Home > Auto Loans > 5 Questions All First-Time Car Buyers Should Ask

Comments 0 Comments
Advertiser Disclosure


With auto sales estimated to exceed 17 million in 2015, per the National Automobile Dealers Association and other analysts, you could say it was another good year for car dealers. Now we’re entering a phase where a lot of pent-up demand has been met, so 2016 could turn the tides in buyers’ favor, said Matt DeLorenzo, managing editor for Kelley Blue Book’s KBB.com, an auto research site.

A well-informed consumer will be in a good position,” he said, “but you have to do your research upfront.”

We’ve compiled a handy set of questions all rookie car buyers should ask — both of themselves and the car dealer. Don’t visit the showroom without them.

Doing Your Homework

Having a baseline of information about what type of car you want — and how much it will cost — can be priceless.

“You have to ask yourself, ‘What can I realistically afford?‘” DeLorenzo said. “The showroom environment might put you in a more expensive model” than your budget can handle.

Once you’ve got your number, the next thing to ask is, Should I lease or buy? The answer will depend on how you plan to use the car, although you can read more on making the lease vs. buy decision here. If you don’t plan to put a lot of miles on the car in a year and want a new one every so often, a 2- to 3-year lease may be right for you. Just know a lot of leases have mileage caps and excessive wear and tear provisions, DeLorenzo said, so you could end up owing money you hadn’t otherwise planned on spending.

If you plan on keeping your wheels for a while, you’ll need to ask, Should I buy used or new? With a new car you can finance for a longer period (and keep the car longer) so you won’t have to worry about mileage and condition. If you’re going the other route, consider a certified pre-owned car (CPO), which is different than buying a car from a private party. With these cars, the dealership has inspected the used vehicle, DeLorenzo said, and will offer a warranty.

Your credit score will play a major factor in how much car you can afford, so be sure to check your credit before you start applying for loans. You may spot errors that you can quickly correct to boost your score and save you major money over the life of your loan. You can check your credit scores for free every month on Credit.com to see where you stand.

At the Dealer

No matter what car you’re buying, always ask, Are there any particular incentives on this vehicle? That applies to cash rebates, subsidized, or 0%, financing, and whether you need to put any money down, especially if you’re not trading in. In short, you’re asking, How much will you need from me upfront to make this deal? If there are cash rebates and other incentives, be sure to ask how the lease deal works. “You can get two or three different scenarios on acquiring this car and what your monthly payment should be,” DeLorenzo said.

Once you know what you’d be signing up for, it’s time to whip out the second-biggest question: Are there any add-ons or documentation fees?

“A lot of times they’ll have a fairly attractive ad price, but then once you get in and start negotiating for the car, you may find there are a lot of documentation fees where the dealer is trying to build margin back into the deal,” DeLorenzo warned. Again, the most important thing is to know what you want.

Avoiding a Lemon

The last thing you want is to drive home a lemon, so be sure to check sources like Consumer Reports and the J.D. Power Auto Ratings, especially if the car is used. Also, research what kind of service the car was in. For example, was it leased, a daily rental, an Uber, etc.? How the previous owner used the vehicle may determine how good it is for you to own and operate, DeLorenzo said. Carfax, which offers registered used car listings and histories, is a good place to start your research.

More on Auto Loans:

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team