A licensed broker that offers end-to-end support, Jerry gathers affordable quotes, helps you switch plans, and even cancels your old policy for you. You get all of the savings and coverage, with none of the hassles.
2. Find the right make and model
Now that you know how much you can afford to spend, it’s time to start shopping!
It’s easy to get swept up in the car buying process, so always prioritize practical considerations. Knowing your budget will help you narrow down the search and reduce the risk that you get sucked into the idea of buying a car that you can’t afford.
Now, make a list of features that you need and eliminate any cars that don’t hit the mark. For example, you might want to prioritize ample cargo space.
If you have a camper, towing capacity is a must. If you plan to use the vehicle to transport supplies, a hatchback trunk will make your life easier.
Dealerships usually have car-finder tools that can make your life easier. You can use automotive meta-search engines to speed up the process. Use “filter options” to narrow down vehicles according to your price range and the features you want and need.
A ‘must have’ and ‘nice to have’ list can help you narrow down your options and ensure that you don’t get your heart set on something that you can’t afford.
3. Research reliability and insurance costs
As you start getting a better idea of the models that work for you, use online search tools to research their features, safety, and reliability ratings in more detail. This should give you a good idea of which cars may cost more for things like maintenance, repairs, and depreciation.
Don’t forget to factor insurance costs into the equation. The type of vehicle that you drive is one factor that determines your insurance rates, and choosing a model that costs less to insure can help you save thousands on insurance in the long run.
If you’re shopping for car insurance, Jerry will generate competitive quotes from top providers in less than a minute. Jerry gathers your information from your past insurer, so you’re not responsible for any long forms or phone calls.
4. Find your pick
By this point, you probably have a good idea of the make and model you want to buy.
Now’s the time to get into the nitty-gritty details—things like color, transmission type, features, and extras. Start with your ideal filters and widen your search as needed until you find something that fits your budget.
Don’t hesitate to take advantage of online new car buying tools to simplify the process and make your life easier. Simply input the type of vehicle that you’re looking for and the number of miles that you’re willing to travel to find it.
You can also search through local dealership pages or manufacturer websites to see what they have in stock.
5. Take it for a test drive
Once you’ve located your top choices, it’s time to test them out.
Rather than swing by the dealership spontaneously, call in advance. When you schedule a test drive, your ride will be ready and waiting.
Try to schedule all of your test drives on the same day. That way, it will be easy to recall which one felt best to drive.
6. Research prices
Before you negotiate, use pricing guides like Kelly Blue Book to better understand what you should be paying.
Keep in mind that seemingly random aspects like the color of the vehicle can sometimes affect the price. Be sure to look into the car’s trade-in value, as well—especially if you might want to upgrade in the future.
Now is also the time to check dealership and manufacturer rebates and incentive programs to see if you might qualify. And don’t forget to research the warranty details so that you know what to expect.
Requesting dealer quotes online is an easy way to bypass the stress of a face-to-face negotiation process.
Some third-party sites will allow you to get quotes from multiple dealerships in your area with just one simple request. If you have your eye set on one particular car, you can also email the dealership directly to request a quote.
Once you have your quotes, you can easily compare them to the average market price for the same vehicle.
Once you start negotiating, make sure that you’re always discussing the price of the car rather than the monthly payments on the vehicle. You’ll also want to clarify whether you’re talking about the price tag on the car or the total cost, which includes things like taxes, freight, and other fees.
If things are moving too fast, ask to slow down.
Be sure to bring a pen and paper to write down any numbers that come up. And if things aren’t working out, don’t be afraid to walk away—there are always other options out there.
The negotiation process can seem daunting, but online quotes can help reduce the stress of in-person negotiations. Be sure to clarify whether you’re talking about the price tag on the vehicle or the total cost, which includes all taxes and fees.
8. Review the contract
Always review the vehicle contract carefully before you sign.
At this stage, the finance manager might offer up additional purchases like extended warranty protection plans. Review the warranty protections you already have before signing onto any additional coverage.
A dealership might also offer to beat out any pre-approved loan terms that you have. Before you sign, ensure the interest rate and loan terms are the same or better. Don’t get sucked into lower monthly payments—you’ll probably end up paying more in the long run.
Finally, you need to be fully aware of all prices and fees. The sales price should be the figure you agreed on. You will also be charged for state sales tax and contract documentation fees.
You can always ask to have the registration fees removed from your contract and register the vehicle yourself, if you prefer.
If you see any fees you don’t recognize, ask the dealer to break them down before you sign.
Read your contract details and the pricing breakdowns in full before you sign and ask the finance manager to explain anything you don’t understand.
9. Purchase car insurance
You must have car insurance before you can drive off the lot, so you’ll need to become familiar with your state’s minimum insurance requirements.
Since you’ll have a new car, you might want to consider upgrading your policy to include full-coverage options like comprehensive insurance and collision insurance.
Policy extras like gap insurance and new car replacement insurance can help offset the depreciation costs if your car is deemed a complete loss.
Shopping around can help you find the best insurance, and there’s no easier way to do that than with comparison shopping app Jerry.
In less than a minute, Jerry provides you with competitive quotes from top providers that meet your insurance needs. Once you make a decision, Jerry takes care of all the paperwork for you—and can even cancel your existing policy.
No wonder Jerry is the top-rated insurance app in the country!
“Wow, straight to getting what I want! Where was this app all my life? The app is easy to navigate. You can edit your preferences of coverage. I save money and time. Best of all, they will cancel your old insurance and set you up with a new plan. I am so happy to have found this app!” – Satisfied Jerry customer.
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