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How to Buy a New Car in 7 Steps
Follow our step-by-step guide to pick the right new car for you and get the best deal possible.
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
Funto Omojola started writing for NerdWallet in 2020. Before joining NerdWallet, she covered personal finance-related topics for financial websites and organizations and has over five years of experience writing about money. Her writing has been featured in MarketWatch, Yahoo Finance, Realtor.com, New York Post, and Nasdaq, among others. Funto earned a bachelor's degree in global and international studies and an MFA from Bard College. She is based in Brooklyn, New York.
Julie Myhre-Nunes Assigning Editor | Auto loans, consumer credit
Julie Myhre-Nunes helps lead auto loans and cars coverage at NerdWallet. She has been in the personal finance space for more than 10 years. Before joining NerdWallet, Julie oversaw editorial teams at NextAdvisor and Red Ventures. Her personal finance insight has been featured on Forbes, The Boston Globe and CNBC. Julie’s writing has been published by USA Today, Business Insider and Wired Insights, among others. Email: [email protected].
Buying a car can be a daunting process. And as the auto market reels from supply chain disruptions, high prices and soaring interest rates, it can be even more difficult to find the car you’re looking for.
But even within these market conditions, there are some tried-and-true steps you can follow, such as getting a preapproved car loan before you even step foot on the lot, that can make buying a new car easier.
» MORE: Look into vehicle financing options before you go car shopping
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
Start by deciding if you want to pay cash or take out a loan for your new car.
Paying cash makes your budgeting process pretty simple, but don’t spend all your savings. And remember that you will also have to pay sales tax, registration and insurance.
Taking out an auto loan is the most common option, but it's important to research financing and get a preapproved car loan before you start shopping for cars. Getting preapproved for a loan will let you know how much you can afford to borrow and what interest rate you’ll likely get. This will not only help you set a budget but, also give you offers for the dealer to beat when you’re negotiating later down the line.
With your preapproval information, you can use a car payment calculator to figure out how much you can afford to put down and what your monthly payments will be. If you can, aim to put down 20% of the purchase price.
2. Research and identify your car’s must-have features
Once you know how much you can afford, you can begin comparing options that might be right for you. When researching, consider how you plan to use your car. For example, if you have a family, you’ll want enough room for everyone, plus ample cargo space. Additionally, making a list of must-have features can help you narrow down your options. For example, if safety is a top priority, you can check the Insurance Institute for Highway Safety for crash test ratings.
Aim to choose models not only for their dependability but also for their low cost of ownership. J.D. Power and Consumer Reports (which requires a paid membership) may be helpful resources; they collect maintenance reports from owners and rate cars for reliability.
When researching, check the total cost of ownership for each model. Some cars are cheap to buy, but will cost a lot in the long run because of insurance, maintenance, repairs and depreciation. Use tools like Kelley Blue Book’s Five-Year Cost to Own or Consumer Reports’ Cost of Vehicle Ownership to estimate these expenses. Sometimes, it may be wiser to pay more for a car upfront than to risk high maintenance costs down the line.
After you’ve established your criteria, search for models that meet them. Many automotive sites and car-buying apps have a car finder tool to help you identify strong candidates, as well as in-depth rankings and research guides. Filter your search according to your budget and desired features. Identify three to five target models to research in more detail.
It’s important to test-drive all the cars you’re interested in so you have a good feel for the different models. Keep the following in mind when test-driving a vehicle:
Set aside a morning or afternoon for the process, and, if possible, do it mid-week when dealerships aren't too busy.
Call ahead and schedule an appointment. That way, the right model will be pulled out and ready to go.
Select a test-drive route that has a bit of everything: hills, rough pavement, curves and even a stretch of highway.
Due to the new-car shortage, it may be hard to find what you want on the lot. You can find dealership inventories online or use an app or website that lets you quickly search multiple dealerships at once.
If nothing is available nearby that fits your needs, try broadening your search radius using an online car-shopping tool like Autolist or Autotrader to cover an entire region.
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Pricing guides such as Kelley Blue Book and Edmunds allow you to cut to the chase and find out what other people in your area are paying for the car you want. To see prices on either company's website, input the car options you want. Note that factors like color, for example, can affect a car’s price.
Additionally, make sure to see what, if any, incentives and rebates are available for the car you want. Most manufacturer websites list current offers, which typically change each month.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.
NerdWallet's ratings are determined by our editorial team. The scoring formula incorporates coverage options, customer experience, customizability, cost and more.