Buying a New Car: What You Need to Know and Do (2024)

There's one part of the new-car buying process that everyone likes: the end, when you drive away in a shiny, new-car-smell-smelling car. While the road to that end may not be fun, it's important to navigate it intelligently, especially since your car is likely your most or second-most valuable asset. With some patience and planning, we're confident you can make it through this gauntlet. (Seriously, it's not that bad.) We present these points of consideration in their general order of operations, although you may need to back up a step or two if you don't make it past Go the first time through. Hang in there. This will all be over soon enough.

Purchase or Lease?

We think it was Shakespeare who once asked, "To lease or not to lease?" That, car shoppers, is the first question to consider on this journey. There are pros and cons to both options.

Purchasing outright is a good choice if you plan to keep the vehicle for a long time, and it allows you to spread payments across many years. Once it's paid off, you have a car you can do whatever you like with—keep driving it, hand it down to a relative, donate it, turn it into a Le Mans racer. You do you. Another freedom: You can drive this car as far as you want, whereas leases have mileage caps and charge for overages. The downside is that you're on the hook for all maintenance and repair during your time with the car, and getting rid of it is your responsibility.

Leasing, on the other hand, can get you into a nicer car for a similar monthly payment, the caveat being that at the end of the term you're left with nothing but (hopefully) fond memories of your time with that special vehicle. There's less guesswork about costs over the term of your stewardship, and many leases offer free or optional regular maintenance packages, so that can be a mental and financial load off. Leases also have a defined end, at which point you can wash your hands of the vehicle.

And then there's the option of a lease buyout, which is written into most contracts and permits the lessee to purchase the car outright for a previously agreed-upon sum. This is nice when you find you like the car and had little or no trouble with it over the course of the lease, and maybe your financial picture has changed and purchasing now makes more sense. It's like buying a used car with a history you already know, which is comforting as long as you treated it well.

Maybe you've always leased cars, and that's what you're used to. Fine. It's just good to get this decision out of the way early, as it will help narrow your search and ties directly into the next step: budgeting.

Set a Realistic Budget and Stick to It

Now that you've joined Team Lease or Team Purchase, it's time to decide how much money you are willing to part with. When doing so, also consider the potential costs of insurance, fuel, maintenance, and repair, as those can add up quickly, especially on more expensive and/or less efficient cars.

Remember that your budget is just that—yours. Throughout this process, you don't have to tell the dealer anything you don't want to. If the salesperson asks, politely repeat which vehicle you're interested in test-driving or getting a quote for. If you tell them your max, there's a chance they'll find something that hits it exactly or stretches the bounds with which you're comfortable. Remember that this doesn't have to be an adversarial relationship, and be nice, but realize that the person on the other side of the desk likely doesn't have your best interests in mind.

Do Your Research

Time to pick some potential new cars. We happen to have a handy Buyer's Guide for just that, filled with expert opinion, specs, and our own test results. We do have our favorites—10Best Cars, 10Best Trucks and SUVs, and our Editors' Choice picks—but you can choose any car to get an idea of price, performance, and features, and we even recommend similar vehicles for you to consider. Knowing exactly what you're looking for, down to color choices and options, will save you time at the dealer. And if there are any items you're unsure of, the testing phase will help you make those decisions.

Here again it's a good idea to think a bit into the future. What kind of car will you need in a year, in five years? Will you be transporting (more) kids, commuting farther, taking trips to a vacation home? Make sure your short list is made up of cars that meet all of your needs.

Test Drive Your Top Picks

Armed with the knowledge you've gathered, now's the time to go to the dealer and kick the tires (please don't actually kick the tires). Chances are you'll need to visit multiple stores to try everything on your list.

Call ahead to dealers that say they have the car you're interested in and make sure it's still available and ready for a test drive. It can be a good idea to map out a potential route that covers urban, rural, and highway driving, especially if you are traveling to a dealer in an unfamiliar area. If there are things you definitely want to test out—a specific feature, how easy it is to get a car seat into the back, the level of new-car smell—it's helpful to bring along a checklist and any necessary props. In the heat of the moment, you're liable to forget something.

Close the Deal

Don't be pressured into a sale. It can help to have a disinterested third party along with you—think a friend or neighbor, not your partner—to act as the voice of reason and to reel you back in if you get new-car fever.

And unless you know that this is the last model equipped just the way you want it, you can pause and do some comparison shopping between multiple dealers to get the best out-the-door price. Then, by all means, bask in that new-car smell as you drive off into the sunset.