Five Easy Steps to
Owning Your Dream Car

Are you buying your first car? Do you want to know the secret to saving thousands of dollars on your new car? This five-step car buying guide will help you go through all the shenanigan of buying a car.

STEP 1: Research

Ok. So you found the car you’ve always dreamed of owning and now have the money to buy it. Does that mean you’ll just jump in at the first deal you find and spend thousands of dollars on that car when there’s a better deal out there waiting for you? No, of course, not. You spend several days online for a ski trip, why not do the same before buying that $30,000 car? Research on a new car can mean the difference between saving some money for car insurance and who knows, other costs, as well.

Considering how things are so much easier these days, you’re in luck. The Internet makes even the most difficult things nothing but chickenfeed. There are countless websites out there that dedicate their content to tips and information on car buying. You can tap into this virtually infinite resource for articles on car deal scams, loan tips, and other topics you need to know about as you prepare yourself to make that lasting investment. However, a word to the wise, be careful of sites that do no more than scam consumers out of their money. If a deal is too good to be true, then it probably is, so exercise caution and be as discriminating as possible; don’t take anything at face value.

Car buying research is two-fold, at best, based as it is on two sets of information that you need to get a hold of. The first concerns itself mainly with price quotes. The second is on your credit score. No smart buyer should even consider going shopping for a new car without these two vital pieces of information on hand.

Quoting Quotes

Below are some websites we highly recommend for research on car price quotes:

• Autoweb.com – For free quotes and zero obligation, this site is it. Aside from low price quotes from over 5000 dealers, the site offers car prices, dealer cost, big savings, and nice interior 360 views. What’s more, it offers rebate lookup by: first – selecting a car and options; second – choosing two dealers for quotes; last – getting a no-haggle competitive price quote

• CarsDirect.com – When it comes to good car buying sites, this site is top on the list. What it does is list your purchase price online instantly and offer you better prices than dealers plus cool 360 views of the interior. It’s online; it’s fast; it’s direct. But most importantly, it’s private and safe, and you still get the manufacturer’s warranty.

• Cars.com – A good source of free car quotes, this site gives them to you with no obligation from up to three local car dealers. The rest is up to you  - from your new car model, style, colors, options, and whatever gizmo you want to add.

Of course, if you prefer to do things manually, there’s always the Yellow Pages for you. Look up any car dealers around your place and check out their offers. There’s no doubt that they want you to buy so they’ll be saying a lot of things to convince you that you are making the right choice. Again, don’t fall asleep at the wheel. Pay attention to what they’re saying and, when necessary, COMPARE.

Giving Credit to Credit Scores

For most people, knowing their blood pressure and cholesterol level is natural. This should also be the case when it comes your own credit score. After all, financially your credit score is your most vital stat. Why? Because it directly controls just how high or how low an interest rate you’ll pay on your car loan.

One of the most common dealer scams out there is to call you two weeks after the sale to say that “financing fell through, we need more cash” or some such. When you ask them how it happened, they’re going to say that there’s a black mark somewhere in your credit history. Credit reports aren’t free. But for only $12-$15, you can improve your chances at avoiding scams like the one discussed above. When you get your credit report, be sure that you add the credit score option so you’ll know exactly where you stand in getting financing for your new car.

Below are good websites where you can get your credit report:

• Equifax
• Consumerinfo
• TrueCredit

STEP 2: Create a Budget

Now that you have everything you need, time for you to formulate a budget based on the information you have. Your budget plan is your blueprint to that new car purchase. It’s your primary guide, vital and indispensable. You do not want to go out there and grope around like a blind man in the dark when closing deals. You want to know where you stand. You want to know your limits. And that is exactly what your budget offers.

Your list of price quotes from your research and your credit score will serve as basis for your budget plan. When buying a new car, one of the first questions you should ask yourself is “How much can I afford?” Follow that with “How much am I willing to spend?” and you should be right on track, budget-wise.

