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How to Purchase a Car

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Written by Stephen Thiele   

Regardless if the car is used or new, a car is a major purchase. Taking your time and doing your research when you are purchasing a car can save you from being talked into paying too much by a salesman. Whether you are buying from a private seller or dealership, the seller is out to get the most amount of money, so you need to be prepared when you start shopping around. Calculate how much money you have to spend. If you are buying from a private seller, plan on having to pay in cash. While dealerships provide financing, you may have to make a down payment. If you need financing, budget for the cost of your monthly payment and insurance.

Step 1: Determine the type of car you are looking for. Having a budget in place and knowing if you want a coupe, sedan, minivan, sports utility vehicle, or pickup truck will make your car buying experience go much smoother. If you have a family or are planning on starting a family, select a vehicle type that provides you with enough seating.

Step 2: Decide if there are any features or options that you must have in a car, such as a sunroof, DVD player, or leather seats.

Step 3: Research cars on the Internet. If you are buying a used car, look at both private sellers and dealerships. Although you may save money with a private seller, a dealership may give you a warranty on a used car. If you are buying a new car, visit various dealerships in your area to compare prices on the type of car you want to purchase.

Step 4: Visit the Kelly Blue Book website once you have selected a few cars you are interested in buying to determine their fair market value. In case you fall in love with a car as soon as you see it and want to purchase it, knowing the value of the car will assist you in getting a good deal.

Step 5: Visit dealerships or schedule appointments with private sellers to test drive the vehicle you are interested in buying. Do not show your excitement over the vehicle or tell the seller you are interested in it.

Step 6: Ask the seller to give you the best possible price on the car if you are interested in buying it. If the price is above the Kelly Blue Book value, let the seller know that is the maximum amount of money you will spend.

Step 7: Tell the seller you want the car to be inspected by an independent mechanic if you are buying a used car.

Step 8: Make arrangements to pay for the car if you agreed on a price that works for you. If you need financing, the dealership can take your personal information, such as your name, address, Social Security Number, and gross monthly income to try to get the best loan terms for you from the lenders they work with.

Step 9: Sign a bill of sale and any other documents required in your state once payment arrangements have been made. The bill of sale must include your name, the seller's name, the make, model, year, and VIN of the car, the current odometer reading, and how much you paid for the car.

Step 10: Obtain the title for the car if you bought a used car or paid for a new car in cash. Both the seller and yourself must sign the back of the title. If you obtained financing, the title will go to your lender.

Step 11: Call your auto insurance company to add the car you purchased to your policy. Do not drive the car until you have proof of insurance.


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