How to Buy a Car in 2024: A comprehensive guide with insider tips.

“Can I afford to buy a car?”

“Is it better to buy a new or used car?”

Lots of people are asking these questions now that new car dealers have inventory again and used car prices no longer include pandemic-era premiums.

Whether you’re eyeing a new or used vehicle, purchasing a car in today’s market should include several steps and decisions to make a smart buy. This comprehensive guide will show you how to buy a car in 2024, help you navigate the process, factor in actual cost considerations, and offer some pros and cons for popular car-buying platforms. As a bonus, we’ve added some insider tips to ensure you get the best deal.

Buying a New Car

1. Research Models and Prices: Look up the latest models that fit your needs. Use resources like manufacturer websites, automotive magazines, and review sites.
2. Check for Incentives: Manufacturers and dealerships often offer incentives, such as cash rebates, low-interest financing, or lease deals.
3. Test Drive Multiple Cars: Get behind the wheel of different models to see which one feels right for you. Keep your options open – being flexible can pay off. If you only want one model, with certain features or a particular paint job, you’re probably going to pay significantly more to get exactly what you want.
4. Negotiate the Price: Even new cars have room for negotiation. Research the invoice price and aim to pay close to it.
5. Ask About Manufacturer-to-Dealer Incentives: Ask about any manufacturer-to-dealer incentives that might not be advertised to the public. These incentives can provide additional leverage for negotiation.
6. Test Drive and Inspect: Even with a new car, ensure you test drive and inspect it for any minor defects or issues. Sometimes cars can get minor damages during transportation.
7. Be Willing to Walk Away: The more you want a car the less likely you’ll get a deal on one. Be patient, and willing to walk away. Dealers will do everything they can to get you to buy a car while you are there. Once you demonstrate your willingness to walk away, they’ll likely become more interested in keeping you there by offering you a better deal.
8. Time Your Purchase: Dealers often receive new inventory at the end of the month, quarter, or year. Visiting the dealership during these times can lead to better deals as they aim to clear old inventory.

When is the Best Time to Buy a Car?

Is there really a “best” time to buy a car? If it’s a new car, the answer is “Yes!” First, salespeople are often eager to meet sales quotas or compete for incentives and may offer better deals at the end of the month, fiscal quarter, or year-end, when sales figures are tallied. Next, at the end of a model year, dealers and manufacturers are eager to clear lots to make way for their new models by offering incentives on current models through reduced prices and more competitive financing. Once those new models arrive on the showroom floor, substantial discounts can be available on last year’s model. Finally, holiday sales aim to draw in customers who might otherwise be focused on other activities, leaving less traffic on lots. Memorial Day, Labor Day, and Black Friday often offer good days for a deal.

The Advantages of Buying New

In addition to reveling in that “new car smell,” there are advantages for buying a new car:

• Warranty Coverage: New cars come with comprehensive warranties.
• Latest Technology: New vehicles feature the latest safety and entertainment technology.
• Customization: You can choose your preferred color, features, and options. You can also ask dealers to remove options they’ve added to a car to lower the cost.

Buying a Used Car

Buying a used car can save you a lot of money, and since today’s cars last longer than they used to, they can also be an excellent value. Do the following to make sure you’re getting a good one:

Research Used Cars and Prices

1. Use Online Tools: Websites like Kelley Blue Book, Edmunds, and TrueCar provide fair market values.
2. Compare Listings: Check prices on multiple platforms such as Autotrader, Cars.com, and local dealership websites.
3. Research Models and Manufacturers, then Read Reviews: Understand common issues and reliability ratings from consumer reviews and expert opinions.
4. Forums and Social Media: Join car enthusiast forums and social media groups. These communities can provide valuable insights and tips from experienced buyers. YouTube and Reddit are useful sources for learning about which cars are good values (and which ones aren’t). Ask your friends and family about their experiences with their cars.
5. Test Drive Multiple Cars: Even if you’re set on a particular model, test driving similar models can give you a better perspective and might even sway your decision. You may even want to consider renting a car for a day to see if it’s really the one you want.
6. Set a Budget: Determine how much you can afford and stick to it.
7. Research Vehicle History: Use services like Carfax to check the history of the car.
8. Get a Pre-Purchase Inspection: Have a trusted mechanic inspect the car before buying.
9. Negotiate the Price: There’s usually more room to negotiate on used cars than new ones, whether you’re buying from a dealer or a private party.
10. Look for Certified Pre-Owned (CPO) Programs: CPO vehicles often come with extended warranties and have undergone rigorous inspections. They can be a good middle ground between new and used cars.
11. Consider Previous Rental Cars: Rental agencies like Enterprise and Hertz often maintain their cars well. Buying a former rental can be a cost-effective option if you’re okay with higher mileage.
12. Private Sellers: While riskier, buying from private sellers can yield great deals. Always get a vehicle history report and have the car inspected by a mechanic.

