Top Why Buy a New Car?

Buying a car "fresh off the lot" is a goal for many, and has somehow become a rite of passage in the American psyche. Once we get to the point in our career where we feel secure enough to be able to afford a new car, we begin to consider the possibility. A new car is more than a status symbol, it also acts as a validation that we have "made it," an endorsement of some measure of our success.

While some people are content to buy and drive secondhand cars throughout their driving days, most people will purchase a new car at least one time in their lives. Others are convinced that buying new is the only way to buy a car and they will do so time and again every few years.

Before you even begin to think too deeply about buying a new car, take some time to consider why you want to buy a new car. If you have a partner, you'll want to think this decision through first--and then go to them with the idea. Expect some healthy questioning from them about the reasons you want to buy a new car, and be willing to negotiate (and perhaps postpone) the decision for the good of the family if necessary.

As you go through this preliminary brainstorming step, you will want to determine why you want to buy a new car. There are a myriad of good reasons to do so, but some of the primary reasons are listed below:

Prestige: Let's face it; buying a new car can do a lot for your image (and ego). Your choice of make, model, extras, and even car color speaks volumes about who you are and how you see yourself in our society. It also makes a statement to friends and family members. The appeal of a new car is heady from a psychological perspective, but don't over think it too much. If you've worked hard to get to the position of being able to afford a new car, enjoy it--you've earned it!

Technology: New cars offer the latest in engineering, style and mechanical innovation. The manufacturers compete to offer the very best in their new makes and models. Fuel efficiency and emissions control improvements can be appealing to those who are concerned with environmental issues. Because the makers continually improve and add technological advances in their newest models, those who appreciate the state of the art are drawn to the cutting edge components of a new car.

Safety: Along the same lines as above, manufacturers continue to make improvements on safety features. The inclusion of such features as side air bags and other features are only available on the latest models. Many families choose to purchase the latest models in order to best protect their children and themselves.

Reliability: New cars provide an element of worry-free driving for an extended period of time. Drivers of new cars appreciate the peace of mind that a new, mechanically sound vehicle provides. Guarantees, warranties and the newer extended warranties ensure that owners of new cars will be spared the expense of costly repairs for several years to come. With the advent of computerized systems on cars, gone are the days of the backyard mechanic; many women and men who never signed up for auto shop find the reliability factor in a new car especially appealing.

Once you have determined that you want to buy a new car (and why you do), you are ready to move along to the next step:

Top Can You Afford a New Car?

Only you can decide how much you can afford to pay for a new car. The desire to own a new car cannot be allowed to overwhelm the practical considerations of your budget. Take off the rose-colored glasses―now is the time to take a brutally honest look at your finances.

Many financial experts state that you should spend no more than 20% of your net income on a monthly car payment. To determine what that number is, you'll need to figure your total net income (take home pay after taxes) and then subtract all your fixed expenses. The remaining amount is your net spendable income. By figuring that out, you can then determine what 20% will be in dollars and cents.

Once you know that number, you can answer three important questions:

• How much can you afford as a down payment?

• How much can you afford in monthly payments?

• How much should you spend on the total price?

While you are working this out, be aware that there will be costs over and above the price of the car itself that will need to be factored in such as insurance, sales taxes, licensing fees, and possibly dealer fees payable at the time of purchase (more about these later).

Both the state sales tax rate and the state licensing fees will vary depending on where you live. Once you know how much you can afford to spend for the total price of the vehicle, calculate those figures based on your state's rates. Those expenses can inflate the total cost of the car beyond your budget, and may require you to shop for a less expensive model.

Many lending and car selling websites offer a loan calculator tool to use online. Before ever stepping into a dealer showroom, run the numbers based on the price of the car, the taxes and licensing fees, any other closing fees you may anticipate, and the rate that you expect to get for financing. Once you know those figures, you will know what your probable monthly payment will be.

In addition to the budgetary considerations, you'll now also want to take a close look at your lifestyle before shopping for a new car. Job security and life stability should come into play before you decide to buy a new car. For example, if you are new on the job or having difficulties in your marriage, your financial future may be changing soon. Before signing a contract for payments for the next several years, be absolutely sure that your career and lifestyle will be able to support such a decision.

