Your credit score will come into play when you apply for a loan. Plus other things like vehicle age and if you’re applying alone or with someone else.
Buying Your First Car
Experts recommend spending no more than on average 15% of your take-home pay on a car loan payment.
Monday is great for car shoppers. It’s usually less busy, so the salesperson has more time to explain vehicle features, review manufacturer or dealer programs and negotiate with you. Usually, it’s also more convenient for speaking to your lender and insurance company.
Buying A Car As A Couple
Consider your options. You can finance your car through the dealer, but don’t forget about your bank. They may be able to pre-approve you for a certain amount before you shop.
Hone in on a few cars to test drive before going to the dealer. And visit a dealership with strong customer reviews and BBB ratings, where you can find the vehicle, salesperson and price that feels just right for you.
Use your senses. Listen to how the car sounds. How does it feel? Are there any funny smells in that used car that might be everlasting?
Setting a Budget
According to a 2017 Chase consumer survey, dealer websites and online auto reviews are the top sources of information for those researching a car. But don’t be afraid to crowdsource opinions, too. Ask your family what they think (particularly if they’ll be your primary passengers). Your friends might have first-hand knowledge (good or bad) on a particular make, model, dealer or financier.
Certified pre-owned vehicles may give the best of both worlds – a lower price point on a vehicle that has a warranty.
A monthly payment = loan amount x interest rate ÷ the number of months in your term. Consider both the total cost of your vehicle and how quickly you want to pay it off. You may have a lower monthly payment if you stretch the loan over time. But a longer term could mean you pay interest over a longer period of time, and the overall cost of your loan may be higher.
Don’t just think about what you want a car to look and feel like on the road – also consider your transportation needs. How much driving do you do? How often will others be in the car with you, and how many? Will you have to pay a property tax for your car? Do you need a parking permit? This all factors in to the type of car you buy.
Sealing the Deal
Read carefully. Make sure your offer sheet and invoice match and financing documents reflect what you previously negotiated. Ask questions if there’s anything you don’t understand.
Sometimes dealers focus on monthly payments instead of overall price. Make sure the math checks out with your budget once you’ve factored in the terms of your loan, plus taxes, insurance and other fees.
Buying a car is considered one of
the most stressful purchases for
adults. It doesn’t have to be.
The 23 Unofficial Rules of
Get a ballpark for the loan payment and term on the car you want before stepping into a showroom. Using a tool like Chase’s Auto Loan Calculator can help the numbers make sense once you’re actively car shopping.
Carefully inspect the vehicle before you sign anything. Ask for a vehicle history report, or get one on your own, to know where your car has been. Make sure it’s clean and in the condition you expect. Double-check that the mileage is the same as what’s listed on your signing documents.
Are you part of a twosome, yet you’re buying a car primarily for your own use and with your own funds? Still approach this process together and compromise. From monthly payments, insurance, maintenance and repairs, the total cost of a vehicle may impact both of you.
Don’t purchase anything or sign agreements unless you fully understand them. And if you’re unsure, don’t hesitate to leave and come back another day to complete the purchase. Peace of mind is better than regret.
MSRP stands for manufacturer’s suggested retail price; operative word: suggested. The dealer can adjust the price up or down, often due to the vehicle’s demand. To price vehicles and see what other shoppers in your area paid, use a tool such as Chase Car Buying Service.
If you’re trading in a car, research its value to factor that into your budget. You can use an online tool to check the trade-in value of the year, make and model of your old car, based on condition (So be honest!)
Know how you got to the final price. Ask the dealer to itemize all the fees that make up the final price you’re bargaining for. That includes the cost the dealer will charge to process the necessary paperwork, plus applicable tax,
title and registration.
Determine whether you should buy a new or used vehicle. A used car typically has a lower sticker price and insurance premiums. A new car is customizable, has the latest features and usually a warranty.
Take the car for a spin on highways and back roads where you’d actually drive to get a real feel for it.
Another benefit of choosing a financial institution – you can manage your car loan in the same place as your other accounts.
Accelerate the process by being prepared. Bring your driver’s license, the title and registration of your old vehicle (if you’re trading it in), proof of insurance and, of course, the down payment. Being organized means you’ll drive off the lot with your car that much quicker.
First, find a calculator. It’s not enough to set a budget for your down payment. You also need to know what you can afford to pay for a car (and its upkeep) each month. Budget for insurance, gas and regular oil changes also.
Choosing the Right Car
Buying A Car As A Parent
Your kids are your most frequent passengers, so they should definitely come along for a test drive. Be sure the car fits the lifestyle for your whole family, literally – try squeezing your car seats, strollers, school and sports gear.
Know the special features, add-ons and optional products you want. That includes anything from a backup camera to service contracts and paint protection. Don’t feel pressured to buy all the extras.