Your Checklist for Buying a New Car

Get Car Financing
Even with poor credit.

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - November 20, 2018

Buying a new car is a big commitment. A lot of careful research and planning should go into your decision before you jump into buying, especially if you have bad credit. In fact, if your credit is suffering, a new vehicle isn't necessarily beyond reach, but it may take a bit more work to make the dream a reality.

Before You Head to a Dealership

It's essential to do your homework prior to buying a new car. Before you even think about a vehicle, you should check off some very important boxes about your credit and how you plan to finance it:

  • Check Your Credit Reports – Your credit reports contain all the financial and credit information that go into making up your credit score. From how many lines of credit you have, to if you pay your bills on time, your credit reports tell the story. You can get a copy of your credit reports for free every 12 months from each of the three national credit bureaus by visiting www.annualcreditreport.com. Make sure all the information is accurate. If it's not, having the incorrect information fixed by the reporting bureau through a dispute can go a long way toward improving your credit.
  • Get Your Credit Score – You can typically access your credit score for free in a number of locations online, while some credit card companies include it on statements or allow you to view it online. Knowing your credit score is essential to researching interest rates and loan programs, and this also lets you know which type of lender is best suited to finance the new car you need.
  • Research Vehicles – Knowing what you need is important when it comes to shopping for a new car. Make a separate list of wants and needs. This way, when you're looking at vehicles, you can see those cars that best balance your wants and needs. Keep in mind things like where, when, and why you do most of your driving – getting a sporty coupe won't do you much good if you need room for a growing family. Don’t forget to check out the latest car deals and manufacturer’s offers as well as customer reviews to see what other people love and hate about the vehicles you're looking at.
  • Save for a Down Payment – You might not need a down payment if you have decent credit, but it certainly doesn't hurt. A down payment saves you money by reducing the amount you borrow, which lowers the amount of interest you pay over the term of your loan. If you suffer with poor credit, a down payment is always a requirement. Typically, lenders that work with bad credit require $1,000 down or 10 percent of the selling price, whichever is less.
  • Try for Pre-approval – Getting a direct loan from a bank or credit union can be a good way to get a good deal on a vehicle, especially if you're a member in good standing. Banks and credit unions typically have lower interest rates than lenders that work through special finance dealerships. This is also a good way to negotiate your best rate, because once you get to the dealer, they have the chance to see if one of their lenders can beat the rate you were given.

New Car Buying Checklist at the Dealership

Once you get to the dealership, there are certain things you need to do before you sign the paperwork:

  • Ask for an Equipment Demo – If you've found a vehicle that fits your budget and is a good fit for you, ask the salesperson to show you the features and how they work before getting behind the wheel. This can make your test drive more effective, because, for instance, you won’t to have to ask why there's a flashing red light in the side mirror if the dealer has already shown you that the car has blind-spot monitoring.
  • Take a Test Drive – Once you find a vehicle on the lot that you're interested in, it's time to take a test drive. Make sure you pay attention to how the car drives, sounds, and performs when you’re out on the road. Take in on the expressway, through the city, and, if possible, on some rougher roads to see how it handles. Your test drive should ideally last about 30 minutes. Turn the radio off, test all the features and buttons, and pay attention to how well the vehicle fits you. Is there enough head room and leg room? Are the seats comfortable? How are the sight lines all around? Think about how much time you're on the road, and don't settle for something you aren't going to be happy with after the new car smell wears off.
  • Meet with the Salesperson – Now that your test drive is done it's time to get down to the real business of buying the car. For this, you sit down with a salesperson or the sales manager to negotiate the final price of your new vehicle. If you got pre-approved for financing, you can present this to the salesperson to see if they can offer you a better rate.
  • Meet with the F&I Manager – If you were unable to get pre-approved for financing, this is where you apply for a loan. Depending on your credit situation, you may or may not be asked to provide a down payment, and possibly a cosigner. At this point, the F&I manager pitches you additional dealer-added features and services, which you can agree to or not.

If your credit isn't good, you need to provide additional supporting documents to prove to the lender that you have the ability, stability, and willingness to take on and complete a car loan.

Though the specifics vary by lender, you typically need to provide:

  • Proof of income
  • Proof of residence
  • Proof of a working telephone
  • A valid driver's license
  • A list of personal references

Regardless of your credit, all new car buyers should also remember to bring in the title, registration, and proof of insurance for any trade-in vehicle they have.

Need Help Getting Started?

Having a checklist to follow for new car buying is one thing, knowing where to go to get the process started is another. If you don't know where to turn, start here, at CarsDirect. Our new and used inventory pages can be a great tool for researching vehicles, and, when you're ready to head to a dealership, our service can match you with a local dealer that has the lenders ready to get you on the road, even if you're struggling with credit issues. Get your new car buying journey started today – simply fill out our free, no-obligation auto loan request form, and we'll get you on the path to a dealership near you!

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


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