Frequently Asked Questions

The first question to ask is, “Am I in a position to create an additional monthly expense?” Buying a car is a nice luxury, but many GenZ’ers are not in a financial position to wire $35,000 to a dealership’s bank account.

When in the market for a vehicle, figure out an affordable monthly car payment, not one created to leave you broke. Financial advisors recommend spending anywhere between 10-20% of take-home pay on car payments, including car insurance, each month. More realistic percentages fall between 15-18 %. You decide what’s best for your budget.

Whether in the market to purchase a new or used vehicle, if not paying with cash, assessing credit is the first step in getting the ball rolling. When granting loans to customers, banks examine multiple factors including credit score, income, debt-to-income ratio, payment histories, and length of time at residence and employer. Banks want to determine the loan applicant’s stability and ability to repay the car loan.

Even if customers meet those requirements, it does not guarantee they will be extended a loan. For example, if a buyer wants to purchase a $50,000 car and earns $2,000 a month, with no sizeable down payment or equity in a trade-in vehicle, the banks will likely deny the car loan due to the modest income.

It is the only way to determine if a customer qualifies to purchase a vehicle. It is never ideal to walk into a dealership not knowing your credit score. Most banking and credit union apps offer credit scores as a customer convenience, and they can also be pulled from Equifax, Experian, and TransUnion – the most reliable sources. Walking into a dealership blindly can put customers at a disadvantage considering a credit score is perhaps the most crucial component of the car buying process.

While poor credit customers can get approved for car loans, it generally results in higher bank fees and interest rates, which can balloon the vehicle’s overall cost. When not getting approved, a customer’s credit score can potentially drop due to submission to multiple banks, which can further decrease the chance of getting a car loan approval. Although each dealer has its own banks it collaborates with, dealership hopping and crossing fingers for a better outcome is insanity. Don’t jump into a bad situation just because you did not take the time to research options.

Interest rates are based on a person’s credit score and credit history. A person with no credit, minimal, or poor credit will pay a higher interest rate than a person with well established good-to-excellent credit. Each individual is different and banks view each situation differently, so never assume you qualify for the best rates you see friends or relatives receive. Higher interest rates do translate to higher monthly payments. While a cosigner, such as a family member or friend with good credit, can remedy that situation, it means asking for assistance. Another route to consider would be contacting your bank or credit union and applying for a car loan, which can then be used at the dealership. They just might offer competitive rates. At the very least it offers the opportunity to compare rates between the dealership and your bank or credit union.

One of the best ways to assess the shape of a vehicle is to evaluate it in person by visiting the dealership. You can visit alone or ask a mechanic or friend to tag along who can assist in inspecting a list of items which need to be checked on the vehicle.

If it is a pre-owned vehicle, dealerships might even give you permission to take it to your personal mechanic for a look over. Tires, engine, doors, windows (including sunroof, trunk, key fob and remote start – if applicable) and the entertainment center – including navigation, Bluetooth, and speakers – should be examined to make sure they’re operational or not defective.

The next step is to take the vehicle for a substantial test drive at low rates of speed along the street and high rates of speed on the highway while listening for noises such as rattles and shakes during the drive. If there is a problem(s), either cross the vehicle off the list or use the issues as a means of negotiation.

The customer can ask the dealer to fix the issue prior to purchase or decrease the selling price to compensate for the cost of repairs he or she might pay for out-of-pocket in the future.

A Carfax is a document listing the vehicle’s history. It is particularly useful when purchasing a pre-owned vehicle. A salesperson or sales manager can print a copy or visit where the vehicle is posted on the website and, if the Carfax icon is present, click it. Make certain to compare the VIN number on the Carfax with the one displayed on the vehicle you want to purchase. The VIN numbers should match.

