Cars, trucks, and other vehicles are big-ticket items that most people need in order to function throughout their daily lives – they’re expensive necessities. This is especially true if you live in Texas, or any suburban area around the country whose public transit system leaves much to be desired. And because vehicles are so vital, it’s surprising to me that the dos and don’ts of car buying and how to shop smartly aren’t taught in schools. If we, as parents, want to teach our children about succeeding in the real world, we need to make this a priority!
The fact is, money runs our lives and large purchases like cars have a huge impact on our finances – an impact we can have control over!
So how do you buy a car without ending up in a worse financial situation? How do you find a dependable vehicle that won’t suck up excessive time and money on repairs? And how do you get into a loan that won’t put you “upside down” – where you owe more than the car is worth? It isn’t “easy”, but it’s absolutely doable!
I’ve learned my fair share of dos and don’t when it comes to car buying, and I want to share them with you today. There are quite a few horror stories out there that prove how serious you should take this car shopping situation. Being sold a lemon, falsifying accident-free CarFax reports, strong arming buyers into loans they can’t afford… It’s rough out there! While it can be easy to be taken advantage of, if you know these 30 dos and don’ts of car buying, those tricky car salesmen won’t be taking you for a ride! (Except a test drive, of course.)
30 DOs and DON’Ts of Car Shopping
Do Know Your Credit
Check your credit before looking around for auto loans or shopping for cars. (Read how in our What is Credit? post.) It’s a good idea to understand what you’ll be dealing with when negotiating a price or financing. The higher your credit score, the better interest rates will be available to you as far as financing goes.
Don’t Forget your Budget
Your number one priority should be making sure whatever vehicle you’re looking to buy, fits in your budget! It’s not worth even looking at vehicles too far out of your price range. Understand your budget, know what kind of monthly payment would fit comfortably, and stick to it when you’re negotiating.
Do Value Affordability
An affordable car is more valuable than almost any other quality (except dependability). Who cares if it’s the “safest”, the “fanciest”, the “newest”, the “fastest”, or whatever your excuse is – if you can’t actually afford the monthly payment? When an affordable car depreciates, it’s not as big of a deal because you’re not shoveling as much money into it. You’ll owe less in the long run, and have more cushion in your budget each month.
Don’t Buy for Looks Alone
Looks aren’t everything, you guys! While it seems wonderful to have the nicest looking vehicle available, it’s not always practical. Remember your budget when deciding what to buy. Of course, if you can afford it comfortably, then go for it! Just don’t make appearances the only quality you’re concerned with. A nice looking car doesn’t always mean quality performance.
Do Check out Used Cars
Used cars get a bad rap sometimes, but don’t shy away from them! You can find high quality used cars that may have been gently used rental cars, or leases, with low miles and no prior damage. With used cars, you’ll want to do your research ahead of time.
Also, check out Money Crashers 10 Warning Signs to look out for when checking out used cars.
Don’t Shy Away from a Lease
If you’re trying to get out of an uber-expensive car, looking for cheaper payments, or know that you’ll want to be in a newer car again in a few years, a lease may be the way to go. While it’s true you won’t actually own the vehicle, you’ll be on the hook for any damage when you turn it in, and they usually come with a mileage limit, a lease can be a great way to build credit and get a more affordable payment without the inevitable repairs older cars need.
Do Check on Auto Loan Rates with your Bank
Instead of going into a dealership and automatically going with whatever financing is available, check with your bank to see what kind of rates they offer on auto loans. They may offer incentives, or cheaper interest rates – you won’t know unless you check first! Usually your bank can also pre-qualify you for an auto loan to help you figure out what you can afford.
Don’t Give in to Pushy Salesmen
Car salesmen get a bad rap for being super pushy when it comes to making a sale. And honestly, it’s a reputation they easily earn. Not all salespeople are pushy, of course, but the majority tend to be. That’s their livelihood and how they feed their family, so of course they’re going to want to make as much as possible. Don’t give in! You have to worry about you and your family’s needs, too.
Do Research Online
Research, research, research! Before going car shopping, you’ll want to figure out exactly what kind of cars you’re interested in. Then look up their actual values on Kelly Blue Book to understand what the vehicle will be worth after you buy it. Search around the car sites I mentioned earlier (under used cars) to look for vehicles as close to the value price as possible. Many times dealerships that are farther away will offer the cheapest prices as an incentive to get buyers in the door.
Don’t Go in Blind
Don’t go car shopping without doing that research, mama! Going in blind will make you more susceptible to being taken advantage of. And we don’t want that!
Do Buy Your own Carfax
Buy. Your. Own. Carfax. I have heard way too many horror stories where sales people and dealerships blatantly lie to their customers about the car having a clean title and accident-free Carfax. It’s even happened to James! Buy your own Carfax so that you know for absolute certainty how many accidents and owners the vehicle has been through.