After taking a serious look at how much money you can afford for a new car, it is time to fix a price. Write it down and take that number with you when you go to the dealership. Having that number firmly in your mind will help you stay within your budget despite the best efforts of a car salesperson to upgrade you to a more expensive model or tacking on extra features that will increase the total price.

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Top Window Shopping For a New Car

Once you know how much you can reasonable afford for a new car, it is time to do some shopping―with your eyes only. Now is the time to see what is out there in your price range, and which makes and models will best suit your needs. Make a list of makes and models and features you want to consider and then do some searching. Areas to research a new car can include: newspapers, online, television, at the dealership and talking with friends and family.

The time spent on this step narrows the field of cars you are interested in, and brings you to the next invaluable step:

Top Serious New Car Research

Hopefully, by this time you have decided on an affordable price range, and have chosen two or three models to concentrate on through the research process. This is the time to bring out all your study and research skills. In today's world, most people will conduct this research online on a home computer, but much of the information is also available at the newsstand or your local library.

To help you learn how to research buying a new car, we have compiled a special guide.

Once all your background research has been compiled, you'll want to consider the next step:

Top New Cars: Buying Online or at the Dealership?

The newest way to buy a new car is to buy via the Internet. Hundreds of car-selling sites provide the services where you simply choose all the specifications of the vehicle you are looking for, and they will do the legwork to find such a car in your immediate area. While this method of car buying may still be in its infancy, it may be particularly useful to those with little time―and an adventurous spirit. Before committing to this method of car buying, however, be sure to read and thoroughly understand the small print on the agreement.

For most car shoppers, the trip to a dealership is inevitable. If you have seriously crunched your budget and have a firm price in mind, and if you have done your research, you should anticipate a successful buying trip. The vast majority of car sellers are on the up-and-up and they want to make the process of buying a car as easy as possible for both parties involved.

A strong dose of self-confidence is in order, however, for that first trip to the lot. You don't want to get talked into more of a car, and more of a monthly payment, than you have planned for should you run into a high-pressure salesperson.

Remember that if at any time you feel overwhelmed by the experience, or begin to feel as though you are being treated dishonestly, discourteously, or unfairly―walk away. There are many car dealerships to choose from right around the corner. If, however, you are being treated right, it is time to move along to the next step:

Top New Cars: How the Car Salesperson Can Help

You've chosen which dealership to visit because of the model of cars it sells. Once on the lot, you will be assigned a salesperson to show you the cars they offer. The initial contact with that salesperson is likely to dictate how the entire transaction will be conducted. Their job is to ask some opening questions to ascertain what type of vehicle you are shopping for and in what price range. Your job is to come across as a qualified, educated consumer. If you are adamant about buying a particular model, let them know that right away; if not, tell them which type of vehicle and your price range. Now is also the time to let them know if you have any specific requirements, such as 4-wheel drive or automatic transmission.

The salesperson will guide you to the specific model you are interested in, or some comparable models. Every car will have a "spec sheet" visible (usually referred to as the window sticker) that lists the features of that particular car. Now would be a good time to pull out your research file to compare the cars' listings with your list of predetermined choices. Review the equipment offered on each vehicle until you find a suitable match.

Once you are satisfied that you have found a car that appeals to you, has the features you are looking for, and is within your price range, it is time to move on to the next step:

Top Schedule a Road Test

No one would ever consider buying a new car without taking it out for a spin. All dealers expect you to want to drive the car, and they will likely do their level best to get you behind the wheel and onto the street.

Many dealerships will schedule appointments for a test drive over the phone. Remember to bring with you your driver's license and proof of current insurance, it is expected that the dealer will need a copy of these documents before allowing you to drive their vehicles.

If you are already at the dealership, and become interested in a certain vehicle, take a few minutes to sit in the vehicle. Check to see if the car "fits" you. Does the car provide maximum visibility from the front, sides and the rear? Are all controls within easy reach? Is the driver's seat comfortable and suitable for long-distance driving? Now is the time to pay particular attention to creature comforts; the bottom line should be whether the primary driver feels safe and comfortable.

When you find a car that suits you, take it for a test drive. Understand that the salesperson will be going along for the ride. Normally, the salesperson will drive the car off the lot and take you on a routine route. At some point, they will pull over and allow you to get behind the wheel.

