New Car Buying Tips

Buying a new vehicle can be both exciting and stressful. A new vehicle is a major cost, the second most expensive purchase for most Americans after their home. To help you accomplish your goals wisely, we have assembled these useful tips for buying a new car.

Assess your needs for a new car

Start by making a list of features you want your new vehicle to have. These will include such things as:

• Size: Consider the amount of room you require, based on how many people and how much equipment you need to carry on a regular basis. Which models will fit in your parking space?
• Essentials: Determine your must-haves in terms of automatic or manual transmission, length of manufacturer's warranty, safety features, fuel efficiency, and so on.
• Optional features: Do you want a moon roof, power-assisted windows and seats, GPS, leather interior, DVD player, etc.?

Calculate your budget

Know how much vehicle you can afford before you shop. Stick to your budget to avoid the temptation to buy on impulse or agree to a price that could pinch your lifestyle for years to come. Personal finance experts recommend keeping the expenses related to transportation, including car payments, gas, insurance, and repairs to no greater than 15% of your monthly household income. Insurance costs will vary by vehicle model and other factors, so be sure to talk with an insurance agent at an early stage in your planning.

Preview vehicles for free

You can comparison-shop automotive models, features and options, ratings, and even get pricing over the Internet without having to make any commitments. Check the websites of auto manufacturers and dealerships, and read reviews in consumer and auto publications. Get a free new auto report.

Arrange financing first

Comparison shopping for financing is just as important as it is for vehicles. Every time a dealer or loan company checks your credit report to determine your creditworthiness, your credit score actually goes down. To obtain the best financing rates, you may wish to secure a loan from your preferred lender ahead of your actual vehicle purchase. When you are ready to buy, this will help you stay within budget and protect your credit, too.

Cover your new car with insurance

Before you drive your new vehicle off the lot, it must be covered by insurance. Call your insurance agent before you buy to make the arrangements.

Buy your new vehicle

With all your advance planning completed, you are ready to enjoy shopping for a new vehicle. Be sure to test-drive each vehicle on your short list to ensure you like the way it handles. Once you have made your decision, negotiate with the dealer for the best price, and contact your insurance agent with the vehicle's details. Now drive away in your new car!