The 7-Step Guide for Buying a New Car

Though buying a new car can be an exciting time, it can also be a stressful or overwhelming process. There can be too few or too many options, salespeople can be pushy, and you could end up with a car that has defects. Fortunately, there are a few simple steps you can take to help make this process a smoother and more enjoyable one.

Also, when you're ready to get your new ride equipped with the coverage it needs, a local independent insurance agent can help. They'll quickly get you set up with the right car insurance policy. But first, here are seven tips for buying a new car to help make the process smoother for you.

1. Research the Vehicle You Want

While for some customers, shopping in person can be frustrating due to limited availability and inventory of vehicles, shopping for cars online can be overwhelming for others due to the endless options. Either way, it's extremely helpful to have an idea of what you want in mind before you start shopping for real. Take some time to research different makes, models, and features of several vehicles you're interested in online first.

You might decide to research your options to narrow down exactly what you want online, then go to a physical car dealership to see the specific vehicle and test drive it. Or, you might decide to complete the purchase online. But having a solid grasp of what kind of vehicle you're looking for before you ever step foot on a dealership lot can help save you time and frustration, not to mention the unfortunate possibility of getting stuck with a vehicle that you don't want.

2. Get Preapproved for a Loan

When you get preapproved for an auto loan, this gives you a realistic idea of vehicles in your price range. This also offers you the option to compare this interest rate to financing options through the dealership and choose the best deal with the lowest APR. You can get preapproved for an auto loan online or through your own bank. Make sure to research a few options to find the one that works best for you. 

You'll also want to select the terms that work best for you and your finances. While you can get auto loans with terms of 72 months or longer, it's recommended to get a loan that doesn't surpass a term of 60 months. 

Further, the past recommendation of making a 20% down payment is no longer doable for many customers with the rising price of many new vehicles. Today, it's more commonly recommended to put 10% down and supplement your car insurance with gap insurance or new car replacement coverage in case of an incident in the first few years. This can help you avoid owing more money on your loan than your vehicle's actual cash value.

3. Go for a Test Drive

Whether you're shopping online or in person, be sure to test-drive the specific vehicle you're considering. Many car shopping websites allow you to filter results down to specific colors and features, and then you can arrange to have a car delivered to your door for a test drive before you buy. You can also browse many physical dealerships' inventories online and schedule an appointment for a test drive.

Make sure to drive the car on a variety of different roads. Take it on the highway and backroads. Test a variety of different features, including those you don't anticipate using as often. 

If you have a family you'll be transporting in the vehicle, bring them along for the ride and see how everyone fits in it. Notice how comfortable you feel in the vehicle and whether the controls are laid out in a way that makes sense to you. Also, consider whether the vehicle has enough cargo space for your needs. 

Keep in mind that you can take some time to think about your experience and don't have to buy the vehicle immediately after a test drive. If you're feeling seriously drawn to a specific vehicle, you might also want to make the effort to get a proper pre-purchase inspection by a licensed mechanic.

4. Find the Best Deal

After you've determined which type of vehicle you want, you can still shop around for the best deal. It's often recommended to compare the price of a vehicle from at least three different dealerships near you that have it in stock. 

If you're shopping online, you should be able to easily compare the final sale price and warranty options for the vehicle you want from different sellers. Make sure you're seeking information about the "out-the-door" price, which includes all taxes and fees, so you can properly budget.

5. Compare Financing Options

If you got preapproved for an auto loan, now is the time to find out if the dealership's financing option is better. You'll need to let them run your credit to determine your possible interest rate if you take out a loan through them. 

You can also sometimes tell the dealership's finance manager your credit score and your qualified rate if you know it upfront. Alternatively, a dealership may allow you to fill out a credit application on its website. 

If it turns out that the dealership's loan comes with a lower interest rate or better terms than the one you were preapproved for, you'll likely want to take the dealership up on its offer. However, if the dealership's available financing isn't a better option, you have your preapproved loan to fall back on.

6. Close the Deal

After reviewing the terms, learning about any hidden fees, and asking any final questions, it's time to close the deal. Today, you have the option to either buy directly at the dealership or get the car and all required paperwork delivered straight to your door. 

Still, many customers opt to complete the sale at the dealership, where the finance and insurance office will provide you with the official contract, options for an extended warranty, and more. Alternatively, you can work with the dealership to schedule a time for your new car to be delivered to your home.

Always take the time to review the final contract before signing it. Be sure to note that all numbers match up to what you were told for the final out-the-door price and that you were informed of any additional fees. If anything looks or feels off, don't hesitate to ask questions or refuse the sale altogether. 

7. Get Your Keys

After signing the paperwork, the new car is all yours, and you'll receive your keys. Make sure the vehicle is delivered to you with a full tank of gas and a clean interior and exterior. You can also do a final examination of the vehicle to check for any damage that might have occurred while you were finalizing the sale or getting it delivered.

If you bought the car directly at the dealership, allow the salesperson to give you a tour of the vehicle. They'll highlight certain vehicle features, show you how to connect Bluetooth devices, and otherwise ensure you're confident before driving your new ride home. 

You can also choose to schedule this overview of your vehicle if you don't have the time after completing the purchase. But considering all the new technology in cars today, you might regret choosing to skip this step altogether.

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Next: Get Coverage and Enjoy Your New Vehicle

Congratulations, now it's time to enjoy your new vehicle. But you'll also need to make sure you get set up with the proper kind of car insurance by vehicle type. 

Working with an independent insurance agent can be the easiest way to accomplish this, considering they have access to multiple car insurance companies and can shop and compare options for you. They'll get you matched to the auto insurance policy that offers the best overall blend of coverage and cost. Even better, your agent can help you file car insurance claims if and when the time comes.