The Dos and Don’ts of Buying a New Car

Buying a new car can be stressful — you might know the make and model you want, but shopping around, comparing prices, and ultimately dealing with a salesperson can make the process difficult. And buying a new car is especially frustrating if you don’t know what to expect. If you’re preparing to purchase a new car, we’re sharing the best dos and don’ts to help you make the process effortless and straightforward.

Do: Get Pre-Approved for a Car Loan

New cars are expensive, and 85% of people who buy a new car get an auto loan according to Investopedia. Many people simply accept the loan offered at the dealership the day they purchase their car — but that may not be the best financial decision. Instead, take the time to shop around at local banks to get the best interest rate. Visit your current bank as well as others in your city and ask about auto loans. Often, banks can offer lower interest rates and better financing terms than the dealership.

Don’t: Become Emotional

Buying a new car is exciting. It’s a big change, one that comes with exciting new features and a new car everyone will see. However, you shouldn’t let your excitement overwhelm your good judgement. Take your time and shop around instead of purchasing the first car you like. Do your research at home too, reading reviews and safety ratings to understand what you’re purchasing.

Additionally, leave your emotions at home when you’re ready to buy. Act too excited at the dealership, and a salesperson won’t try as hard to get you the best deal if they know you’ll buy the car no matter the price. Appear calm, logical, and in control, unwilling to purchase unless you get the right deal. And don’t fall for car salesman tricks like a high-pressure sales pitch or threatening to take an offer off the table; you’ll get the same offer when you return.

Do: Negotiate Price

New cars typically have a set manufacturer’s price, or MSRP, but the dealer sells it for a little bit more in order to make a profit. Each dealership marks up their vehicles by different amounts — and if you aren’t an experience car shopper, you might think the sticker price you see is the rock bottom price. In fact, there could be as much as $5,000 in extra charges or fees added by the dealership to boost profit.


That markup leaves wiggle room on the price. Make sure to negotiate with the salesperson, asking for ways to discount the sticker price. After you’ve negotiated the price to the best of your ability, start negotiating extra features and services. Can you get a higher trim level for free? Is the salesperson willing to throw in a maintenance package for less? Remember to lower the price of the car itself first, though, before negotiating features.

Don’t: Bring Children to the Dealership

As much as they add joy to our lives, children are merely a distraction at the dealership. Children won’t have the patience to sit through test drives, negotiations, and the final purchase paperwork process. Buying a new car can take two to three hours on average, AutoTrader reports, and you don’t want to have your kids distracting you while you’re trying to save thousands of dollars. Leave the kids at some so you can focus your energy on the car buying process.

Do: Consider Your Insurance

Did you wait to call your auto insurance company until after you purchased your last new car? This is an incredibly common occurrence. However, the type of car you buy can greatly affect your insurance.

Safer, larger cars are generally cheaper to insure than small, fast vehicles. More expensive cars and cars known for having a lot of mechanical problems are also more expensive to insure. For these reasons, SUVs, crossovers, and sturdy sedans are typically the least expensive to insure. Sports cars are the most expensive. So, in addition to considering the cost of the new car itself, you’ll also want to ask your insurance company how much your monthly premium will increase. A new car tends to add a few hundred dollars to your annual rate, but a specific type of new car might add thousands.

Do: Understand the Manufacturer Warranty

A new vehicle comes with a certain level of guarantee from the manufacturer: a warranty that protects your expensive purchase for the first few years. There are two main types of warranties offered by manufacturers. A bumper-to-bumper warranty is all inclusive, covering any parts of the car that could be defective. The only pieces excluded by a bumper-to-bumper warranty are the tires, oil changes and regular maintenance, hybrid batteries, windshield wipers, brake lines, and the powertrain. That’s where a powertrain warranty comes in — this type of warranty only covers the engine, transmission, and the drive axle. The powertrain warranty is also called the “limited warranty” because it only covers specific components in certain cases.

Make sure your new vehicle comes with a warranty that makes you comfortable. Ask questions before purchasing so you know what will be covered and what won’t in the first three to five years of your car’s lifetime.


BlueSkyImage / Shutterstock
BlueSkyImage / Shutterstock