Buying a new car is a major decision. After a home, it’s probably the largest purchase you’ll make. Whether you plan to keep your car for a few years or run it into the ground, it’s important to know exactly what you’re buying, what protections come with the car and how — and how much — you’ll be paying for it over its lifetime.
So that you can get the best car for the best deal, GOBankingRates spoke to auto experts to find out their tips for buying a new car and the questions you should ask a car dealer before signing on the dotted line.
Last updated: Oct. 11, 2019
Questions To Ask Yourself First
Before you go to the dealership, it’s important to have a clear idea of what car you want, how much you’re able to spend and how you plan to finance the purchase.
Alain Nana-Sinkam, vice president of strategic initiatives at TrueCar, recommends prospective buyers ask themselves the following questions: “How long am I planning on owning this car? Do I want to buy and drive it until the wheels turn square, or do I think I’m going to want another car three years from now? If I’m going to finance and I’m going to have a monthly payment, what do I want that monthly payment to be? What is the top end of that monthly payment range? How am I going to use the vehicle? What sort of gas mileage is important to me? Does my commute require a car that’s better on gas?”
“Being honest with yourself about the answers to those questions will make you more comfortable to go in and ask questions,” he said.
Once you’ve answered those questions for yourself and have a clear idea of what you want and what you can afford, ready a list of questions for your car dealer.
What Are the Car's Safety Features?
“It is becoming more and more critical for car shoppers to become knowledgeable about advanced safety systems and make sure any car they are considering has the technology they want,” said John Vincent, senior reporter for U.S. News Best Cars. “Different automakers call systems, such as automatic emergency braking, by different names, which can be confusing and leads to buying mistakes.”
What Other Features Does It Come With?
From tech features to a sunroof, the car you want can come with a number of add-ons — things that you may or may not want. Keep in mind that these bells and whistles can add to the price, so be sure they’re features you really want because you’ll be paying for them if you go with that particular vehicle.
Can I Test Drive This on the Highway?
“When you go on a test drive, you should drive the car in an environment that you normally drive in,” said Nana-Sinkam. “If you do a lot of highway driving, you should be getting it out there. If you do a lot of stop-and-go city [driving], then you should be doing that. That’s so you don’t drive the car in one environment and it’s great, and then you find that you don’t like the way the transmission bucks when you step on the accelerator and that sort of thing.”
Can I Test Drive a Used Version of the Car?
“When you show up to test drive the new car, you should ask to drive a used version of that car,” said Nana-Sinkam. “Every car’s drive is nice when it’s brand new, but you want to understand, 2 1/2 years in, what is it going to be like driving this car? Am I still going to love it? Chances are they’re going to have a three-year-old version of the car that you can drive. Go drive that one and see if it still feels solid. Does it still meet all of your needs? Do you still like it? Because that’s the car that you’re going to be driving down the road, literally, and you want to understand what that’s like.”
What Incentives Are You Offering?
Nana-Sinkam said buyers should ask about current incentives, how long they are available and which ones can be combined.
“There are certain incentives that you only get if you lease and others that you only get if you go through the manufacturer’s own finance company,” he said. “Understanding the compatibility of those incentives is really important. Sometimes there will be factory and dealer incentives that aren’t advertised. These will sometimes happen at the end of the month or if there’s a model that’s high in inventory that the dealers need to get rid of. If those are available, they can help you to make the car more affordable.”
Are There Any Manufacturer Rebates Available?
“These are cashback [rebates] paid [to you] after you buy some models,” said Lev Barinskiy, CEO of SmartFinancial. “Ask to see those cars first. Keep in mind that despite the rebate, you may still get taxed for the full sticker price.”
Can You Come Down on the Price?
“Although automakers issue a Manufacturer Suggested Retail Price (MSRP) with each vehicle, smart shoppers will plan and ask to negotiate below this number,” said Matt Smith, senior editor at CarGurus. “Instead of MSRP, research the vehicle’s invoice price — that’s the price the dealership likely paid for the car. With incentives and ‘holdbacks’ factored in, most dealerships will have room to cut a deal closer to the invoice price than the MSRP.”
Is There Special Financing Available?
“As far as financing is concerned, understand whether there are special interest rates or special lease programs that are available,” said Nana-Sinkam. “Ask, ‘What rates are available if I finance through your bank instead of bringing in my own financing from my bank or credit union?'”
Am I Eligible for Tax Credits With This Car?
“All electric and plug-in hybrids can earn you anywhere between $2,000 and $7,500 in certain areas,” said Barinskiy. “There are also federal tax credits.”
