If you’re in the market for a new car, you may be tempted to get started at the car dealership. But before you start scoping out new models, it pays to do some research at your computer. Here are three things you should know before you start shopping for a new car:
1. How much the car should cost.
A wealth of pricing information is easily available both online and through established publications. You can find out the base price of a car and how much various features add to that price, including special package deals. Some Web sites make it easy to compare features and prices on similar models made by different manufacturers, such as mid-size crossover SUVs. Armed with this information, you have more power when bargaining with the dealer.
2. How much you can afford to spend.
Most people decide how much they can afford when shopping for a new car based on the size of the monthly payments. Ultimately, though, you need to figure out how much car you can afford based on those monthly payments. A lender can help you figure out what you can afford to spend, and for how many months. The amount of interest you pay also will be clear. You might be better off having higher payments for a shorter term rather than stretching out repayment for more than five years.
3. Your financing options.
Do your research before you go to the dealership. Financing is another way for dealers to make money, and some might tuck hidden costs into the deal. Armed with knowledge about how much a car should cost and how much you can spend, you can figure out, for example, whether you would save more money by taking a rebate and applying it to the down payment than by the dealer’s zero percent financing. Also, to get the best deal, negotiate the price of the car before you discuss financing or whether you’ll be trading in another vehicle. You can also finance your car through an independent lender. (You can shop for auto loan offers from multiple lenders through LendingTree.com.)
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