The New Car Buying Process

Buying a new car takes more than just walking into a dealership and choosing the one you like. To get the best deal on a new car you have to follow a specific new car buying process even before walking into the dealership. In fact, if you do thorough research and buy a new car at the right price, according to the experts at Edmunds, you may be able to finance a new car at lower monthly payment than what you are now paying.

Research

Any new car buying process needs to start with thorough research. Investigate suggested invoice and retail pricing, any special rebates available by the manufacturer and any other cost related information, by visiting the car maker's website and reading about the different models you like. Learn of discounts or financing methods available for these models. When you make your final car dealership visit you want to know exactly what car model you want, color and special features you need. This knowledge will give you better negotiating capabilities. You should also decide whether you actually want to purchase or lease the vehicle before entering a dealership.

Insurance

Before considering final new car options, call your insurance provider to get a quote on what a yearly premium will cost, as this information may influence your final car buying decision. Luxury or sports cars are known to have higher insurance premiums that may make purchasing the vehicle out of your budget range.

Credit Score

In any new car buying process your credit score will determine your final purchase price. People with a bad credit history and a poor credit score will have to pay a higher interest rate of as much as much as 20 to 24 percent. Scores below 720 will not get that special 0 percent new car financing rate. Pull a copy of your credit report before visiting a car dealership. Give yourself enough time to clean up your credit and raise your credit score before buying a car. This way you get a better car purchase price. Raising the credit score can take at least 60 days, so don't apply for new auto financing until you have resolved any credit disputes. Try to get your credit score to a 680 or above score, making you a prime borrower. Find a copy of your credit score at Experian, Equifax or TransUnion.

Cash Back or APR Decisions

Some dealerships offer either special low APR or cash back programs when buying a new car. The choice you make will depend on how long you plan on keeping the vehicle. For instance, if you plan on keeping the car less than three years you should considered taking the cash back, but if you plan on keeping the car for four or more years then the low APR is the option you want to choose.