The Best Way To Buy A Car VERIFIED

"The single best advice I can give to people is to get preapproved for a car loan from your bank, a credit union or an online lender," says Philip Reed. He's the autos editor at the personal finance site NerdWallet. He also worked undercover at an auto dealership to learn the secrets of the business when he worked for the car-buying site Edmunds.com. So Reed is going to pull back the curtain on the car-buying game.

the best way to buy a car

And shop around for the best rate. "People are being charged more for interest rates than they should be based upon their creditworthiness," says John Van Alst, a lawyer with the National Consumer Law Center.

"Concerning the extended factory warranty, you can always buy it later," says Reed. "So if you're buying a new car, you can buy it in three years from now, just before it goes out of warranty." At that point, if you want the extended warranty, he says, you should call several dealerships and ask for the best price each can offer. That way, he says, you're not rolling the cost into your car loan and paying interest on a service you wouldn't even use for three years because you're still covered by the new car's warranty.

Gap insurance promises to cover any gap between the purchase price of replacing your almost-new car with a brand-new car if your regular insurance doesn't pay for full replacement if your car gets totaled. Van Alst says gap insurance is often overpriced and is fundamentally problematic. If you still want the product, it's best to obtain it through your regular insurance company, not the dealer.

There are lots of ways to pay for a new car and they all work slightly differently. It can be confusing trying to decide which is best for you, so here we will look at the difference between buying with car finance or a bank loan.

"Paying cash is usually your best option because it limits how much you have to pour into a depreciating asset," said Greg McBride, the chief financial analyst at consumer finance site Bankrate.com. "But don't deplete your emergency fund just to buy the car."

Prices are at all-time highs and aren't expected to drop until 2023 at the earliest. If you already have a reliable vehicle, or live in an area with decent public transportation, the best decision might be to hold off on a vehicle purchase.

If you plan to go the used car route, a certified pre-owned vehicles (CPO) will be your best option. In most cases, CPO cars have low mileage and no history of major accidents. They are gently used, pass a thorough dealership inspection, and include a warranty from the original manufacturer.

Most people will get financing directly from the car dealership, but smart buyers shop around for the best loan option. Getting your loan from a dealership can be an expensive mistake if you fail to seek alternative lenders.

We track the best car-buying incentives on our new car deals page. Lease incentives can be found on our lease deals page. Shoppers looking for offers on certified pre-owned cars will find them on our used car deals page.

"The combination of the two basically means that the industry is producing annually four or five million cars less than they could sell," says Pat Ryan, CEO of CoPilot, an app that searches through every dealer to find the best car prices.

With interest rates rising, paying cash for your car is your best action plan. But for most people, that's not a reality. The next best option is to secure financing from a credit union, which offers lower interest rates. Once you figure out your budget, you can base your financing on what you can afford to pay per month.

If you're shopping for a new or used car in today's difficult marketplace, please see "Car Buying Tips for 2022" for our experts' targeted, data-driven advice. Note that the article below was originally written before the chip shortage, back when vehicle prices were relatively stable and predictable. If the shortages continue, there may not be a so-called "best time to buy" for the foreseeable future. The best time in the current market is when you find a dealer that has the vehicle you want and is willing to sell it to you at MSRP or better, without any additional options that you may not need.

A preapproved auto loan starts you out on the right foot. You get an idea of how much you can afford, and you'll have an interest rate that you can then compare to the dealership's financing, which might actually offer the lowest annual percentage rate. Look for a loan application on the mobile web pages of your bank, credit union, or other lenders such as Capital One or Nationwide. It's a good idea to do your own research on which lender will work best for you.

• Call, text or email the internet sales department of three dealerships that have the car you want. Ask each for the total selling price, including any additional accessories that may have already been installed on the car. The best price will be obvious. You also can take that quote and ask the other dealerships to beat it. If you plan on leasing, this is the way to go.