Take the time to get comfortable behind the wheel before pulling out from the curb. Adjust your seats and mirrors to provide maximum visibility for your body, and familiarize yourself with the location of critical features such as: the horn, turn signals, windshield wipers, emergency flashers, and parking brake. As you begin to drive, reach over and turn off any music system; you will want to listen to the engine and be able to hear any unusual noises.

If your style of driving includes anything out of the norm, ask that you be allowed to duplicate that to see how it will handle. Always take a car onto the highway to determine the strength of acceleration; test the braking system; and drive up hills to check out the engine capacity.

It is likely that as you are driving, the salesperson will be both touting the benefits of this particular car and asking you some leading questions. Besides needing to concentrate on driving an unfamiliar car, it is best to stay non-committal about a potential sale during the test drive; once you get back to the dealership, you can get down to "brass tachs" if you are ready to buy the car. If you are ready to seal the deal, you are ready for the next step:

Top New Cars: Making the Commitment

So, you've found the car of your dreams with all the features you want at the price you want to pay. What comes next? Actually the steps leading to the moment of commitment is for many people, the most difficult. This is the time when you will hammer out the price of the car. It is also the time to discuss financing with your salesperson if you haven't already arranged private financing.

In most cases, the salesperson will create a worksheet where they will write down the particulars of the car being negotiated and will probably pencil in their first price. Both parties expect a certain amount of negotiation at this point. After making your initial offer, the salesperson may counter offer or they may remove themselves to discuss your offer with the sales manager. At some point, they will come back to you with another offer; after all, they are in the business of selling cars.

It is not uncommon for these offers and counters to take some time. Relax, and don't feel pressured to accept any deal that you are not completely comfortable with. While some consumer advocates encourage buyers to stage some theatrics should the deal not be coming together as well or quickly as you had envisioned, it doesn't usually help to threaten to leave or walk away from a pending deal. Instead, stay calm and restate your offer.

However, should the salesperson become heavy handed or the two of you have genuinely reached an impasse on your preferred price, you can always leave and go to another dealer. They know this is an option for you too, so it is likely that somewhere along the line, the logjam will be broken.

Once you strike the deal, it is time to review the paperwork and the official contract. If you are financing through the dealership, be sure to understand all the conditions. Read through all forms very carefully, paying particular attention to any blank spaces or figures that seem to be inflated. Question the salesperson or finance manager on each and every item that you do not fully understand. Only when you are absolutely, positively certain that you understand all aspects of the contract should you sign the papers.

At some point the time will come when you need to pull out your checkbook.

Write the check for the agreed upon down payment and make copious notes on the check itself, including the VIN number of the purchased vehicle.

Now that you have taken the big step, there is another step to take:

Top New Cars: Before You Drive Away

You've filled out the paperwork, signed the contact, written a check for the down payment, and you may even be holding a new set of keys, but there are still a couple of things to do before taking official ownership.

One critical thing to do is to verify the car's vehicle identification number (VIN). If you haven't written it down and brought it into the sales office with you, be sure to take the time now to match up the VIN on all your paperwork to both the sticker on the car and the actual VIN located on the car itself.

Inspect the vehicle one more time, looking for any blemishes or imperfections that you may not have noticed during the test drive. If there are problems, have the dealer write down the list of items to be repaired, and insist that those repairs be completed by the service department within 30 days and paid for by the dealer. Get all of these details in writing (with signatures) before leaving.

If the issue of insurance coverage for the vehicle hasn't been raised earlier, now is the time to bring it up. If you have prearranged temporary coverage through your own insurance agent, be prepared to give the dealer proof. If you are planning to set up your own coverage, you can call your insurance company from the dealership and have policy proof faxed over. If you are financing your new car through the dealership, they will be happy to set up insurance coverage for you.

Once these last minute details are in order, you are ready to move along to the final step:

Top New Cars: After the Sale

Buying a new car is not an easy task for most people; it can be time consuming, stressful and expensive. However, if you have followed the steps in this guide, you will have eliminated some of the classic pitfalls that can befall an inexperienced car shopper. Educating yourself, setting a price you can afford (and sticking to it), and understanding the entire buying process goes a long way to make the buying experience much more positive and may even eliminate the possibility of any buyer's remorse.

Taking possession of a new car is an exhilarating and exciting time. Pride of ownership and the accomplishment of having made the deal create a sense of near euphoria. To best enjoy that remarkable feeling there is only one thing left to do―go for a drive in your brand new car.

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