Buying a Car

Buying a car is an important decision because of the large amount of money involved, and the impact the decision can have on your everyday life.  Many Americans buy cars and hold onto them for three to six years.  That's why it's so important to make sure you've made the right choice, and you've negotiated the best possible price on the vehicle.

The Car Buying Process

We've tried to help individuals to better understand the process of buying a new car by devoting an entire category to this topic.  At last count, we have nearly fifty articles dedicated to the topic of buying cars.   At this point, it's probably the right time to summarize all the information we've collected, and put it together in one publication.

Arguably, there are at least four distinct steps involved with buying a car:

1.  Researching the Car
2. Getting a Loan
3. Negotiating the Deal
4. Selling a Car

Researching the Car

Buying a car is expensive, so it pays to do as much research as possible before visiting a car dealership.  A quick visit to an online resource such as Kelley Blue Book, a local library, or a bookstore, should yield a wealth of information on new cars. This investigation should focus on what is being offered in the automobile marketplace, and how much each car will cost.

Test Driving Cars

Avoid the temptation to start your research by going to dealerships and test driving cars.  It's quite possible to fall in love with the wrong car.  The research should start with a written list of what is needed in the car.  For example, the number of passengers the car should seat.  Test drives will then be conducted on cars that fit those requirements.  This process takes some of the fun out of new car shopping, but a car provides a service, and it's vital to make sure the car can deliver what is actually needed.

Car Safety Features and Ratings

In today's marketplace, automobile manufacturers are competing not just on price but also on features.  First and foremost, the car purchased should include as many car safety features as possible.  Stability control, anti-lock braking systems, traction control, daytime running lights, tire pressure sensors, and air bags are important to personal safety as well as the passengers of the vehicle.

Fortunately, there is also a benefit to buying such features that go beyond that of personal safety.  Most car insurance companies will also offer their customers a discount on their insurance premiums when safety features are present.

Fuel Efficiency Technologies

In recent years, there has been a sharp increase in the different types of fuel efficient technologies used in cars.  With the cost of gasoline on the rise, hybrid vehicles, advanced transmissions, and fuel efficient engines will only add to the resale value of the automobile if the rise in gas prices continues.

Car Accessories

Finally, when creating the list of desired features in the new car, think about buying some of the premium car features that make driving a car so enjoyable.  Power windows, air conditioning, and automatic transmissions are all examples of car accessories that add to the car's perceived value as well as the owner's driving pleasure.

New Car Loans

When it comes to financing a new car purchase, we've covered this topic in-depth in our articles on Car Loans and Online Auto Loans.  We won't repeat the information contained in those articles, but it's important to understand there are a lot of options when it comes to financing a new car.  Local banks, car dealerships, and online companies are all competing for a customer's business, and a competitive car loan marketplace means lower loan costs for the consumer.

Car Loan Calculators

It's always a good idea to run through some numbers before talking to a lender.  We offer a complete line of online car loan calculators. In that section of this website, we have created many useful tools, including monthly payment calculators as well as decision tools such as our buy or lease a car calculator.

Negotiating with Dealers

We've published an article entitled Automobile Purchase that covers several of the topics we've already talked about in this publication, including negotiating with dealers.  The Internet has forever changed the way many dealerships negotiate with potential customers.  The sheer volume, and detail, of information available to everyone with an Internet connection has rewritten the rules of negotiation.

In today's environment, there is no need to be an uninformed consumer.  Dealer invoice pricing is everywhere, and many websites even reveal exactly what a new car will cost.  Negotiate with dealers on a level playing field, and conduct the required research before discussing the price of a new car.

Insuring Your New Car

Our article on Auto Insurance provides a high-level feel for all of the categories of insurance, and the coverage, available for new cars.  Even if you've owned a car before, it's possible to extract value out of this article; especially if this is the first time a car is being financed.

If there is a loan on a car, then ownership of the vehicle is shared with another party.  The lending institution will want to protect their investment, and that means the insurance policy will need to include collision and comprehensive coverage on the car.

Selling Your Old Car

There are still several options in the marketplace when it comes to getting rid of an old car.  Some of these options require more legwork than others, but several of these options are fairly straightforward.  By far, the easiest way to sell an old car is to trade-in the vehicle when a new car is purchased.

If possible, negotiate each deal separately.  Don't allow the dealer to include the used car with the new car quote.  This way, it's possible to completely understand how much is paid for the trade-in versus how much the new car will cost.  Some dealers will try to bundle the two deals together in an attempt to hide from the consumer the exact numbers. Avoid getting into this situation.

Donating Your Car

We've also talked about Donating a Car in the past, and this is something to give serious consideration.  The Salvation Army has a specific program for this type of transaction, but read through the entire article we've published.  For example, there are some requirements that the IRS has imposed if the intention is to take a tax deduction for a charitable contribution on a federal income tax form.

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