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3: Analyze Your Circumstances

Make a Car Buying Plan

Buying or leasing a car can be a stressful experience if you don’t do your homework. The more upfront effort you put into finding the right car at the right price, the better deal you will get in the end. 

Determine your needs. How long do you need the vehicle to last? Do you need a new car or do you need a used car just to get around town? Think through your daily routine to determine what type of car would best serve your needs. What are your criteria?

Research your options. Some car models have a history of great performance; others don't. Go online to websites such as Edmunds, Kelley Blue Book or NADA Guides to compare costs, read reviews and get free advice about buying new and used cars.

Look for incentives and rebates. Dealers and car manufacturers offer various incentives and rebates to lure customers. A cash rebate amounts to an immediate reduction of the price of the car, whereas a dealer incentive may include no-interest or low-interest financing. 

Get quotes. If you're buying from a dealer, shop around. Get quotes from at least three dealers for the car you want (make sure the quotes are for the same model, options, color and features). If you're buying from a private party, make sure you check the True Market Value from Edmunds or the Blue Book Value from Kelley Blue Book.

Be flexible. Do not fall in love with any vehicle until you have done a test drive and researched customer reviews online. When dealing with a seller, don’t be afraid to walk away. 

Consider a car-buying service. A number of organizations such as AAA, warehouse clubs (e.g., Costco), and credit unions offer car-buying services to help people negotiate with car dealers to buy a new car. 

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