Automotive - How to Buy a Car from a Dealership: A Step-By-Step Guide
I get asked by friends and family if I can help them with their car buying process. Mostly everyone just wants to make sure they are getting a good deal and I get that!
Purchasing a car is an exciting milestone, but navigating the dealership process can feel overwhelming, especially if you’re unsure where to start. With so many options, factors to consider, and sales tactics to juggle, it’s easy to feel unsure about whether you’re making the best choice.
This blog will walk you through how to buy a car from a dealership, giving you actionable steps to ensure the process is smooth, informed, and aligned with your needs. By the end of this guide, you’ll feel confident and prepared to drive off in a car that’s just right for you.
Step 1: Research the Vehicle You're Interested In
Before stepping foot in a dealership, take time to research cars that meet your needs. Ask yourself questions like:
- How will you be using the car? (e.g., daily commute, family trips, off-road adventures)
- What features do you care most about? (e.g., fuel efficiency, safety ratings, space, technology)
- What’s your price range?
Once you know what you’re looking for, use resources like Kelley Blue Book or Edmunds to gather details on different models, trims, and price ranges. Reading reviews from other drivers can also help you understand a car’s strengths and weaknesses.
Pro tip:
Compare fuel economy, maintenance costs, and resale value as part of your research. A car with a slightly higher upfront cost may end up saving you money in the long run. Factor in the cost of ownership versus just the price/monthly payment.
Step 2: Research Dealerships
Not all dealerships are created equal, so it’s worth doing your homework to avoid frustration later. Look at customer reviews and ratings on Google or seek recommendations from friends and family. Choose a dealership that has a good reputation for transparency, excellent customer service, and fair pricing.
Check if they have the car you’re interested in their inventory, as well as any ongoing promotions or offers. You can even call ahead to confirm availability so you don’t waste a trip.
Pro tip:
If you know the specific vehicle you're interested in, set an appointment to come in and see the vehicle. This way a sales person is ready for you with the vehicle pulled up (hopefully!) and you can save time.
Also, if you're looking for a used car check out Certified Pre-Owned options first by going to that specific brand. So if you're interested in a pre-owned Mercedes-Benz GLC then visit a Mercedes-Benz dealership first.
Step 3: Understand Your Payment Options
One of the most critical factors in buying a car is deciding how you’ll pay for it. There are three main payment options to choose from, each with its pros and cons.
- Paying Cash
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- Often the cheapest option, as you avoid interest payments.
- Usually gives you more negotiation power.
- Requires having a significant amount of liquid funds available upfront.
- Financing
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- Loans allow you to spread payments over several years.
- Interest rates affect total payment, so shop around for the best rate (more on this in the next step!).
- Requires good credit for the best terms.
- Leasing
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- Perfect if you want to drive a new car every few years.
- Lower monthly payments, but you don’t own the car at the end of the lease.
- Often includes mileage limits and other restrictions.
Consider what works best for your financial situation, long-term plans, and driving habits.
Step 4: If Financing, Research Interest Rates
If you’re considering financing, be proactive in finding the best interest rate. Banks, credit unions, and online lenders often offer pre-approval for car loans, allowing you to compare rates ahead of time.
Securing a loan outside of the dealership gives you more leverage during negotiations. However, some dealerships also offer competitive in-house financing, so it’s worth exploring both options. Dealerships work with a plethora of lenders and are able to sometimes get better rates that you will by going to the bank yourself. Also, since they do so much volume with loans, they are also able to negotiate lower rates and have better bargaining power than you do going in as a single borrower.
Pro tip:
A higher credit score can result in lower interest rates, so check your credit report before applying for a loan. Correct any errors to give yourself the best chance of getting favorable terms.
Down payments are also favorable with lenders and that will also help you get a better rate. Lenders like to see that you are investing in your purchase.
Step 5: Determine Your Trade-In Value
If you’re trading in your current car to help cover the cost of your new one, research its value beforehand. Use tools like Kelley Blue Book to get an estimate based on your car’s make, model, mileage, and condition.
Knowing your trade-in’s worth allows you to spot lowball offers and negotiate effectively. Keep in mind that dealerships may offer slightly less than market value since they aim to resell the car for a profit.
Pro tip:
Consider selling your car privately if you’re looking to maximize your trade-in value, but keep in mind this requires more time and effort. Also, you will have to fix any damage as well as service your vehicle if your car needs tires, brakes, routine maintenance and more!
Also, consider the trade in tax credit you'll receive as you won't get that with private party sales (some states do not have trade in tax credit).
Step 6: Choose How to Interact with the Dealership
There’s no single “right” way to approach a dealership, so choose what makes you feel most comfortable.
- Walk-in: This works well if you prefer face-to-face discussions, but be ready to manage the time spent negotiating in person.
- Call Ahead: A great option if you want to confirm inventory or get a feel for the sales process before visiting.
- Online Inquiry: Most dealerships allow you to inquire about pricing, availability, and financing online. You can often get quotes this way before stepping onto the lot.
Pro tip:
Ask for quotes in writing when contacting dealerships. This can make it easier to compare offers and hold them to their word during negotiations.
If you know what dealership you want to visit, and you know which vehicle you're interested in, I recommend submitting a lead through that dealer's website. If you submit it through sites like CarGurus, Cars.com then they have your information and may send it elsewhere. If you send your information in through TrueCar, expect your information to be sent to multiple dealers!
Step 7: Know Your Budget (and Stick to It!)
Before visiting the dealership, determine how much you’re comfortable spending—not just on the car itself, but also on associated costs like taxes, registration, insurance, and maintenance.
Once you have a budget, stand firm and resist upselling tactics for extras you don’t need or can’t afford. It’s tempting to splurge on features, but staying disciplined ensures you won’t regret your purchase later.
Step 8: Have a Clear Vision (But Stay Open-Minded)
While it’s important to know what you want to purchase and why, it’s equally important to stay flexible. Sometimes, a different car model or trim may better suit your needs after discussing your requirements with a knowledgeable sales consultant.
Be open to hearing about alternative options, especially if they align with your budget and lifestyle.
Pro tip:
Make a list of must-have features versus nice-to-haves. This will help you prioritize options and make faster decisions.
Drive Away Confidently
Buying a car from a dealership doesn’t have to be intimidating. By following these steps, you can confidently approach the process, knowing you’ve done your homework and are making a well-informed choice.
At the end of the day, the most important part of the car-buying experience is feeling confident in your decision. Take your time, ask plenty of questions, and stick to what works best for you.
Happy car shopping!
Want help with your purchase? Need insight about what to do? I can help! Contact me :)
