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Orlando FCU

Looking to buy a new or new-to-you car? It can be exciting to dream about your new ride, but the realities of car buying can also be a bit daunting. Luckily, you don't have to go it alone! This guide will help you navigate the car buying process on cruise control. Ready to start?

Car Buying Process Step 1

Step 1: Decide how much you'll spend.

To do this, you’ll first need a basic budget. Start by finding your monthly income. Then, calculate your monthly expenses by adding up fixed costs like your rent, debt payments and subscriptions. You’ll also want to estimate your monthly variable costs such as groceries, clothing and car maintenance. Subtract all of your expenses from your income to learn what you have to work with. A good rule of thumb is that your car payments plus your existing required expenses should take up no more than 50 percent of your income.

Car Buying Process Step 2

Step 2: Research vehicles.

With your budget in mind, it’s time to consider the other important aspects of your future car. Are advanced safety features a priority? Integration with your smartphone? Seating room? Tight handling? Off-roading capability? Cargo space? A high resale value? Rather than starting with a look or brand name, try creating this list of important features, and find cars that match most closely to your list.

Car Buying Process Step 3

Step 3: Get pre-approved for a loan

Before going shopping for your new vehicle, it is a great idea to get pre-approved for an auto loan because it will prevent you from making an emotional purchase. First, it will determine what your financial institution is willing to lend to you and help you calculate payments before you fall in love with a car on the lot. Second, it gives you better negotiating power at the dealer, so you can focus on getting the best price on the car as opposed to being distracted by monthly payment or financing discussions.

Car Buying Process Step 4

Step 4: Plan your trade-in.

If you’re planning to trade in your old car, you should research its value before heading to the dealership. This way you have a baseline for negotiating any offers. Sometimes dealerships offer special deals for trade-ins, but if your old car still has some value, you may get more out of it by selling it yourself or turning to a third-party car retailer. Our partners at Auto Advisors and Carvana provide complimentary appraisals and can even purchase your car.

Car Buying Process Step 5

Step 5: Negotiate the deal.

Negotiation isn’t as difficult as it may seem. Some strategies for negotiation include:

  • Give a price and stick to it. Tell the salesperson that you’ll only buy a car if they will sell at the price you want. They may not immediately offer your ideal price, but if you provide your phone number and leave, they may call and offer your price if they need to make the sale.
  • Visit at the end of the month. Dealers are usually more willing to sell for less at the end of the month as they work to meet monthly quotas.
  • Focus on your offer. Salespeople like to work down from the car’s retail price or emphasize your monthly payment. But it’s much easier to stick to a price you want than to work down from the retail price. You’ll also want finance discussions such as monthly payments to come after the car’s price is determined. This prevents unnecessary add-ons from being snuck into the mix.
  • Go elsewhere if your price isn’t met. If the salesperson isn’t offering a price that matches your (reasonable) target price, be prepared to visit other dealerships and make sure the salesperson is aware.

Still want to skip the time and effort of negotiation? Purchasing a car through Auto Advisors or Carvana means you pay the price you see.

Car Buying Process Step 6

Step 6: Secure a loan.

Once the dealer accepts your offer, it’s time to actually buy your car! If you choose to use the pre-approved loan you were offered earlier, this is when you should follow your lender’s instructions regarding your pre-approved financing or complete a loan application with a lender. In the event your car is purchased from a private seller who requires cash or a cashier’s check, you may need to sign extra paperwork with your lender.

Car Buying Process Step 7

Step 7: Buy insurance.

You won’t get an accurate car insurance quote until you actually have a vehicle, so the best time to acquire insurance is when you’re almost done with the process of car buying. Shop around for the best quote possible as your current insurer (if you have one) may not be the best fit for your new vehicle. You may also want to consider GAP and Mechanical Breakdown Insurance to give your car coverage for every possibility.

Car Buying Process Step 8

Step 8: Enjoy your new ride!

Get a quick tutorial on your car’s features and make sure your new ride is spick-and-span, inside and out. With a final handshake and passing the keys over, the car is officially yours! Have fun, drive responsibly and don’t forget to schedule your loan payments!

Ready to get started?

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