The first thing you need to do is figure out is what car you want to buy. One of the biggest complaints people have when purchasing a vehicle is how much time they spend at the dealership. Buying a car does take some time. It’s not like running in to get a gallon of milk. Don’t go in to the dealership at noon to buy a car if you have a dentist appointment at 1p. You’re going to be late for the dentist. Give yourself ample time to make sure you see what you want to see and get all your questions answered.
There are websites that will advise you to get pricing from 5-7 dealerships. Some of you will take the time to do that, others won’t. Depending on the market you live in, you may not have that many dealerships available to you. You may be someone who wants to look at numerous different models. Or perhaps you have it narrowed down to 1 or 2 that especially appeal to you. Some people arrive with a stock number in hand. Others know exactly what they want although they may not have a stock number. Others come in with no idea. They want to drive this, and that, car, truck, SUV. Those are usually the people that spend hours and hours at the store.
Nowadays, most dealers have pictures of every vehicle on their lot on their website including descriptions of the equipment. Once you have figured the model you want, then you can start to narrow down the exact options you want and start pricing. Check out the PRICING page for more info on that. The more time you spend doing your homework, the less time and the easier it will be at the dealership. Obviously you want to check everything out in person eventually like, colors, interiors etc…. And of course drive the car. But if you have a good idea of what you want in general, it will be to your advantage.
You also need to do your homework on financing. What’s your credit score? How much can you qualify for? What will my insurance cost me?
CREDIT SCORE
The higher the credit score, the easier everything gets. Does this mean you have to have an 800 score to buy a car. No, of course not. However, the lower your score goes, the harder it gets. Lower scores pay higher rates. You may have to put more down or not qualify for the car you want. That’s reality. You can still get into a car with less than perfect credit. And you can still get a decent rate with fair-good credit. Especially if you have good car credit. There are different ways to get your credit score. My bank supplies my FICO score online as does American Express. Keep in mind that there are 3 major credit companies(TransUnion, Experian and Equifax). They may not have all the same scores for you as they may not all be receiving all the same information. Credit Karma uses different metrics so it may be different from the others as well. Some lenders may prefer one particular agency. Others may pull all 3 and take the highest. It’s a good idea to know your credit score at all times but especially if you’re looking at making a major purchase like a car or house. Once you have your credit score, then you can check with your bank or credit union to see what kind of interest rate you might get.
PAYMENT
How much can you qualify for? And realistically, what percentage of your income should you personally allow for a car payment? There is some gray area here. The better your credit and the more money you make, the more flexible the lender is going to be. A good rule of thumb is to try to keep your car payment between 10-15% of your gross income. There are a lot of things to consider here. What’s your housing cost? If you’re young, your insurance will be higher. How much down can you put? You don’t want to be car payment poor. If you make $2000 a month, you don’t want to be strapped with a $500 car payment. You need to eat on a regular basis. You probably wouldn’t qualify for that anyway. But you should be able to qualify for a $200-300 payment.