The Carfax will reveal a host of information about the vehicle – including year, owners, whether it was purchased by an individual, business, rental company, or leased. If the vehicle was involved in an accident, and repaired by a reputable body shop, a diagram on the Carfax will pinpoint where the damage occurred. The severity of the accident – ranging from minor to moderate to major – will also be listed. This is also a recommended course of action for a “new” demo vehicle driven by a dealership manager. The vehicle is listed as new because it has not yet been titled through the state. Demo vehicles can have upward of 3,000 miles, so make sure the vehicle has not been involved in accidents.

Even a new vehicle can be damaged rolling off a transport truck or get hit or vandalized sitting on a car lot, but it doesn’t hurt to ask if the new vehicle you are about to purchase has ever been damaged. The dealership is obligated to divulge that information to customers.

The way to get a good deal and avoid overpaying for a car is to do a Google search and type in “Best Price for 2025 (Camry), e.g.” Various website sources with pricing, including invoice, will appear. 

Invoice price is what it costs the dealership to purchase a particular vehicle. Be aware that tax, title, license, dealer fees, and any addendum charges will increase the vehicle’s out-the-door price. Dealers can increase a vehicle’s selling price however they deem appropriate. A good rule of thumb is to complete pricing research and contact three dealerships and compare. All three should have similar pricing. As stated above, however, pricing can vary significantly if one store charges more for its selling price or addendum. It’s not as common to purchase a vehicle for invoice in today’s car market. Many low-end vehicles among brand manufacturers, though, aren’t priced far from it. Higher-end models tend to have more markup, which means they often are discounted more. Too much research often leads car shoppers to make the wrong decision, so concentrate on securing a “fair” deal, not applying negotiating tactics steeped in emotion, non-factual data, or uncompromising behavior.

For the most part, no, but it depends on the dealership. Most dealerships are not going to let a customer walk out over not paying add-ons, which can range in the hundreds to thousands depending on the dealership. Some add-ons might include window tint, stripes, door edge guards, all-weather mats, and wheel locks. If a dealer has reduced a vehicle’s price significantly to the point of losing money, it is highly unlikely they will throw in the add-ons for free. If you run into this issue, try splitting the full cost of the addendum. It might not work, but it never hurts to ask.

It is smart to inquire about Internet pricing before visiting a dealership. Internet pricing on dealership websites is often aggressive because it is meant to lure customers to the dealership, and it will beat the sticker price seen stuck on the front and side windshields of new cars lined up on the lot. Comparing Internet prices online is mandatory when price shopping, but also question if there are additional dealer fees attached to the sale price. There will likely be no more than a few hundred dollars difference between Internet pricing at competing dealers. It is tempting to jump at the lowest price available, but shoppers should also factor in amenities, location, and quality customer service when deciding what dealership to patronize. It doesn’t make sense to save a couple hundred dollars purchasing from a dealership an hour across town that didn’t treat you with the respect you deserve. There is also the option to request your favored dealership price match the dealership with the lowest price. If you’re respectful to the sales staff, they probably won’t hesitate to make a deal!

Some people have sentimental attachment to vehicles, whether they finance, pay cash, or inherit from grandparents or the next-door neighbor. It is recommended to research the value of the trade-in vehicle on websites like Kelley Blue Book. It will provide approximate value based on miles and condition. It is crucial sellers get the maximum amount possible for a trade-in due to the majority of states offering a sales tax savings. A trade-in’s value is deducted from the sales price of the new vehicle, which can net hundreds or thousands of dollars’ worth in savings. A customer, however, wanting to trade a vehicle that is not titled in their name can’t if it has a loan amount worth more than the car’s value. It has to have equity or be paid off (or the seller pays the negative equity difference). In either case, the vehicle’s title has to be in the name of the person trading the vehicle, unless the owner has agreed to relinquish vehicle rights. Contact your local county tax office for more information.

