9 Rules for Buying a Car with Zero Regrets

1. Up, up, up your credit score
You should consider working on improving your credit score as soon as you can. This means well before you even need a new car. How do you do it? Things like paying your bills on time and paying down high balances may help. Bonus: You might even get a better interest rate on a car loan. 

2. Study up like your life depends on it
Use websites like Autotrader and Kelley Blue Book to know the whats and whys of the cars you are interested in buying or leasing. For instance, are you looking for a car with incredible mileage (hello, hybrid) or new tech (electric all the way) or a higher body profile (hiya, crossover SUV)? This is the time to research all of your options and figure out where you want to spend your money.

3. Know your price
For a new car, try not to pay too much attention to confusing and easily misconstrued numbers like the invoice price (what the dealer paid for the car) and the MSRP (the manufacturer’s suggested retail price). Instead, to see if you’re getting a good deal, check out one of the many online car-buying services such as the one available through Chase Auto. All you need to do is plug in the car’s make and your zip code and you’ll be able to compare vehicle prices. You’ll also be able to see how much other buyers have paid for the same model you want, and use that as a starting point in your negotiations. Hint: You can do the same for used cars too. Just check out the resale price of the specific models.

4. Research auto loans
Financing your car through your bank might get you a better rate than what’s offered at the dealership. Psst… Chase Auto has an auto loan calculator where you can get estimated rates and monthly payments on a Chase auto loan.

5. Test-drive (always)
Shockingly, a full 10 percent of buyers don’t even try their car before they buy. Say what? Don’t let that be you. Visit a couple dealerships, including one across town (prices can vary dramatically), drive a few cars, then go home and think about it. You don’t want to make an impulse decision on something with such a big price tag.

6. Negotiate terms
Know what you feel comfortable actually paying and then start off by negotiating for a price that’s a bit lower. Also, let the dealer know that if they can meet your target price, you’ll be ready to buy on the spot (rather than visiting other dealers). After you set your price, prepare for some back-and-forth between you and the dealer. Eventually, you should be able to meet in the middle, i.e., at your “comfortable” price.

7. Buy based on purchase price, not monthly payments
If that low, low monthly payment goes on for five years, how much of a deal is it, really? Think about it: A longer auto loan will definitely decrease your monthly payments, but in the long run you may end up paying more in total interest charges. So even though it sounds great at the time, it may not be worth it down the line.

8. Don’t forget insurance
If you’re like us, you’ve had a few fender benders. So your insurance payments aren’t super cheap. Get an online quote from your current insurance company plus an additional one: Type in your address, driving history and proposed car model to see how much it will cost to insure your shiny new baby.

9. Buy a car you can afford
The general rule is 20/4/10, which breaks down like so: a down payment of 20 percent, no more than four years to finance the car and all monthly expenses (principle, interest and insurance) below 10 percent of your gross income. Here’s why it works: With at least 20 percent saved beforehand, you have a better chance of paying off the car sooner. Four years also limits the amount of interest you’ll pay, and keeping your monthly expenses at less than 10 percent of your income allows some breathing room if you lose your job or have an unexpected bill.