Don’t Trust Everything the Salesman Tells you
It’s sad that this has to be said, but it does. Be wary of the claims they promise. I’m not saying all car salesmen are liars, only that they have their own needs and agenda. They want to make a sale. Which is fine! But to be a smart buyer, you should do your research and get your Carfax first. It’s better to be safe than sorry! (Like James was after he bought that Mercedes from CarMax…)
Do Visit Many Reputable Dealers (Especially their used lots!)
Focus your search on reputable dealers, and visit more than just one! And don’t skip checking out their used lots. You’d be surprised by the value you can find hidden away, sometimes.
Don’t Car Shop Alone
Bring someone along to car shop with you that you know and trust that also works on cars. If you don’t know a mechanic, ask anyone you trust who knows a thing or two about cars. Don’t have anyone? Then at least take your best friend who won’t let anyone walk all over you. Haha!
Do Visit Multiple Dealers – & Shop Before You’re Ready
Don’t rush the process – visit multiple reputable dealers over multiple days. Draw up a list of different dealerships and lots who have the cars you’re interested in, and make a plan to visit each one.
“Window” shop online and at local dealerships before you’re actually ready to buy. Don’t wait until you no longer have a working car to go shopping for another one! You’ll be more desperate for anything instead of focusing on finding the best deal.
Don’t Impulse Buy
Buying a car isn’t the kind of purchase you make impulsively if you want to be a smart buyer. Do it right – research, know what you’re interested in, visit multiple dealers, negotiate, and be prepared to walk away if they don’t come to terms.
Do Keep This List of Questions with You
Make a list before shopping around of the kinds of questions to ask the sales people. Some examples are:
- How many miles are on the vehicle?
- Has it been in any accidents? (Confirm with the Carfax report.)
- Why are you selling the car? (If it’s a private owner.)
- Does it have a salvage title?
- Are there any recalls on it?
- Is the car under any warranty?
- Are their any strange noises?
- When’s the last time the tires were replaced?
Don’t Just Take the Seller’s Word for It
Try to avoid only taking the seller’s word for it when confirming the answers to your list of questions. You can do this by keeping an eye out for extreme wear and tear if the vehicle is supposed to have low miles, confirming the number of accidents (or lack thereof) with a Carfax report, checking on the title with the DMV, and doing your own research about recalls.
Do Try to Sell your Vehicle Privately, if Possible
If you have a vehicle to trade in, you’re more likely to get the most bang for your buck by selling it on your own. It can take some time and effort, but if you’re wanting to get the most out of it, it could be worth it.
Don’t Trade in without Knowing Your Trade-in Value
If you don’t have time to sell your vehicle yourself, or you aren’t having any luck selling, trading it in when you purchase your next vehicle may be your best bet. Look up the value of your trade in first so that it gives you a better idea of what you deserve when negotiating. You can assess the value on kbb.com.
Do Check the Vehicle Maintenance Records for:
- Oil Changes
- Standard Mile Maintenance (40,000 / 60,000 / 100,000 miles)
Make sure the previous owners took good care of the vehicle. A properly maintained car will last much longer than a neglected one.
Don’t Drive Off the Lot without Updating your Auto Insurance
It may sound ridiculous that accidents happen on the drive home from a car dealership, but it does happen! Make sure you’re properly covered after purchasing a vehicle by updating your auto insurance coverages before ever leaving the car lot.
Do Take the Vehicle for a Test Drive
If you’re interested in a vehicle, a test drive is mandatory. It’s important you get a feel for how the car drives before fully committing to it. It’ll also give you a chance to keep an ear out for any weird noises that could mean costly repairs.
Don’t Negotiate Until You’re Sure You Want it
Make sure you know you actually want the vehicle before you start using all your negotiating power and energy to get it.
Do Check Kelly Blue Book for the Estimated Value
Check out KBB.com to look up the estimated value of whatever car you’re thinking about getting, that way you know how much you should be paying for it. Dealerships are always going to charge a bit more than the value, but the closer you can get to the actual value, the better. You’ll be in a better position financially instead of upside down on the deal.
Don’t Commit to Anything without Checking these First:
- Door hinges and locks
- Trunk latch
- Turn signals
- Forward and reverse lights
- All dashboard switches and buttons
- Hood latch
- Under the hood – fluid levels, cracks, holes, green or orange stains (leaks)
- High beams
- Heater and A/C
- Audio system
- Body dents, scratches or rust
- Tire tread, cracks, holes, etc.
- Upholstery – rips, tears, dampness, mold?
- Spare tire
Do Ask about Gap Insurance
If you’re negotiating a deal on a new vehicle, or any vehicle where you will end up owing more than it’s actually worth (which is most of the time) ask the dealer about Gap insurance. By definition, it covers the “gap” between the actual value of the vehicle and how much you owe on it. If the vehicle is ever a “total loss” after an accident, Gap insurance will pay what’s left on your car note after the value of the vehicle has been put toward paying off the loan.
Don’t Make a Purchase if You are at All Uncomfortable
It’s incredibly unnerving to be working with a pushy salesman negotiating a deal for a vehicle you don’t really want, or can’t afford. Don’t make a commitment if you’re uncomfortable with any part of the situation! You’ll end up regretting it. Leave the lot and sleep on it if that will make you feel better.