In today’s economy, buying a car the car buying process may seem more stressful than ever because of the expense. According to Experian data from the fourth quarter of 2024, the average new car buyer pays around $747 in car payments per month, while the average used car buyer spends an average of $525 on their monthly car payment. When it comes to making such a big purchase, is there a way to make the entire process easier? Potential car buyers can take steps today to make their visit to the dealership smoother, allowing you to leave with a lot more confidence. Here are four ways you can make auto buying easier.
Setting Your Budget
The first thing every car shopper should do is set their budget. This involves two steps: Understanding how much you can spend and knowing your credit score.
As part of your comprehensive budget, experts recommend spending no more than 15% of your total income on your transportation budget. This should include your car payment, insurance payments, and fuel costs. For example: If you take home $4,000 per month, spending up to $600 on your total auto costs is a good target for your budget.
Your credit score will help you get to your ideal budget. Before you step foot in a dealership, be sure to know what your credit score is at all three credit bureaus. A higher credit score means lower monthly payments and less money spent on interest over the life of your purchase.
It’s important to remember that there are multiple scoring models out there, and the one used in determining your loan may not be the one you referenced for educational purposes. Each one is a tool to give you an idea of where your credit score is, and what you need to do to improve it.
Getting pre-approved for an auto loan considers your credit score and income so you can understand what you qualify for, allowing you to make shopping plans. This important step can help you further focus on your budget and give you the advantage when it’s time to negotiate a deal.
In addition to your budget and credit profile, putting money down or trading in an older vehicle can help you save even more money. With all this information, you can help decide how to best approach car shopping. If you’re not sure how it all comes together, use SESLOC’s vehicle payment calculator to help determine your monthly payment and payoff schedule based on the vehicle purchase price, trade in information, and potential loan information.
Picking the Right Vehicle
After you have set your budget, it’s time to pick the right vehicle for your lifestyle. Although it may be tempting to get a sports car or a large SUV, is either one really the right fit for your lifestyle? Some of the practical questions you should ask while narrowing down your options include:
- How long is my commute?
- How much do I want to spend on fuel each week?
- How much can I budget for regular maintenance, such as oil changes and tire replacement?
- Will I need to transport my kids or pets and their activities?
- How often will I be moving large or bulky cargo?
If you overbuy your car, it can present challenges over the long run you may not have anticipated, including increased costs and lost functionality. Getting a vehicle that fits your needs now and over the next several years will help you save money over the long term. To see what might fit best for you, start by reading professional reviews and narrowing down choices from there.
Making Progress at the Dealership
Now that you know your budget and what you are looking for, it’s time to visit the dealership. Using tools like SESLOC AutoSMART, you can easily find which dealerships have the vehicles you are looking for at a price within your budget.
If you’re still debating between two or more cars, it could be smart to visit the dealership during the weekday. Weekends can be very busy, and you may not get the one-on-one attention you need to make a decision. If a weekday is inconvenient, you may be able to make an appointment to visit a dealership to ensure you get the attention you need.
When at the dealership, be sure to test drive all the vehicles you may be interested in. Test drives help you get a feel for the cars and narrow down what you love and hate about each of the vehicles you are considering.
Finally, it’s important to do your research on what discounts or promotions are available on the cars you are looking at, and what you can and can’t negotiate. Taking initiative on what you may qualify for – especially during holiday weekend sales – and where you can negotiate warranties and other pricing considerations can help you get the best deal.
Understanding Financing & Costs
There are three major factors that go into the final monthly price you pay on your car: The loan amount, the interest rate, and the loan term. You can find out all three in advance by getting pre-approved for your car loan.
When you get pre-approved in a SESLOC branch or online, you will go over your income and get your credit checked. Based on that information, you can get a maximum loan amount, interest rate, and your payment amount in mind, giving you insight into what you can afford. Moreover, getting pre-approved lets the dealer know you are a serious buyer, allowing you more negotiating power when it’s time to buy a car.
Going through the car buying process doesn’t have to be incredibly difficult. By getting ahead of the game and preparing to buy the right car for your needs, you can make the process easy, allowing you to buy the best car for your needs without the stress.