Car Buying: Are You Getting the Best Deal?

Buying a new car is exciting and it could be tempting to rush the deal, but be sure to hit the brakes and make sure you’re getting the most for your money. How much should you spend? How can you make sure you’re getting a good price? Here’s how to drive away with a bargain.

Your Step-by-Step Checklist:

1. Set a budget.
   Take a look at your savings and budget to determine how much you can afford to spend. Remember to consider any changes in insurance, maintenance and fuel costs. Estimate your monthly payment and determine how much you’d like to spend. Then, decide whether you’ll be purchasing a new or used vehicle.
2. Do your research.
   Check reviews and road tests of various models, compare vehicles and check safety information. Learn the invoice priceThe auto manufacturer’s base charge to a dealer, which includes a freight charge (often called a destination or delivery charge)., manufacturer’s suggested retail priceThe Manufacturer’s Suggested Retail Price (MSRP) is an automobile’s recommended selling price. and average selling price of the cars you’re considering to determine a fair target price.
3. Secure financing.
   A dealer’s “special” financing may be tempting, but keep in mind that you may not qualify, and you might need to forgo other incentives or rebates that might work out to be a better deal. Getting pre-approved for an auto loan¹ at your credit union or bank means you walk into the dealership with the amount you can borrow and the interest rate in hand. That knowledge boosts your negotiating power at the dealership—because financing is already in place, you only need to focus on the purchase price (and your trade-in, if any).
4. Time your purchase.
   Dealers tend to reduce prices at the end of the model year or the end of the month or calendar year as a way to manage their inventory and make room for newer models. If you can wait until the end of a model year or even the end of the month, you may drive off with a better deal.
5. Keep an eagle eye on the paperwork.
   Always read all the documents carefully, make sure the numbers match what you’ve agreed upon and look for any additional charges. Get any promises in writing, such as free installation of accessories.

Use this checklist and apply online for a Navy Federal auto loan. When you visit the dealership, you’ll be better prepared for a great deal. By choosing a vehicle that fits your budget with a terrific financing plan in place and at a great price, your only concern will be where to drive first.

¹Credit and collateralProperty or other assets that a borrower offers a lender to secure or back a loan. subject to approval.