You can save time, money, and headaches if you do some research in advance. The more you know going into the dealer, the better you'll feel driving out. Remember: your time is valuable, and your bargaining power is greatest before you go to the lot.
- Before you shop around, decide what you can afford. Consider your current expenses and budget, including what you can spend on a car. Learn more about how you can prepare to finance a vehicle.
- Research and comparison shop. Research the car, the features you’re interested in, and what’s in your price range. Here are some resources to find out what a used car might be worth.
- Exchanges may offer special deals. For instance, if you're stationed overseas for at least 30 days, you can typically buy a car tax-free and may even be able to ship it back to the US for free.
- Check out deals before you visit the dealer. Dealers may advertise unusually low prices, low or no upfront payments, low- or no-interest loans, or low monthly payments. Other dealers promise high trade-in allowances, attractive discounts and rebates, or free or low-cost add-ons, like service contracts. A great way to follow up on interesting listings and offers is to contact the dealer before you visit in person. Hammering out the details before you visit can save you hours on the lot, and keep thousands in your pocket. Here are some questions to ask.
- Find out about the dealer before you visit. Contact your state and local consumer protection agencies to find out if they have any unresolved complaints on file about a particular dealer. Also check out a dealer’s reputation by searching online for the company’s name with words like “scam,” “review,” or “complaint.”
Find a car you that might be right for you?
- Check out the Buyers Guide. Dealers have to display a Buyers Guide in every used car they offer for sale. They also have to give it to buyers after the sale. Learn more about the Buyers Guide.
- Get an independent inspection. Ask the mechanic for a written report with a cost estimate for all necessary repairs. Be sure the report includes the car’s make, model, and VIN. Don’t trust any seller who doesn’t let you do this.
- Research the car’s history at vehiclehistory.gov. When you put in the Vehicle Information Number (VIN), you’ll get title, insurance loss, and salvage information for the car. Reports from other places sometimes have other information, like accident or repair history. Most used cars are sold “as is,” and many warranties or service contracts that were bought separately don’t transfer with the car. Here are other resources to research the car.
- If you plan to finance your purchase, try to get pre-approved for a loan before you talk with a dealer. Banks, credit unions, and other lenders can offer preapprovals, even if you’re not a member and don’t have an account. Having a loan preapproved before you get to the dealership can help you determine whether the dealer’s financing is a good offer. It might also help you negotiate an even better loan.
- Get the “out-the-door” price — in writing, in advance. Before you ever leave home, ask the dealer to confirm that the vehicle is actually on the lot. Then ask them to send you the “out-the-door” price — in writing — whether you’re buying the car for cash or financing the car. And ask what the out-the-door price includes and excludes (for example, taxes or other government charges).
- Be sure you understand vehicle financing. Look at the total cost of the car, including the down payment, monthly payments, and length of financing. A longer payment plan may lower your monthly payments, but your interest rate for these plans is usually higher. And the longer you pay, the more you will owe. With a long payment plan, you also can end up owing more than your car is worth (called negative equity).
- Be aware of add-ons. Add-ons are optional products and services offered by the dealer, like warranties. You can usually buy the vehicle you want without any add-ons. You can also buy most add-ons from independent retailers. If you want an add-on from the dealer, be sure to ask how much you’re paying for each add-on and what you’ll get — and get answers in writing. Make sure the monthly payments quoted by the dealer don’t include any add-ons you don’t want or haven’t agreed to.
- Wait to discuss the possibility of a trade-in until after you’ve negotiated the best possible price for your new car. You want to be sure the seller doesn’t adjust the sales price of the car to make up for a generous trade-in offer.
- Ask questions about the terms of the contract before you sign. For example, are the terms final and fully approved before you sign the contract and leave the dealership with the car? Does the price on your contract match what the dealer sent you ahead of time? If the dealer says they’re still working on the approval, the deal isn’t final. Consider waiting to sign the contract, and keeping your current car, until the financing has been fully approved. Get a copy of anything you sign at the dealership.
