Buying a car? Follow these 4 tips to hit the gas with confidence

Last year brought unprecedented changes across nearly every industry, and automotive was no exception. In fact, the auto market continues to exceed expectations. Compared to March 2020, TrueCar estimates vehicle sales were up 42% in March 2021. So, if you’re in the market to buy a car, you’re in great company.

Navigating a new and ever-evolving automotive landscape can be tricky, but these four tips will help you be successful with your car-buying journey in 2021 and beyond.

Set a realistic budget

Before you start the process of financing and looking around for a car, you should understand your budget. That includes taking into account not just the sticker price of the car, but the total cost of owning a vehicle.

“Make sure you can afford the monthly loan payment, in addition to other costs that come along with car ownership, personal property taxes, registration fees, insurance, fuel costs and maintenance,” said Joe Pendergast, vice president of consumer lending at Navy Federal Credit Union.

Car affordability calculators can also help you figure out how much money you can reasonably allocate toward a vehicle each month. It may even be a good idea to open a separate savings account for your car. By automatically transferring money into this account on a consistent basis, you’ll be prepared to cover any unexpected future costs, too.

Once you have a solid understanding of budget factors, review your credit history. Knowing where you stand with credit and maintaining a good score can translate to big savings down the road.

Get preapproved for an auto loan

A preapproval is one of the best ways to show a car dealer that you’ve done your homework. Lenders may even give you a check worth up to the preapproved amount, so you can shop like a cash buyer when you visit the dealer lot.

“Given the high demand and steady uptick in vehicle prices, a preapproval is especially a good move,” said Pendergast. “It provides you more negotiating power and control over your spending.”

Ultimately, a preapproval can make the overall process simpler and easier.

Research to find the best deal

“A car is a big investment, so arming yourself with the knowledge to make the right purchase for you or your family is key,” Pendergast added. “Don’t head to the dealership or shop online without doing your homework first. A variety of tools are available to help you research vehicles and compare prices.”

If you’re planning to purchase a used car, always have it inspected by a certified mechanic prior to purchase and get a vehicle history report. That way, you’ll be aware of any red flags and avoid a money pit from constant repairs.

Negotiate for the deal you want

Preparation is key and you shouldn’t rush the process. Know the market value of the vehicle you’re buying so you can get the best deal. It’s also a good idea to shop around at a few different dealerships and compare offers. Additionally, never share your preapproval amount with the dealer.

“Stay in control of the conversation and don’t let the dealership try to upsell or talk you into buying a more expensive vehicle with add-ons that may not fit your budget,” said Pendergast.

Once it’s time to close the deal, make certain you understand all the terms and conditions prior to signing any paperwork.

Keep these tips in mind, and you’ll be ready to navigate your next car purchase with ease.

Navy Federal Credit Union is federally insured by NCUA. Visit navyfederal.org to learn more today.