What Warranty Is Available?
“You want to ask about the warranty that’s available,” said Nana-Sinkam. “On a new car, you want to understand what else it covers other than stuff that breaks.”
Does the Warranty Cover Any Sort of Maintenance?
Nana-Sinkam said that it’s important to ask if the warranty covers components that wear out or need to be replaced regularly, such as oil, brakes and wipers.
“That helps you understand what your cost of ownership is going to be because those are things you know are going to come up in 2,000 or 3,000 miles,” he said.
What Maintenance Costs Can I Expect After the Life of the Warranty?
Even if maintenance is included in the warranty, these costs could be paid for only the first two years or 20,000 miles. Ask about the typical costs for oil changes, new tires, brake replacements and other maintenance you will need to regularly pay for over the life of the car.
Are There Wrap-Around Programs Available?
A wrap policy is not included in the cost of the car, but it can provide extra protections that don’t come standard in the warranty. A wrap policy generally extends the bumper-to-bumper warranty.
“You can negotiate a price for that type of coverage if that’s something that you’re interested in,” said Nana-Sinkam.
How Much Will You Pay Me for My Old Car?
If you’re trading in a car you already own and don’t want to deal with selling it yourself, you can sell it directly to the dealer. However, different dealers might offer you different prices. Use online resources such as the Kelley Blue Book to determine how much your car is worth. You should also ask several dealers how much they are willing to pay for your trade-in and go with the one that’s willing to pay the most if other terms and conditions on the car you want to buy are equivalent.
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Can I See the Full Purchase Agreement?
Before you agree to a price for the down payment and monthly payments, you should ask to see the purchase agreement for a breakdown of the costs, including any fees and services. If there is an add-on or accessory you don’t want or need, be sure to flag that so you don’t end up paying for it.
What Are the Loan Terms?
“Buyers should know the specific terms of any auto loan they’re signing up for,” said Vincent. “That includes the number of months they will be paying, the interest rate they’re being charged, and whether there is a pre-payment penalty on the loan. The best way to get a great deal on auto financing is to have a pre-approved auto loan long before you head to the dealership. If you don’t have an offer in hand, the dealership won’t have any incentive to find you a better deal.”
Vincent also noted that it’s important to pay attention to how long the loan is for — the longer the loan, the more interest you will be paying.
“If the dealer shows you loan terms that are longer than 72 months, ask them to re-run the numbers with a shorter loan,” he said. “If you can’t afford the payments on a six-year or shorter loan, you can’t afford the car.”
Has My Loan Been Approved by the Lender?
“Before you sign any loan paperwork beyond a loan application, it is critical to ask if your auto loan has been approved by the lender,” said Vincent. “If they cannot provide proof that it has, don’t sign the loan paperwork. Driving away from a dealer before a loan is finalized opens you up to the yo-yo, or spot financing, scam. It’s where a dealer calls you a week or so after you’ve taken the car home to tell you that your loan fell through and you have to come back to sign new paperwork. When you do, you’re faced with financing that’s much more expensive than the deal you originally agreed to.”
Can I Get a Loaner Car When My Car Is In the Shop?
Nana-Sinkam said you also should talk to the dealership maintenance department to find out if they offer any conveniences to help you if you need to drop your car off for repairs, such as loaner cars or a shuttle service.
“What we’re talking about is living with the car after the purchase — those are things you want to understand,” he said. “If a dealer says, ‘I’ll always have a car for you when your car is in the shop,’ or ‘My shuttle will take you home and we’ll pick you up when it’s done,’ that represents what it’s going to be like to live with this car day in and day out.”
Can You Deliver the Vehicle?
If you’re buying from a dealership that’s far from your home, or an online dealership, having the car delivered to you will save you a lot of hassle.
Can I Take Some Time To Make a Final Decision?
“Even though new car sales events may seem like they last only a couple of days or over a long weekend, in reality, most of these sales will be available all month long,” said Smith. “If you are offered a ‘limited time only’ deal but you need an extra few days to think about it, tell the salesperson that you will get back to them. More often than not, the offer will still be available.”
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About the Author
Gabrielle joined GOBankingRates in 2017 and brings with her a decade of experience in the journalism industry. Before joining the team, she was a staff writer-reporter for People Magazine and People.com. Her work has also appeared on E! Online, Us Weekly, Patch, Sweety High and Discover Los Angeles, and she has been featured on “Good Morning America” as a celebrity news expert.