7 things no one tells you about buying a new car


Shopping for and purchasing a brand new car is exciting — but it can also seem slightly overwhelming, especially when you’re in the market for a new model for the first time. There’s certainly no shortage of brands and models that come with many different features, capabilities and price tags.

But it doesn’t have to be overwhelming. You can go into the process informed about the details that go into buying a car, which will help you stay confident throughout the entire process — resulting in an investment purchase with the features you need and at a price you can afford.

Here are seven tips to keep in mind when shopping for a new car.

1. Honesty is the best policy when it comes to dealing with a salesperson

Through the years, pop culture has created a perception that car salespersons aren’t particularly honest and will do whatever they can to swindle you — which has led people to believe they should in turn try to swindle salespersons. It turns out this isn’t the most effective move.

Think about it: they negotiate car deals every day, while you do it once every few years (if even that often). If you’re open about your objectives, buying timeframe, finances and the condition of your trade-in (if you have one), the salesperson will respect you and your needs, which helps make the process easier and more efficient for you.

2. Cap your total transportation expense at around 10 percent of your monthly income

When you’re shopping for a new car, it’s crucial you have an idea of not only how much you can spend on the car itself, but also roughly how much you can afford to spend on average in total vehicle-related costs — including car payments, insurance, fuel, etc. — which should hover somewhere around 10 percent or less of your total income.

If you’re buying, you have some wiggle room and might be able to go a bit higher than 10 percent, since you’ll actually own the vehicle as opposed to leasing it — but remember that cars depreciate rapidly, unlike other assets like homes, which can gain value over time. That won’t happen with a car until it becomes an antique.

One way to generate a ballpark estimate on how much you’ll spend is by calculating its 5-Year Cost to Own figure — which is the total you’ll likely have to cover during the first five years of owning your car. Check out this article for a ton of information on 5-Year Cost to Own.

3. You should consider the future when buying in the present

It’s tough (and sometimes impossible) to predict the future, but you can make some educated guesses about how long you’d like to keep your new car, and what might happen in your life during those years. Doing so can help you choose the kind of car that is not only right for you now, but will also continue to stay appropriate for your lifestyle for years to come.

For example, if you’re a newlywed couple buying your first vehicle together, a small, sleek two-door might seem like a great choice — but it becomes less so if you have kids in the next few years and have to outfit your vehicle with car seats.

4. It’s important to balance desire with financial reality

Don’t let a dream car’s immediate appeal trick you into making an impulsive and unwise fiscal decision. Some people find themselves with financial difficulties because they’ve purchased or leased a car that was above their financial means. Before you start shopping, think about some of the features you’d find in your dream car, and you might be able to find something within your budget that has some of them or at least something similar.

5. The MSRP is a guideline, not a set number

That sticker you see on a new car at the lot usually includes the Manufacturer’s Suggested Retail Price (MSRP) — but that’s a number you can negotiate. Through Kelley Blue Book, you can look up pretty much any vehicle’s Fair Market Price and Fair Purchase Price, which give you insight into what most other people are spending on a make and model. In most cases, these numbers are actually below the MSRP — and what better negotiation tool can you have to talk a salesperson down than letting them know you’re already aware most people are paying lower than sticker price, and by how much?

6. It’s in your best interest to pre-qualify for a loan

If you’re looking for financing help, you can hit up a bank or credit union before you head to the dealership to see what kind of loan you can secure beforehand. The dealer might match or even beat your rate, but if they don’t, you’ll already have part of your payment plan in place.

7. You should research service packages before you hit the lot

Picking out the vehicle itself is, of course, only part of the purchasing process. Once you’ve chosen your ride, you’ll then have to choose what kinds of warranty, maintenance and service packages you want — and can afford to — invest in. Do a little digging into offerings and options before you hit the dealership, so you’re not surprised and overwhelmed with the options they’ll present to you while finalizing the deal.

For more new car buying tips, check out

Check out this article for more new car buying tips, and visit KBB.com for reviews and information that will help you get into your next ride.