Advantages of Buying Used

• Lower Cost: Used cars are generally more affordable.
• Less Depreciation: New cars lose value quickly, while used cars depreciate at a slower rate.
• Insurance Savings: Insurance premiums are often lower for used cars.

Determining How Much You Can Afford

To determine your budget:

1. Calculate Your Monthly Income and Expenses: Ensure you have a clear picture of your financial situation.
2. Consider the 20/4/10 Rule: Make a 20% down payment, finance the car for no more than 4 years, and keep your total vehicle expenses (including insurance and maintenance) below 10% of your monthly income.
3. Use Online Calculators: Many websites offer affordability calculators to help you understand what you can realistically spend.
4. Compare Rates: Your financial institution may be able to offer you a much better rate on used cars than a dealer. Lafayette Federal offers competitive loan rates on used cars, as well as loans for purchasing and restoring classic cars.

1. Pre-Approved Financing: Get pre-approved for a loan from your bank or credit union before visiting dealerships. This can give you leverage in negotiations and prevent dealerships from offering higher interest rates.
2. Trade-In Tactics: If you have a car to trade in, don’t reveal this until you’ve settled on the purchase price of your new car. Separating the negotiations can get you better deals on both fronts.
3. Out-the-Door Price: Negotiate based on the “out-the-door” price, which includes all taxes, fees, and add-ons. This prevents hidden costs from creeping in after you’ve agreed on a price.

Initial Costs for Buying a Car

Initial costs can include:

• Down Payment: Typically, 10-20% of the car’s purchase price (most lease programs also require substantial down payments, while traditional financing may not require it at all).
• Taxes and Fees: Sales tax, registration fees, and title fees.
• Insurance: The first month’s premium is usually due at the time of purchase.
• Inspection and Emission Fees: Required in some states before registration.

Hidden Costs Most People Don’t Think About

1. Maintenance and Repairs: Regular upkeep and unexpected repairs can add up.
2. Fuel Costs: Consider the car’s fuel efficiency.
3. Extended Warranties: Optional but can be costly.
4. Financing Charges: Interest on a car loan can significantly increase the total cost.
5. Depreciation: The car’s loss in value over time, especially in the first few years.
6. Gap Insurance: If you’re financing a significant portion of your car’s purchase price, consider gap insurance. It covers the difference between what you owe on your car and its value in case of a total loss.
7. Extended Warranties and Add-Ons: Dealers often push these as high-margin items. Evaluate whether you truly need them and if they’re competitively priced.
8. Depreciation Awareness: Understand that some cars depreciate faster than others. Research depreciation rates for the models you’re considering.

There are plenty of options for buying a car that don’t involve haggling with a dealer or negotiating with high-pressure salespeople. For many people that makes for a better experience, but there are still things you should do first before buying a car this way:

• Check Return Policies: Platforms like TrueCar and Carmax offer money-back guarantees or return policies. Make sure you understand the terms and take advantage of this period to ensure the car is right for you.
• Online Reviews: Read multiple reviews about the car-buying platforms to gain insight into common issues and customer satisfaction levels.
• Price Comparison: Use multiple platforms to compare prices for similar models. This can help you spot deals and avoid overpaying.

Rental Car Fleet Sales (e.g. Enterprise, Hertz)

• Pros:
  • Well-maintained vehicles.
  • Competitive pricing.
  • No-haggle buying experience.
• Cons:
  • Limited inventory.
  • Higher mileage vehicles.
  • Fewer customization options.

TrueCar

• Pros:
  • Provides detailed information about the average prices paid for similar vehicles in your area.
  • Platform is user-friendly and offers a straightforward process for searching and comparing different car models.
  • Partners with a large network of certified dealers, which can provide a wider selection of vehicles and potentially better deals.
• Cons:
  • Not all dealerships participate in the TrueCar network, which means you might miss out on some deals or options.
  • Prices displayed are based on average sales data and can sometimes differ from the actual price you might be able to negotiate.

Carmax

• Pros:
  • Extensive inventory.
  • Thoroughly inspected vehicles.
  • No-haggle pricing.
• Cons:
  • Prices can be higher than private sales.
  • Limited room for negotiation.
  • Additional fees for extended warranties.

Buying a car in 2024 requires careful planning, research, and consideration of several factors. By understanding your budget, researching vehicle prices, and choosing the right time and platform to buy, you can make a well-informed decision and drive away with confidence. Use these insider tips to enhance your car-buying experience, ensuring you get the best deal and the right car for your needs. Happy car hunting!