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September 15, 2022

Visit any dealership today, and the view will look much different from a few years ago. The effects of supply and demand, microchip shortages, and more have rocked the automotive industry, making it harder to find the car you want and at an affordable price.

While there’s less room to haggle on prices, you can do a few things to prepare for buying a new or used car and maybe even save a few bucks. Start by assessing your needs and wants to help you choose the vehicle that makes the most sense for you. Create a list of which features you must have, and which features would be “nice to have.” We’ve pulled together some tips to get you started.

Determine Your Budget

Today’s cars are more expensive than they were a year ago, which means you’ll need to budget more for a monthly car payment than you previously would have. While it’s essential to consider the total cost of the vehicle, it’s vital to also consider the monthly payment as well. According to a recent Edmunds report, the average monthly payment for a new car is $648, but this amount can go much higher, too. Used cars aren’t much better, hovering at $548 per month.

Before visiting a dealership, determine your budget for the total cost of the car and the down payment, which is usually 20% of the purchase price. However, leave a little wiggle room in case something unexpected pops up.

While you could pay the full purchase price in cash, it’s getting harder to do this with higher prices. However, if you can buy the vehicle outright, then you might have more negotiating power. If not, then consider your financing options before you hit the dealership.

Pre-Qualify for Financing

Getting your first or subsequent car is as exciting as it is necessary. We understand that, but it’s not unusual to overlook the importance of pre-approval for lending before you shop.

Pre-approval gives you a car-buying budget to work with and gives you buying power. It streamlines the process to full approval when you’re ready to buy by shortening the time for lending.

However, many members wait until they get to the dealership before applying for lending. Then, they apply for lending with the dealership. We advise against this because you might pay higher interest with the dealer’s lender than you would with private lending. While that’s not always the case, it’s best to shop around for the best interest rate before accepting an auto loan.

Remember, dealerships are in the business of making money. Our goal is to help you save money. Always check your financing options with us first. We aim to help you get the best rate possible, so you have the funds you need without overspending on overpriced interest fees. 

Once you have pre-approval, the fun begins. It’s time to shop for a car.

Shop Around

New vehicles are more expensive today, and used cars are harder to find, with lower inventories everywhere. If you’re looking for a new or used car, shop for the best prices. Some dealerships promote ordering your car in advance rather than shopping the stock on the lot. It takes time for the manufacturer to make the car and then ship it to the dealership.

If you have the time to wait and you can get a great price, then this might be a good option. However, always shop around. Look at other dealerships in the area. You might find what you’re looking for elsewhere.

Watch for Pricey Add-Ons

You’ve found your next car, and you’re ready to sign the paperwork at the dealership. However, you have one more hurdle to overcome to keep your vehicle within your budget: add-ons. Before you sign the paperwork, your salesperson offers a bunch of add-ons. While some make sense, others add expenses. Scrutinize each add-on before you decide whether to accept it.

Remember, each add-on increases your vehicle’s purchase price. To maximize the benefits of your loan, avoid maxing out the loan, if possible. Although you might have qualified for a $40,000 car loan, that doesn’t mean you must spend every penny. If you can, leave yourself some wiggle room. A smaller loan means less interest you’ll pay over the loan term, and you’ll own your car sooner.


Buying a car today differs from a few years ago. Prices are higher, and inventory is lower, but that doesn’t mean you can’t get a great deal. With the above tips, you’ll maximize your spending power and save on the final purchase price. Contact us today to discuss your car loan options if you’re ready to get started.