Steps in the Car Buying Process

Purchasing a new or used vehicle can be a time consuming and disorientating process for many car buyers, especially first time buyers. Many buyers many be wondering what the process is from the time the decision is made to purchase a car to when the vehicle can be transferred into their possession. Luckily, there are only a few essential steps in the car buying process such as selecting the right vehicle, having a used vehicle inspected, negotiating a price, securing financing and complying with state regulations.

Determine Your Vehicle Needs

Every individual's vehicle needs will be different depending upon their situation. Before purchasing a new or used car you should carefully consider your budget as well as the size and safety features that you will require in a vehicle. Research vehicles that meet you needs by visiting manufacturer's websites or reading consumer reports.

Inspection

If you are considering a used vehicle you should have it inspected by a mechanic to determine whether or not there are any problems or underlying issues with the car. This is especially true if you are buying the vehicle "as-is" without a warranty or from a private party. New vehicles will not require an inspection since the buyer is typically protected under the lemon law.

Negotiating a Price

Most car dealerships and private party sellers are willing to negotiate on the price of the vehicle. This is especially true in the case of used cars; however, you should always attempt to negotiate a lower price on new vehicles as well. The first step in price negotiation is understanding the market value of the vehicle. Market values for nearly every make, model and year car are listed in the Kelley Blue Book. Once you know the market price, you should make an offer for the vehicle that is slightly less that the market price. You should rarely accept a price that is higher than the market value of the vehicle.

Financing

After you have settled on a price for a vehicle you must work out a financing agreement unless you intend to pay for the total cost of the vehicle upfront. Financing is an extension of credit by a bank or financial institution that allows car buyers to make payments overtime by paying back the principal with interest in monthly installments. You can secure financing by requesting a car loan from your bank or a car dealership's financing department.

State Requirements

All states require drivers to maintain insurance and registration on their vehicles. Your new vehicle will not come with either of these items. Before you drive your new car off the lot, you must purchase a car insurance policy from an insurance agency. If you financed the purchase of your vehicle, you will need collision insurance which will cover the cost of getting the vehicle repaired in the event that you are in an accident. Some dealerships will provide you with a temporary registration. You will need to file paperwork with your state's Department of Motor Vehicles in order to secure a permanent registration on the new vehicle.