Buying a new car can be one of the most intimidating purchases you’ll ever make, if for no other reason than its price tag. While buying a used car would have set you back an average of $27,768 at the tail end of 2022, the average new car was selling for $41,445, according to Experian.

Another big wrinkle was caused by the pandemic hitting the auto industry hard, a blow from which it hasn’t fully recovered yet. As a result, a lot of traditional car-buying advice became scrambled up and thrown to the wind. We’ll help guide you through how to buy a new car today. 

1. Research Vehicle Types and Market Status

One of the first decisions you’ll have to make is this: do you need a car now, or are you willing and able to wait a long time for the right vehicle if needed? 

The answer will dictate the next steps you need to take, which can be very different. Traditional advice focuses on buying a car that’s already in stock, but the pandemic caused a big shift in how people buy new cars today. Now, it’s quite common to place a custom factory order and wait several months for delivery, especially for popular models and electric vehicles (EVs).  

For example, most experts suggest getting pre-approved before you head to a dealership. But those offers expire in 30 to 60 days, which is a problem if your car won’t be here for six months. Things are changing month by month as the economy gets back on track, so it’s important to first take current stock of what’s available, what you want in a car, and whether you’d be able to wait. 

2. Decide on a Vehicle

Once you’ve got a rough idea of the type of car you want and how difficult it will be to buy, do some additional research to zero in on the right model(s) for you. Look for features that are important to you, like interior features or ease of repair. 

It’s also a good idea to put together a list of car ownership costs, including fuel, car insurance, registration, and repairs and maintenance. The auto loan itself isn’t very useful if you can’t afford to drive your car anywhere, after all.

3. Check Your Credit

Applying for a car loan if you’re not sure of your credit can be a dicey prospect. But if you take a few minutes to look up your credit report and your credit score ahead of time, it can eliminate any surprises. 

It also helps you zero in on the right type of auto loan to apply for. If you have bad credit, for example, you know you can skip the lenders that focus on excellent-credit applicants. It also gives you time to fix any errors on your credit report so you get the best loan terms possible. 

4. Set Your Budget

If you have enough cash to pay for a new car outright without sacrificing your other important savings, like your emergency or retirement fund, that’s an ideal spot to be in. But 8 out of 10 new cars are financed, and if you have plans for that, it’s important to make sure your new car loan fits within your budget too. 

If you don’t already have a monthly budget, go ahead and make one. This will tell you how much extra money you have for a car loan payment, in addition to all of the other car-related expenses you tallied up earlier. 

From there, you can use a car loan calculator to calculate how much car you can actually afford after you add in other factors like savings for a car down payment or a trade-in.

5. Get Pre-Approved for Multiple Loans

If you’re ready to buy now, go ahead and shop around for a new car loan by getting pre-approved with as many lenders as you can. It’s usually a quick process with each lender, and it’ll show you the rates and loan options you’re likely to qualify for. Try to get all your rate shopping done within a two-week window so you can minimize any negative impacts to your credit.

If you're facing a long wait time for the car you’re interested in, then hold off on this process until you’ve already reserved the car and received notification that it’s left the factory. That way your pre-approval offers will still be valid by the time your car arrives and you need to arrange financing. 

Best Car Loan Rates

Lender	APR Range*	Loan Amounts	Loan Terms
	2.99% and up	$2,500–$100,000	24–96 months
	5.24% and up	$500–$350,000	60–84 months
	4.75% and up	Not disclosed	36–72 months
	5.39%–17.99%	$500–$150,000	36–84 months

6. Locate and Test Drive the Car

If the car you’re interested in is available near you, go to a dealership and take it for a test drive to make sure it’s comfortable to drive in.  If the car you want to drive faces a long back-order with no models available to test drive at the dealership, you’re not out of options. Many people are getting creative by turning to places like Craigslist or Turo, where you may be able to rent the car you’re interested in from someone who already has that model. 

7. Shop Around With Different Dealerships

Some dealerships may offer better deals or be more open to negotiating than others—but not always, and that may be more apparent if you’re ordering a new car. Many car manufacturers require you to place the order on their own website, with the dealership playing a smaller role just for the vehicle’s delivery. 

If you do have the luxury of being able to shop for a car in person, try visiting multiple dealerships to test-drive cars and get purchase quotes. You may be able to use these as bargaining chips as well to negotiate a lower cost on your new car. Remember, a car’s MSRP is just that—the manufacturer’s suggested retail price. Dealerships can sell you a car for a lower price if they’re keen enough for your business.

8. Close On the Deal

Once you’ve identified the exact car you want to buy, it’s time to head to the negotiating table. Show the salesperson your pre-approval offers and ask if they can do any better. If the dealership is able to give you a better financing offer based on the legwork you already did, then great. If not, go with your best pre-approved offer. 

Read all of your paperwork thoroughly, and keep a special lookout for any sneaky dealership fees or add-ons. 

9. Get Your New Car

Depending on the dealership’s policies, you might be picking up your car at the dealership or having a salesperson come to your house. Either way, make sure you do a full visual inspection just as if you were renting a car. Look for any dents, dings, or other defects, and check that the gas tank is full.  Ask the salesperson for a demonstration of the key things you need to know to drive your car, like how to operate all of the switches. After that, you’ll be off to fresh adventures with your new car.