Believe it or not, your car is an investment. Never mind if it depreciates in value with time (and because of that, it can be even considered as a bad investment), it’s still an investment and like all investments, it involves money – your money to be precise.

There’s really nothing to creating a budget. Just take in all the expenses, future or present, and the amount of money you have on hand and that’s it. Of course, you have to know what sort of expenses we’re talking about here and what sort of expenses are involved in car buying.

Here are indispensable costs to be included in the budget:

• Car insurance policy
• Third-party coverage
• Car loan and interest payments
• Add-Ons
• Fuel
• Future garage costs

STEP 3: Shop for Discounts, Rebates, and Incentives

If you’ve done your research well in step 1, the second one should be easy. While you were checking out those sites and checking out the Yellow Pages for car dealers and price quotes, you must have stumbled upon deals that sounded good because of the variety of consumer benefits attached – discounts, rebates and incentives. But just as you’ve learned all those things, you must have also learned to never buy the first time you go in.

Do not immediately jump into contracts and sign that red-dotted line at the bottom part of the page. Find your lowest deal first before signing anything. Do this even if the salesman says that other places can’t match their price. You’ll be surprised at how many times you can prove them wrong.

It doesn’t take a lawyer or a car salesman to negotiate a contract. The mere fact that you are a buyer who knows what he wants is enough to get you through it. If you feel that the salesman is spitting out price quotes that are way off the online quotes you have from your own research, tell him so. He won’t be expecting that and when he realizes that you’re not one of those dumb buyers who take the bait, hook, line, and sinker all the time, you’re in a better position to make demands. See? That’s why research is terribly important. Not only does it stop dealer sales tactics in their tracks, but also it helps you proceed on the deal on your terms, not theirs.

STEP 4: Don’t Wait for Your Car to Go Clunk

Desperate time calls for desperate measures. While that may sound real cool and practical in most instances, it doesn’t apply in car buying. It takes at least two months to shop, decide, haggle, and finally close a deal on a new car. Plus, there’s all the research you have to do. So just how long does it take to buy a new car? I tell you, VERY LONG if you want the best deal.  

One reason why you shouldn’t wait until your car goes clunk is that if your car is dying, you’ll be too desperate to think about the consequences of your actions. You’ll find yourself making hasty decisions and signing deals you should never have signed. And then comes the regret, which is really the bane of all buyers. You don’t want that to happen.

A dealer that knows you’re desperate for a new car is tantamount to handing him your checkbook. You’re giving him an unwarranted advantage over you and pretty soon, you’ll find that you’re not even paying attention to the merits and demerits of making the deal just because you need a car, like NOW.

So rather than dump all your money into fixing that dilapidated thing in your garage you call “car,” take the loss and use the cash towards the new car. Basically, just move on with your life.

STEP 5: Close the Deal

And finally, we’re down to the last step – CLOSING THE DEAL. Well, what’s so tough about that? All you have to do is get the contract, sign it, and own your dream car, right? Wrong. Don’t reduce all your hard work to that. Even if you are down to the last step, don’t take any chances. This is the most important step, not only because it is the last, but because it is final. After you sign that contract, the deal’s closed; no more room for re-negotiation.

What you need in completing this final step to car buying successfully is what people term as just “the folder.” It’s a must-have. And don’t worry. It’s not something you have to buy. It’s been with you all this time, if you did your car buying as shown here.

The folder contains the following:

• Credit report with credit score
• New car purchase quotes
• Discounts, rebates, and dealer incentives
• Car loan pre-approval form and spreadsheets
• Insurance quotes
• Extended Warranty Quotes

The above-mentioned are your weapons and shield when you enter a deal. They are material to negotiation. While your salesman has his savvy consumer-talk to egg you into making the deal, you have your own way of deflecting any bad deals he throws your way. After all, your goal is to buy that dream car of yours for the best possible deal. Their goal is to keep you from leaving without buying. It’s a smart buyer that knows his stuff.