• You can save time and trouble by using Edmunds' new inventory tool, to get a locked-in price that's designed to be comparable to the average price that others are paying in your area. We even label which prices are better than others. Make sure you ask the salesperson to email or text you a breakdown of the "out-the-door price," with all the taxes and fees factored in. That lets you see the total amount you'll be spending.

Use this list as a quick reference guide to point you toward the best place to buy a used car. Each used-car retailer has advantages and disadvantages, so depending on your priority (price? selection? warranty?), several outlets may fit your needs.

Buying a certified pre-owned (CPO) car is a convenient way to find a used car, SUV or truck in excellent condition. CPO vehicles, which are sold from dealerships of the same brand, go through extensive inspections and are reconditioned with factory parts. They also come with the best warranties. General Motors, for example, offers a one-year/12,000-mile bumper-to-bumper warranty and a five-year/100,000-mile powertrain warranty on all of its CPO cars. Our certified program comparison tool can help you see the differences in coverage. But just because they come with warranties doesn't mean they are exactly like new cars. Read "Certified Pre-Owned Cars: A Reality Check" to see what expectations you should have for a CPO car.

Use your best judgment if you do business with independent dealers and make sure you run a vehicle history report for anything you are seriously considering. We also recommend that you read our "Field Guide to Independent Used-Car Lots."

Buying from CarMax is a hassle-free, no-haggle process. All of its salespeople are paid on a flat-commission basis, which means they'll get paid the same amount whether they sell you a BMW or a Ford. This pay system allows salespeople to focus on helping customers find a car that best fits their needs and price range, said a CarMax spokesperson.

Shopping for a car in the private-party market offers a varied selection and a potential opportunity to get the best price, though you sacrifice the convenience of seeing many cars side by side, as you do at dealer lots. Negotiating with a private-party seller is usually much easier than negotiating with a salesperson at a dealership since most car owners haven't received formal sales training. There are many ways to find private-party vehicles. Some of the more popular places to go on the web are Autotrader, Craigslist, CarGurus and eBay Motors.

Our choice for best overall, Autotrader, has been around since the early days of online shopping, and it boasts millions of listings. Those looking to buy should find plenty of options, and those trying to sell on Autotrader should be confident that the site will get plenty of traffic.

As with any auto loan, the key to getting a good deal is shopping around. Check out lease buyout loans from banks, credit unions and online lenders. This way, the leasing company will have to beat the best deal you found on your own.

We often see three-day weekends billed as some of the best times of the year to get a good deal on a new car. Edmunds rated each three-day weekend in 2023 to see which weekends have the best deals for buyers:

As to which is the best way to buy a car? Well it all depends on your situation and your requirements. For a lot of people PCP and PCH are a fantastic way to have a new car every few years and keep the general cost of motoring down. For those who like the change more often subscription could work. It is very important to research and try to align your financial and motoring requirements with the best choice for you.

The prices paid locally for Altimas come from TrueCar.com, one of an array of new digital tools that can help buyers get the best deal. Like so many other industries, the business of selling cars is changing fast. The proliferation of car-buying websites and real-time market data has, for the first time, given car buyers equal footing in the most stressful of transactions.

Drive on streets and a highway or freeway. Be sure to merge and change lanes. Parallel park and try parking in a crowded lot. Back the car up. Those are among the best ways to discover how the vehicle maneuvers and to check for blind spots.

Online car buying sites utilize intelligent search engines to help you compare multiple cars or trucks in your price range. Read our guide to research and discover the best car buying site for you. Plus, learn about what questions to ask before you purchase a car online.

Many banks, credit unions, and online lenders offer financing to help people buy vehicles from private sellers.* You may want to expand your search to include national, regional, and local financial institutions because you never know where you might find the best deal on a car loan. Everyone is familiar with banks, but you might not know as much about credit unions or online lenders. You might be surprised to learn that some credit unions allow anyone to join in exchange for a small fee. You may also be eligible to join a credit union based on where you live or your employer. Online auto lenders are companies that don't have physical branches. You'll handle the entire application process online, and you can usually get help by phone or email if you need it. 041b061a72