Collins Community Credit Union

Everything You Need To Know Before Buying A New Vehicle

You might pick up an iced coffee or birthday present for a co-worker without much thought, but buying a vehicle requires extensive research, a thorough review of your finances and budget, and a test drive or two. Between the vast selection of different makes and models and pushy salespeople trying to meet their sales goals, purchasing a car can be intimidating. Before you head to the dealership, be sure you are financially prepared to drive away with a brand-new ride.

Published on Jul 30, 2019


Whether your current car has been to the repair shop one too many times this year or you just want a fancier set of wheels to coast around town in, it is important to know the down payment you could make and the monthly payment you can afford. Buying a car that costs more than what you can afford can cause financial strain and could even lead to repossession, so be sure your monthly payment is exactly what you can afford and not a penny more.

Check to see if you qualify for an auto loan with rates and terms that fit your budget, then peek at your credit score so you can negotiate the best possible interest rate for any auto loans you apply for. The higher your credit score, the better your negotiating power.

To ensure you can afford the vehicle, you may want to consider making a larger down payment or extending the term on an auto loan to lower your monthly payment rate. Keep in mind, though, that increasing the length of the loan term will mean you will pay more in interest over time.


Thinking about a new car? Though new cars depreciate as soon as you pull away from the lot, you will experience lower maintenance bills and repair costs than you would with a used car. Plus, unlike a used car, you will be eligible for an extended warranty that may cover any issues the vehicle may incur. Conversely, a used car rarely comes with a warranty, unless you purchase one, but used car drivers will experience a lower purchase price and the potential for lower insurance premiums, license and registration fees.

Whether you are purchasing a new or used vehicle, be sure to check pricing on similar makes and models at different dealerships, as you may be able to save hundreds or even thousands just from comparison shopping.


Before finalizing the sale, you will want to do a little investigating to make sure your purchase is sound. If you are buying a new car, be sure to browse consumer reviews and check for issues like frequent recalls on various parts. If you are planning to purchase a used car, complete a CARFAX report, which provides information about the history of the car, and check the title through the DMV, which can be completed online. Additionally, request a vehicle inspection, which typically costs around $100 to $150, to prevent the discovery of mechanical issues down the road.
After you have done your research, ask to take the car you’ve selected for a test drive. Observe the car in detail: ensure you have plenty of room and that the seats are comfortable or adjustable, check the visibility from every mirror, and be sure you have an in-depth understanding of the gauges and controls. You should also listen for any rattles or squeaks that may indicate an issue with the vehicle.

Once you’ve reviewed your finances, received loan approval, and checked your selected vehicle for safety, comfort, and its maintenance history, it’s time to make your purchase! Be sure you’ve set aside enough dollars for items like a new tag, title, and a potential increase with your insurance company. Then, it’s time to cruise off into the sunset with the music up and the windows down, fueled by the fact that you know you did the work to make the best decision.

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