Buying a new (or new to you) vehicle is exciting! Owning a vehicle makes it possible to drive to work and medical appointments, take your children to activities, buy groceries, and offer to drive for neighbors and family members who may not have a way to get around! 

Before you sign for a new or used vehicle, first, consider a few things – this is a long-term commitment especially if you are financing, and car repairs can be very costly. And these days, just buying gas puts a huge dent in your budget! 

Stressful times like these lead to opportunities for scammers and fraudulent dealers to pounce on those in need. Some unscrupulous dealers may advertise a particular vehicle, (or list themselves as “military friendly” or “senior-friendly” to lure you to the dealership); then, when you arrive, they tell you that the particular vehicle is not available anymore and try to sell you another vehicle that is considerably higher in price. If it’s not what you were led to believe, or you just don’t want it, walk away. 

The first step Is to figure out what you can afford, and unless you are paying cash, shop for financing before shopping for a car. By getting pre-approved for financing, you will know the terms, the annual percentage rate (APR), the length of the loan, and the maximum amount you can borrow. 

The most important thing to do before buying a car is to put together a budget that includes all expenses related to owning a vehicle - loan payments (if you are financing), state and local property taxes, insurance, gas, routine maintenance, estimated emergency expenses like a flat tire or a cracked windshield, overnight parking fees, registration fees, and unexpected costs. 

Once you have developed a workable budget, you can move on to shop for that new or used vehicle with the knowledge and security that once purchased, you will be able to afford to buy and maintain your vehicle! 

A few tips on how to negotiate a loan: 

You have more control over the situation than you think. You can ask questions as well as negotiate the terms of the loan, including the interest rate. And don’t be afraid to walk away if you want to look for other options. 

• Check your credit score. Make sure it is accurate. You can do that at https://www.annualcreditreport.com/index.action
• If your score is low, try credit unions and different banks, as well as online lenders. Get estimates with details on loan repayment and interest rates. In this way, you can negotiate a competitive interest rate at the dealership.

Once you have your financing in place, you can begin the fun part – searching for the car you want at the price you can afford! 

Here are a few ways to make sure you are getting the best deal possible: 

• Look for a “certified pre-owned” car. Research your favorite car models online, comparing prices and features. Visits a few dealerships to test-drive several certified, pre-owned vehicles.
• If you are looking at vehicles in private sales, have a mechanic you trust check out the vehicle before you buy it. It may cost $50.00 - $100.00 but is worth it to ensure that the vehicle is safe and in good shape. A mechanic can also tell you if there is a problem that can be easily fixed, and that knowledge may help you negotiate a better price.
• Once you have a vehicle you like, ask the dealer to send you the total price of the car, called the “out-the-door” price, including taxes and fees. That will help you make comparisons with other offers and shop around for the best deal.
• You might be tempted by the extras – but add-ons are not free. Don’t be tempted by the fancy feature if it isn’t within your budget. Common add-ons include Guaranteed Asset Protection (GAP insurance), window etching, and extended warranties and service contracts. If you don’t want an add-on, just say no. Ask questions about the coverage, when it can be used, what is the limit of coverage, and if there are associated costs you will have to pay out-of-pocket. Ask questions when you don’t understand something complicated – buying a new car is confusing and unfamiliar to many. Dealers will use your lack of knowledge to lure you into spending more money.
• Make sure, if you are making a private purchase, that all the required paperwork is in order and the seller fills out all the necessary forms.

Bravo!! You’ve done your research, you’ve compared loans and vehicles, and you are now the proud owner of a vehicle – the next step is the DMV for registration! 

And as always, pass this information on to family and friends. 

This article was written by Catherine Blinder, chief education, and outreach officer of the Department of Consumer Protection of the State of Connecticut. To learn more about how the Department of Consumer Protection can help, visit us online at www.ct.gov/dcp.  

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