How to Buy or Lease a New Car

We walk through the steps a smart car buyer should take to remove intimidation from the process and end up with the best deal on the right new car. The process of buying or leasing a new vehicle is often a daunting one. Not only is a large purchase stressful, but the car-buying process is ripe with opportunities for consumers to make an error in judgment or be taken advantage of by a pushy salesperson. Not to fear! Car and Driver's Buyer's Guide team is here to arm you with all the information you need to go into this process with confidence—and to come out of it feeling good about the decisions you've made as you're handed the keys to your new car, truck, SUV, or van. You'll be making a lot of decisions throughout this process. One of the first is whether you want to buy or lease. Buy, and you'll keep the car once it's paid off. With a lease, you get to drive a new car and then turn it in at the end of the term. This may sound like a simple choice, but there's a lot to consider here. See all results for used cars for sale near 400072 Leasing might net you a smaller monthly payment, but your lifestyle may be cramped by a lease's mileage limits. Leasing can allow you to get into a nicer vehicle compared to what you'd get with a similar car payment, but remember that you'll have to start this process all over again once the lease ends, with nothing to show for your investment. You'll likely have the option to buy the car at the end of the lease for a price predetermined in the contract; this option is appealing if you like the car and haven't had any major issues with it. Taking out an auto loan to purchase a vehicle means you'll own it outright after you've paid off the financing, but you might get some sticker shock when it comes to fitting the payment into your budget. It also means shopping around for a good interest rate. Pay cash, if you can swing it, and the car is yours from the very start. Now is the time to take a hard look at your finances to determine how much you actually have to play with. If you have a current loan or lease, use that monthly amount as a starting point and adjust based on your situation. Maybe you got a raise and want to roll some of your newfound disposable income into a nice ride. Or perhaps you have a kid who is going off to college, and it's time to tighten the belt. When planning your budget, don't forget the other costs that come with car ownership: taxes, registration, insurance, fuel, maintenance, etc. Estimate those costs and then set aside a portion of the budget for that non-negotiable chunk. Because these costs vary from car to car, you may need to do some research once you have a list of finalists and then revisit your projected budget at that point. See all results for used cars for sale near 400072 While everyone's financial situation is different, a good rule of thumb is to spend no more than 10 percent of your monthly income on your car payment. Factor in another five to 10 percent for those additional costs we mentioned. And whatever method you choose, the value of a trade-in will reduce your total outlay. As is the case with house shopping, if you plan to finance it's a good idea to get pre-approved for a loan. This should happen before even setting foot on a showroom floor. You'll thank yourself later when you're sitting in the dealer, where they'll likely offer you a marked-up loan with worse terms than you can find on your own. Knowing the approximate interest rate and loan term will also give you a good idea of how much spending power you have when budgeting. Paying for a car up front simplifies the process somewhat. Just make sure you have the funds readily available so you can wire the money or get it as a cashier's check from your bank without delay. If you bank exclusively online, be sure to find out how to make that happen and how long it will take to get a check mailed, for instance. Have a car you plan to get rid of? Find out how much it's worth before the dealer gives you a (potentially low-ball) offer. Car and Driver has an easy-to-use car-valuation tool that asks for a few details about your current vehicle and uses historical values to determine what it's worth as a trade-in and in a private-party sale, with prices for cars in clean, average, and rough condition. Be conservative when choosing a value to plug into your budget. You may also want to check with some of the larger used-car companies to get a quote or two. They may offer you more than the dealer you buy your new car from. Before heading down to your local car store, though, there's some prep to do. With hundreds of nameplates on the market and multiple versions of each, it pays to do some research from the comfort of home. Otherwise, you may succumb to decision paralysis once you’re inside the dealership. The two main things to consider at this step are what body style fits your lifestyle best and which features you must and would like to have. Choosing between a

How to Buy or Lease a New Car

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