Insurance requirements differ among states. Visit your state’s Department of Insurance website for state-specific information. Full coverage or liability insurance is required. If a driver is in an auto collision, liability coverage allows the driver’s insurance company to pay for the damage he or she caused to another driver’s vehicle. Additionally, full-coverage insurance enables a driver’s vehicle to be repaired or replaced following an accident. Dealership staff can also share their company’s insurance requirements. When the buyer has a VIN number, make, model, year, and mileage on the vehicle they want to buy, insurance can be purchased at the dealership or in advance. This option gives buyers the ability to shop around for competitive prices without rushing into purchasing monthly insurance they believe is too high or might be unaffordable. Don’t be alarmed if insurance representatives request photos of the vehicle prior to providing a proof of insurance card and other insurance coverage documentation. This entire process can be handled at the insurance office, by visiting a website, or over the phone with email access.

Shoppers with discretionary funds should consider a down payment. In addition to decreasing the overall amount financed, every thousand dollars of down payment translates to approximately $20 subtracted from monthly payment. For down payment to matter, it is vital shoppers make “smart” vehicle purchases, which means not overpaying. This step can save shoppers hundreds, if not thousands of dollars, and likely means paying off a vehicle sooner. Lastly, a down payment can possibly land shoppers a lower interest rate. Banks look favorably upon a customer’s willingness to make an initial investment.

Make sure you know your state’s sales tax. Once that is determined, multiply the vehicle’s selling price times the state sales tax. For example, if a $20,000 vehicle is purchased in the state of Texas, which has a 6.2 percent sales tax, the amount would be $21,240. Title and license fees also should be added to that number. Additional hidden fees can also increase the out-the-door price. Some hidden fees include addendums (vehicle accessories added by dealership), bogus reconditioning fees, including other miscellaneous fees which seemingly spring out of nowhere. Reconditioning fees are described by dealers as repairs the vehicle underwent, with the cost passed to customers. It’s a 50/50 chance it might or might not be the truth. As a shopper, you have the right to question, even contest, such a fee. Just do it nicely!

Most car brand manufacturers have a standard 3-year, 36,000 mile (whichever comes first) warranty dedicated to engine issues. A few brands have manufacturer warranty coverage that is even longer. Manufacturer websites list warranty details. Adding warranty coverage – whether purchased through a dealership, third party or bank/credit union – means paying more monthly. Whether a warranty is necessary is up to customers. A consideration to make before deciding on a warranty or extended warranty – coverage in addition to existing manufacturer warranty – is to consider lifestyle needs such as how the vehicle will be used, by whom it will be driven and how often. If it will mostly sit in the garage, an extended warranty might not make sense, but if commuting daily and traveling every weekend, an extended warranty could be a lifesaver.

Leasing can be a suitable alternative to financing a vehicle. For anyone who works from home and rarely drives except for random errands around the neighborhood and an occasional road trip out-of-town, leasing is a great fit. It is also a viable option for car shoppers who want to drive a vehicle short-term without committing to a 6-7 year finance contract. Each car brand manufacturer generally allows customers to lease vehicles 2-4 years. Lease down payments, terms, and conditions vary. As always, shop around for your best deal. As with financing, dealers can often make a better lease deal compared to what’s advertised. It doesn’t hurt to ask, just don’t demand!

Whenever the vehicle you want is available and can be purchased at a reasonable price is the best time. Focus should be fashioning a deal that makes sense to the buyer. That means doing research in advance so when a good deal is presented you will feel comfortable pulling the trigger. Dealerships are always throwing a so-called “Sale-A-Thon,” but it is the customer’s responsibility to decipher what is a real deal. With many manufacturers considering the future, they might be hyper-focused on moving electric vehicle inventory or heavily discounting the surplus units in stock, so be aware a “crazy” deal might be possible on such a vehicle. Bear in mind, the most plentiful vehicles usually come with the deepest discounts.Waiting for end-of-year vehicle markdowns is risky because inventory can sometimes be scarce, limited, or non-existent. There is validity to purchasing toward month’s end. It is customary for dealerships to become more aggressive in moving inventory to meet sales objectives, which increases chances of receiving a discount. Dealers aren’t that motivated to do the same in the beginning of the month, but it doesn’t mean it can’t be done. Any discount is good, even if it is not exactly what was planned. The dealer ultimately makes the call to accept or reject an offer. If rejected, say ‘thanks’ and move on to the next dealership. While many shoppers wait until the weekend to visit dealerships, Saturdays are usually hectic for the sales staff due to the overflow of customers. That sometimes means salespeople being less attentive. Monday-Thursday is just as good as the weekend.

