Don’t Buy a Car Without This Cheat Sheet

Congratulations — you’re about to snag a new ride! We’re assuming that you’ve already done some research: You know how much you can afford to spend, which car you want to buy and the true market value (what other people are paying) for that car in your area.

And now you’re ready to buy. Follow these steps to get a good deal and make the car-buying process at the dealership as painless as possible. To help make it easier, download our cheat sheet and take it with you.

Before you go to the dealership

Arrange financing ahead of time to make the negotiation easier and help you get the best deal.

• Check your credit score. If you need to build your credit, consider waiting until your score will let you get acceptable financing terms.
• If it looks good, apply to get preapproved or pre-qualified for an auto loan.
• Select the best interest rate and the shortest loan term you can handle.
• Consider calling the dealership to confirm the car is still for sale.
• If you call, prescreen the salesperson: Does he or she listen and seem knowledgeable?
• Decide if you’ll want extras like an extended warranty, paint protection or additional anti-theft devices. Remember, these are high-profit items for the dealer and you can always buy them later.

Bring these items

Think ahead and be prepared with the right documents and information. Take with you:

• True market pricing from Edmunds.com, Kelley Blue Book or NADA, the National Automobile Dealers Association.
• Information about incentives, rebates or special financing deals.
• Proof of insurance and a check for your down payment (aim for 20% for a new car, 10% for a used car).
• If you’re trading in: the car’s title or loan documents and extra keys.
• A snack and water in case the deal takes a long time.

Arriving at the dealership

A salesperson will greet you and urge you to take a test drive. Afterward, be ready for increased pressure to begin negotiations.

• Evaluate the car, but also the salesperson.
• Is the salesperson: Listening to your needs? Knowledgeable? Relaxed, yet efficient?
• If asked, don’t consent to a credit check before the test drive. Say you’re already preapproved for a loan.
• Avoid naming the monthly payment you want. Just say, “I’m a cash buyer.”

On the test drive

The test drive will provide the sensory information you need to decide if this is the right car for you. Don’t rush this step, and don’t let the salesperson distract you with a chatty sales pitch.

• Tell the salesperson you need to test drive for at least 15 minutes.
• Drive a route that includes tight corners, hills, rough pavement and highway.
• Turn off the radio and pay attention to acceleration, braking, visibility and seat comfort.
• Check the cargo area and backseat legroom.
• If you don’t like your salesperson, ask to see a sales manager or just leave.
• If you’re still undecided about the car, don’t be pressured into buying it.

Negotiating the price

If you like the car and are comfortable with your salesperson, it’s time to make a deal in the sales office. Try to remain unemotional and be ready to leave if you feel pressured or the pricing doesn’t line up with your research.

• Ask the salesperson to name a price instead of responding to the common: “Make me an offer!”
• Compare the dealership’s price to your numbers from Edmunds, Kelley Blue Book or NADA.
• Make a counteroffer of $1,000 below the true market price.
• You can say: “My research shows the market price is…” Or, “I’ve gotten offers from other dealerships that are lower.”
• If necessary, increase your offer by $250 increments until you reach the true market price.
• If the salesperson says, “I’ll take this to my boss,” tell them your time is limited.
• If there’s too much back-and-forth, ask to speak directly to the sales manager.

Closing the deal

Before you say “yes,” there are a few questions you should ask to make sure you know what you’re agreeing to.

• Ask for an “out the door” price and a breakdown of fees.
• Question the fees (except for the sales tax, documentation fee and registration costs).
• Ask the dealer to remove any unwanted dealer-installed options such as alarms.
• Use your cell phone to take a picture of the deal sheet to use in the next step.

In the finance office

You’re not done yet! You’ll now be handed off to the finance and insurance manager, who will pitch warranties and extras. Verify that the terms you reached with the salesperson are in your contract.

• Say no to extras you probably don’t want such as fabric and paint protection.
• Deflect the extended warranty pitch by saying, “I’ll probably trade in my car before it’s out of the included factory warranty.”
• If the finance manager offers to beat your preapproved loan rate, fill out a credit application.
• To easily compare loan offers, keep the down payment and loan length the same.
• Make sure the numbers in the sales contract match the agreed-upon price.
• Review the prices in all the boxes and question anything unexpected.
• If anything is missing from the car or it needs repairs, get it in writing.
• If everything looks good, sign and get your keys!

Woohoo — you did it!

More from NerdWallet

• Why to get preapproved for a car loan 
• How to negotiate to buy a car
• How to trade in a car when you owe money on it

Philip Reed is a writer at NerdWallet. Email: preed@nerdwallet.com.