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It’s easy to spend more then you planned when buying a car. But spending too much on car creates unnecessary financial stress. Don’t get fooled…there are a few steps you can take to stay in your financial lane when buying a car.

Set a budget! Just like you do when shopping for a home, you need to know what you can afford. Prepare a monthly budget to determine how much you can comfortably afford for a car. Deduct monthly expenses, including your allotted amount for savings, from your monthly take-home pay. You can use the remaining amount for your car payment, insurance and car expenses.

Do your research. Research the car you want to buy BEFORE you go to a dealership. Check out performance reviews, car values, and more. The more familiar you are with the car that you are interested in, the less likely you’ll be fooled into paying more for the car that you are unfamiliar with its true value and customer complaints. Knowledge is power and it could help you negotiate for a better price!

BEFORE you shop for a car, shop for financing! You do not need to finance through the dealer. Shop around first…banks, credit unions, and finance companies. Then take your best financing offers to the dealer. Better yet, get preapproved for a loan. You can still negotiate and see if the dealer makes a better offer.

Get a vehicle report. If you are shopping used, viewing a car’s vehicle history report can help strengthen your bargaining position and ensure that they car is in good shape. Check to see if the car’s mileage correlates with the vehicle’s service records. Knowing the history of the car may also help you avoid spending money on future repairs. You will need the VIN (vehicle identification number) to obtain the report.

Discuss the “out-the-door” price of the car BEFORE you talk about financing with the dealer. Total price including taxes and fees, BEFORE financing discussions. Don’t get distracted by discussions of the monthly payment first, without considering the “out the door” price.

Understand your automobile insurance coverages. Make sure you understand basic coverages and what they cover in the event of an accident or damage. The more you understand, the less pressured you will feel when it comes to items like gap insurance and other coverages offered as add-ons.

It’s okay to say NO to add-ons, or at least ask the price. Add-ons are not free. They are all those extra things you buy and then finance along with the car. Common add-ons include gap insurance, window etching, extended warranties, and service contracts. Ask the dealer to list the price of any proposed add-on. If you’re financing, you’ll want and need to know how much it costs each month and over the life of the loan. Ask about any limits or conditions that add-ons may have – they might not cover what you expected. If you don’t want or need it, simply say no.

Learn more about add-ons: -car-add-ons.

Review the terms BEFORE you sign for the purchase and financing. Don’t be rushed. Ask the dealer to slow down, especially if they’re moving quickly and using an electronic process like an iPad or tablet to show you the agreement. Tell them you want to see the terms clearly before you agree.

Be prepared to walk away. If you can’t come to an agreement, leave the dealership. You’re the one who will be responsible for those payments, not the salesperson. Save yourself some money, reduce frustration of haggling, leave and take your money with you. There are other cars and money to be saved at other dealerships.