This decision comes down to personal choice. All have pluses and minuses. Gas cars run strictly on gas. Hybrid vehicles are self-contained and operate with a combination of gas and electric components such as regenerative braking – a function that keeps the car’s battery charged. All-electric vehicles rely on electrical charging stations to get juiced. Electric vehicles do require more maintenance due to their involved system comprised of copious moving parts. That might equal more visits to the mechanic. In addition, potential all-electric vehicle owners must consider where they can charge. While some apartment buildings, companies, and businesses offer charging stations, there are many that don’t. Not to mention, when planning lengthy road trips, all-electric vehicle owners need to be aware of exactly where they can easily charge the vehicle along their route.

Nobody can tell another person what to like. Whatever vehicle you purchase should meet certain quality standards. New vehicles often have better interest rates due to there being less risk involved for lending institutions. A low-mileage used car or certified pre-owned vehicle should not be overlooked due to fear of paying a higher interest rate. There are banks that will offer competitive rates on used vehicles that meet certain guidelines. It is more prudent, however, to create a budget and stick to it so you don’t wind up having buyer’s remorse because the payment is too much to handle.

Certain car brands do have a better reputation than others. But why purchase a vehicle you won’t enjoy driving or paying the monthly payment on? Making sure your vehicle is purchased in good condition, scheduling regular maintenance (oil changes, tire rotations, and tune-ups, etc.) and driving responsibly, not “dogging it out,”adds years to any vehicle. Therefore, make sure to factor in fuel efficiency, performance, and overall cost to own when deciding which vehicle to drive home.

Many of these cars go through hiccups when released. Some have major issues while other vehicles have minor malfunctions which can quickly and easily be fixed. It is safe to say the kinks get worked out in the vehicles following the next generation release, but taking into account the severity of the problem is what matters before making a purchase decision.

A list of documents to keep on-hand, just in case, include driver’s license, car insurance, proof of income (last 3 paycheck stubs), proof of residence (mail or bill with full name and current address clearly displayed), car title (if trading a vehicle), and a list of at least 5 references with names, addresses, and contact numbers.

Majority of car dealerships have trained sales staff for 12-Steps to the Sale – a sales system heralded as the proper way to interact with customers upon arrival. Sometimes customers know exactly what brought them to the dealership and want to be taken to it. But there are times shoppers want to explore various vehicle options and price points because they want to be sold on a vehicle. Some shoppers don’t want assistance and would rather set out on their own, but I recommend shoppers utilize the expertise of sales staff to expedite the process. 

The first five steps to the sale, in which customers get involved, include Meet and Greet, Fact Find, Selling Evaluation, Sell from Stock, and Demo and Presentation. When a salesperson approaches, don’t be timid. Break the ice by introducing yourself. When he or she asks questions to get more information to guide you in the right direction, don’t be rude and refuse to answer. This is never an appropriate way to interact with a salesperson. Depending on the dealership, the next step is to take a look at your trade so they can make an offer. They will always provide a demo presentation on a vehicle in stock and offer a test drive. If test driving a new car you like, which is not equipped in the color or trim you desire, ask if the dealership has inbound units arriving soon fitting your criteria. After the test drive, you are not obligated to make a purchase. If the deal makes sense, then purchase because some vehicles won’t last long on the lot. If something doesn’t add up, don’t feel rushed or pressured into a purchase. Graciously turn down the offer. You have the option to return the next day, but keep in mind the vehicle might not be available due to being sold. The good news is there are hundreds of cars out there available for purchase, and there is nothing wrong with exercising patience to find the one you just can’t pass up!

Here’s to your car-buying success!