The ‘Clark Smart’ way to buy a new car

The ‘Clark Smart’ way to buy a new car
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If you’re in the market for a new car, here are my tips for making a smart purchase.

Listen to Clark discuss the car-buying process on The Clark Howard Show podcast.

Here’s how to buy a new car

Everybody loves that new car smell. But before you sign on the dotted line, be sure you take these steps…

1. Prequalify for a car loan

You can go to your credit union, online bank or a traditional bank and prequalify for a car loan (or apply online.) By doing this, you’ll know how much car you can afford and what type of monthly payment you will have to budget.

2. Start your research with at least two different vehicles in mind

Check the price, reliability and cost to insure each of the cars you’re considering. The annual April auto issue from Consumer Reports has a list of recommended new car buys.

3. Use the Internet to find out dealer cost

Next, use the Internet to find out the dealer cost of the vehicle and the options you want. Websites like, (Kelley Blue Book) and offer great tools that will help you determine the value.

RELATED: How to buy a used car in 2018

4. Shop online for instant price quotes

When you’ve narrowed the search to one or two vehicles and have the actual dealer cost for each, shop online for instant price quotes. Websites such as,, and USAA are great for this purpose.

Costco has a car-buying program that moved 520,000 vehicles last year alone with pricing that has already been negotiated. In most cases, you’ll save money doing it this way and the process of buying will be faster and easier!

5. Alternates to shopping online

If you prefer not to buy online, use the online price quotes as a guideline and call the dealers to see if they’ll match the price quote.

Another relatively easy way to buy a car involves emailing the Internet department at a dealership and negotiating by email. Make sure you always ask for a quote that includes all the junk fees a dealer may have.

6. Watch out for junk fees

Some dealers are charging ‘packs,’ which are phony charges for documents, vehicle etching, fabric treatments, etc. It may sound silly, but it can amount to $300 or more just for doing the paperwork or spraying some stuff on your car seats! Not every dealer tries to do this, so that’s why it’s important to shop around.

7. Get some one-on-one time with your new car before buying

Look at cars when a dealership is closed, so there’s no salesperson to pressure you. The best way to test-drive a car is to rent it for a day or two. It’s the ultimate test drive.

8. Know the pitfalls of traditional dealers

If you do choose to negotiate with a traditional car dealer, be prepared for a difficult process. When you go into the dealer to sign the paperwork, make sure that what’s on the purchase agreement is what you’ve agreed to previously by phone or fax.

If it’s not the same, do not go through with the deal. The best way to protect yourself in a dealership is to be willing to walk out.

Dealers will typically mark up a loan by about 2% on the average car purchase. That’s why I so strongly recommend you secure financing on your own as a first step. And remember, my rule is 42 months should be the longest loan you agree to, for a variety of reasons.

Finally, what if the manufacturer offers zero percent financing? Before you make any decision, consult with’s Low APR vs. cash back calculator.

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