Planning to buy a new car? Here are 10 essential tips for buying a new car to help you save money and make smarter choices during your next vehicle purchase. Use this practical new-car buying guide to protect your budget and avoid costly mistakes.
I’ve noticed many people paying extremely high monthly car payments. I personally know several people who spend over $1,000 a month on car loans and struggle to cover that plus their other bills.
So today I’ll share practical tips for buying a new car so you can cut costs and make a better decision when buying your next vehicle.
According to USA Today, the average new car price is about $37,000, and buyers typically pay roughly $550 a month with loans averaging 69 months. Many buyers choose more expensive cars and accept high interest rates to make monthly payments “affordable.”
In 2019 Edmunds reported average annual interest rates around 6.19%, and I’ve even seen buyers stuck with 20% or higher. To lower monthly payments, people are stretching loan terms longer. While 72 months once felt extreme, 84 months and even longer are increasingly common.
I’m not saying you should never finance or buy a new car—but I do want buyers to be more informed and mindful about vehicle spending.
This article covers the best tips for buying a new car so you can save money on your next purchase. Many of these tips also apply to buying used cars.
Not every dealership or salesperson is out to get you. My husband used to be a new car salesman (and yes, he was a good one), and he shared some of the tips in this list. Still, the car-buying process is stressful for most people.
Whether buying new or used, there are several useful tips and tricks to help you leave with the best deal. Many options and add-ons are presented during the purchase process, and if you aren’t informed you may end up confused or overpaying.
No matter whether your next car costs $500 or $50,000, you want the best deal possible. Knowledge is your best tool to avoid regret.
Cars are expensive and provide plenty of opportunity to make mistakes. You might buy a car that doesn’t meet your needs, or one that proves too costly to maintain. From low-cost reliable used vehicles to pricier new models, we’ve owned a variety and used the following practices to get the right deals.
Before listing the top tips for buying a new car, here are common ways dealerships earn profit—things to be aware of:
- Your trade-in vehicle. Dealerships typically offer less for a trade-in than the car’s retail value. That’s normal business, but if you want maximum value consider selling privately or know the minimum you’ll accept beforehand.
- Manufacturer incentives and bonuses. Dealerships sometimes receive bonuses for meeting sales targets. If a dealer needs to hit quota, they may accept losses on some vehicles to reach that goal—timing can be to your advantage.
- Financing the vehicle. Dealerships earn money arranging loans, often by marking up interest rates. Shop financing options independently before you accept dealer financing.
- Extra options. Add-ons like extended warranties, paint protection, and upgrades are lucrative for dealers and can quickly increase your total cost.
Buying a car can be both exciting and nerve-wracking. Below are proven tricks and tips for buying a new car that will help you shop confidently.
Here are my best tips for buying a new car (or used one):
Think about the WHOLE COST of the car.
The most important tip: don’t focus only on the monthly payment. Look at total cost—including principal, interest, taxes, registration, insurance, and ongoing maintenance—so you know what you can truly afford.
Salespeople may extend loan terms to lower monthly payments, but that increases the total interest paid. Some loans now stretch to 96 months, which dramatically raises overall cost. Evaluate the full price before signing.
Used cars can also raise costs in insurance or unexpected repairs, so weigh the full financial picture for any vehicle.
Shop around for your own car financing.
If you must finance, compare loan offers from banks and credit unions before accepting the dealership’s rate. Shopping for financing can save hundreds or even thousands over the life of a loan. Avoid being dazzled by a seemingly “low” monthly payment without checking the interest rate and loan term.
High interest rates—20% or more—are a red flag. If your credit or finances push you into very high rates, consider choosing a less expensive, reliable used car instead.
Visit more than one car dealership.
Shop both online and in person. Research prices, incentives, and available inventory before visiting a dealer so you’re prepared to compare offers and avoid wasting time at a dealership that won’t meet your price.
Skip the extras at the end.
Dealers present add-ons like paint protection, extended warranties, and accessories at signing. These are often profitable for the dealership and easy to finance into your monthly payment, which can disguise their true cost. Evaluate whether you really need them and calculate their long-term expense before agreeing.
Figure out how much your trade-in is worth.
If you plan to trade in a vehicle, know its value ahead of time. Tools like Kelley Blue Book provide a useful estimate that can be a starting point in negotiations. Selling privately often yields more, but trading in is more convenient—just be informed.
Know when to shop.
Timing matters. Dealers are more likely to offer strong deals near the end of the month, quarter, or model year when they’re trying to meet sales targets. Manufacturer incentives and dealership quotas can create windows of opportunity for better pricing.
Don’t be afraid to negotiate.
Almost every part of the purchase is negotiable: price, trade-in value, financing, add-ons, and warranties. Even if a discount is advertised, continue to negotiate to improve the overall deal. Walk away if the terms aren’t acceptable—confidence helps you secure better offers.
Be nice.
Remain courteous and professional. Rudeness rarely helps and can hurt your chances of getting a better deal. Salespeople are evaluated by customer feedback, so a civil approach can encourage more cooperative negotiation and assistance.
Miscellaneous tricks and tips for buying a new car.
Additional practical tips:
- Never shop when you’re hungry or tired—being rested helps you think clearly and negotiate effectively.
- Sometimes dealers list a vehicle as “used” even though it is essentially new because it was briefly registered by the dealer. You can save money this way, but check warranty start dates carefully.
- Buy near the end of a model year if you want discounts on outgoing models.
- Check insurance rates in advance so you aren’t surprised by higher premiums for certain models.
- Research personal property taxes and registration fees in your state and factor them into the vehicle’s total cost.
- Don’t disclose your monthly budget to the salesperson—negotiate on the vehicle price first. Dealers may structure deals to match your monthly target while increasing overall cost.
- Be confident, know your limits, and be prepared to walk away if the deal isn’t right.
What other tips for buying a new car do you recommend? Share your advice and experiences in the comments!