How to Buy or Lease a New Car

Negotiate when shopping for a new car.
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Whether looking for the car of your dreams or searching for a safe and reliable family vehicle, choosing to buy or lease a new car represents a major financial investment. With a myriad of choices available, making the decision to take the plunge and buy or lease a new car leads to a host of other questions and concerns. Take things one step at a time and explore your options.

Step 1

Take a look at your needs and decide on leasing or purchasing your new car. Evaluate how much you drive and what size car you need. Keep in mind the possibility of adding to your family during the next several years. Consider leasing if you plan on driving fewer miles, typically less than 12,000 miles a year. Purchase a new car if you will place a lot of miles on the car and want to own the automobile at the end of the financing term. Evaluate your budget and decide how much car you can afford.

Step 2

Address any possible problems before heading to the car lot. Review your credit report and take care of any inaccuracies before applying for credit to buy or lease a new car.

Step 3

Conduct thorough research. Read automobile magazines and scour the Internet for information. Look at safety ratings and owner satisfaction surveys. Narrow your choices based on affordability, optional add-ons and reliability.

Step 4

Secure financing. Seek pre-approval from your bank or credit union to get the best interest rate. Shop around for the best deal before applying. Read the fine print for zero percent financing offers through the car dealership. Ensure that you understand any limitations, such as the length of the financing term or adjustments to the interest rate that may occur during the life of loan.

Step 5

Negotiate pricing and options. Arm yourself with competitors’ offers and deals found online. Refrain from negotiating a monthly car payment as a number of factors, including length of loan and interest rate, can influence that amount. Negotiate the car's total purchase price, including discounts and special offers. Negotiate the price before offering to trade in your old car. Consider selling your old car on your own if the price the dealership offers falls below the current Blue Book value.

Step 6

Review the contract. Ask questions and make sure the contract reflects the agreed-upon purchase price, interest rate and monthly payment amount. Verify maintenance requirements, mileage limits and any penalties associated with turning the car in early when leasing a vehicle. Keep a copy of the sales contract in your personal financial files for future reference.

Step 7

Notify your insurance agent. Call your agent and advise him of your new car purchase or lease. Provide him with the car's VIN number, make, model and year. Ask your agent to add the new car to your insurance policy. Consider gap insurance, to cover the difference in the amount financed and the actual value of the car at the time of a total loss, if you're leasing a car.

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