A Primer on Buying Your First (or 4th) Car

Ready for sticker shock? The average price of a new vehicle in the U.S. was $48,763 in April 2023, according to Kelley Blue Book — this marks nearly a 30% increase over 2020 prices, which averaged $37,851. And even if buying used is on your agenda, the average price of a used car is now hovering at $28,000, so still not a steal.

However, despite the high prices, there are always some deals that are better than others. That’s why shopping around is a smart way to ensure you get the most out of every dollar you spend. Here’s what to focus on when you’re buying a car, according to auto experts.

Start On The Internet

Yes, we know. You want to take a test drive. That’ll come. For now, head to a couple of the big car sites and start clicking. You should have a budget in mind and an idea of the general type of car you want (being agnostic about brands allows you to get a better deal). Check out the safety ratings and the reviews. Then look at prices. You’ll see the MSRP (the manufacturer’s suggested retail price) on new cars, and estimated values from sites like KBB.com and Edmunds.com for used ones. And understand that cars can be discounted just like other merchandise — a rebate (money back for buying a particular car) is one form of discount, an incentive (like a low-interest rate loan) is another.

Shop For The Financing In Advance

Few people can pay for a car in cash. Even fewer understand that you should shop for financing as hard (if not harder) than you shop for the car itself.  Pre-approvals from your trusted credit union are the best way to go.  You’ll know ahead of time how much you can spend and negotiations won’t take near as long.

Now Hit The Dealership

Now that you’ve done some homework on both cars and financing, it’s time to hit the dealership.  Pulling up to a car dealership without any inclination of what you want is a recipe for getting ripped off. Do not let yourself be rushed into signing on the dotted line. If you’re serious about a certain car, ask for a longer test drive, since some dealerships will allow you to take the car without them, or even overnight. Cars are expensive, so getting a lot of time with it in situations you know will really tell you if it is right for you.

Time To Negotiate

Begin with the “dealer invoice” or “dealer price.” The dealer price is, just like it sounds, the amount the car costs the dealer. Your aim is to negotiate toward that number. And, knowing the dealer invoice comes in handy if there are multiple dealers in the vicinity with the car you want.

One of the best things you can be is prepared when you buy a new car. Arm yourself with information, and you’ll have a better chance of getting what you want at your price point.