Learn How to Buy a New Car

Purchasing a new car is similar to a game show. Choose the correct door, and you’ll get your prize: a great price on a nice car. If you choose the wrong door, you will lose money and dislike the shopping experience.


The internet’s transparency has made it easier than ever to navigate the car-buying process. So let’s get this party started. (If a new automobile isn’t what you’re looking for, read our article on how to buy a used car.)

Make a budget.

Begin by determining if you want to pay cash, get a loan, or lease your new car. Paying in cash simplifies budgeting, but don’t blow all of your savings. Remember to factor in sales tax, registration, and insurance costs. To determine the appropriate monthly payment and down payment, use the NerdWallet auto loan calculator.

The majority of consumers obtain a car loan or, increasingly, lease a vehicle. Getting preapproved for a car loan makes the purchase process easier and puts you in a better position at the dealership. You’ll see how having a preapproved loan comes into the process later on.

Select the appropriate vehicle

Now comes the fun part: choosing the ideal car for you. Consider how you intend to use this vehicle. If you have a family, for example, you’ll need enough space for everyone as well as plenty of cargo capacity. If safety is a primary consideration, look into crash tests at the Insurance Institute for Highway Safety.


Make a list of must-have characteristics to help you narrow down your options. Then, using the automobile finder function available on various automotive websites, look for models. Filter your results based on your budget and desired characteristics. As you proceed, make a list of three target models to investigate further.

Examine dependability and ownership expenses.

You should choose models that are not only dependable but also have a reasonable cost of ownership. Consumer Records and J.D. Power collect owner maintenance reports and assess all vehicles for dependability.

The total cost of ownership is a closely linked issue. Some cars are inexpensive to purchase but will cost a lot more in the long term due to insurance, upkeep, repairs, and depreciation. These costs are estimated on several automotive websites, including Kelley Blue Book’s Five-Year Cost to Own and Consumer Reports’ Cost of Vehicle Ownership. When purchasing a car, it may be advisable to spend a little more money up front.