Do your research! If you go into a car dealership without doing your homework, you will walk out of it with title to an overpriced car, hefty payments over a long term, and sticker shock on the insurance and gas mileage.
Know your price range and stick to it. Don’t let the salesman talk you into a little more because the sunroof is so nice or the seats heat up. Your own rear end will heat up the seat; it just takes a little longer. Don’t let him talk you into buying a more expensive car by extending the payments out another year or paying “just $25 extra a month.”
Pay cash if you can. Most of us are stuck with payments for a little while, but try to get a car well below your car payment budget and save the difference. Drive that car into the ground and you will have money saved to pay cash for the next one. The important part is to save the difference, or you will be driving old cars forever.
Research the repair history and safety record of makes and models in your price range, and look for a car with a good record. Don’t be discouraged if all the cars with near-perfect records are out of your price range. Just look at the ones you can afford and determine the top five or six models. This will make a big difference to your insurance.
When you find a car you like, find out its individual history before you sign on the line, or you may end up owing $3000 on a car that will not resell because of hidden damage.
Take someone with you who is not emotionally invested in the decision. This should be someone who is calm, wise, and can say no and tell you the truth to your face—someone who can say, look, this car is beautiful but overpriced. Let’s go down the street and look at this other car on your list. Take your time shopping for the right car and the right deal will come along.