Skip to main content

Cookies on BBB.org

We use cookies to give users the best content and online experience. By clicking “Accept All Cookies”, you agree to allow us to use all cookies. Visit our Privacy Policy to learn more.

Cookie Preferences

Many websites use cookies or similar tools to store information on your browser or device. We use cookies on BBB websites to remember your preferences, improve website performance and enhance user experience, and to recommend content we believe will be most relevant to you. Most cookies collect anonymous information such as how users arrive at and use the website. Some cookies are necessary to allow the website to function properly, but you may choose to not allow other types of cookies below.

Necessary Cookies

What are necessary cookies?
These cookies are necessary for the site to function and cannot be switched off in our systems. They are usually only set in response to actions made by you that amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not work. These cookies do not store any personally identifiable information.

Necessary cookies must always be enabled.

Functional Cookies

What are functional cookies?
These cookies enable the site to provide enhanced functionality and personalization. They may be set by us or by third party providers whose services we have added to our pages. If you do not allow these cookies, some or all of these services may not function properly.

Performance Cookies

What are performance cookies?
These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.

Marketing Cookies

What are marketing cookies?
These cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant content on other sites. They do not store personal information directly, but are based on uniquely identifying your browser or device. If you do not allow these cookies, you will experience less targeted advertising.
      Country
          Country
          Latest News

          BBB Tip: Buying a new car

          By Better Business Bureau. August 24, 2020.

          (Getty Images)

          See the BBB Auto Resources page.

          Buying a car, whether it’s a new one or a used one, can be scary and overwhelming. But it doesn’t have to be! Keep these tips from the Better Business Bureau in mind to make the process as easy and successful as possible.

           

          Before going to a dealer

          There is a lot you can do to get ready before you even set foot in a dealership. Here are some things you should do so you are an educated and prepared consumer:

          • Consider payment options. Take time to consider your payment options. You often have two options: pay for the car in full or finance over time. Choosing to finance the car over time may mean less money upfront, but it increases the overall cost of the car if you are paying interest. If you do decide to finance it, be sure you completely understand the terms of the financing agreement before you sign. For example, ask if you will have to pay any fees if you pay off the loan early. You can shop around for the best loan through third parties like banks and credit unions. Consider being pre-approved for a loan so you have something to compare to the dealer financing. Having an offer in hand will also give you a bargaining point.
          • Set a budget. Do not automatically spend whatever you qualify for in a loan. Decide how much money you can spend, based on the maximum amount you have saved up to spend or the maximum down payment and monthly payment you can afford if you are financing the car through a loan. When calculating the cost, be sure to include the price of the tax, title, registration, fees, and insurance. You are responsible for insurance as the purchaser of the car, and the dealer is not obligated to cancel a contract because you find out later you cannot afford to pay insurance. Do not forget to consider factors like how much gas the car will use and how much maintenance and repairs will cost when looking at what impact owning a car will have on your overall budget.
          • Leasing? Determine whether buying or leasing the car provides the best value for your money. A lease offers lower monthly payments, little money upfront, and restricted mileage. At the end of the lease the car is returned and the process is repeated. Buying a car requires monthly payments and more money upfront, but once the loan is paid off, you own the car.  
          • Choose a car model. Check out various models to determine those that are the safest, most reliable, and otherwise suitable. Research and think about the equipment and options the car offers, the safety features you want, the conditions you will be driving in, and any other needs you have in mind for yourself or your family. Will you use it for commuting short distances or taking long road trips? How many passengers must fit comfortably? How long do you want to keep it? Consult resources like Consumer Reports. Consider additional factors like fuel economy, warranties, and operating costs. You should also look into theft rates as they can make your insurance higher. Investigate different cars’ accident history. Narrow your choices to several cars. Do not make the mistake of having your heart set on one car -- it may reduce your bargaining power.
          • Compare prices online.  Look up the prices of different cars on websites like Kelley Blue Book and Edmunds. By doing a side by side comparison of a few models, you can see what each car has to offer for what price. This will also help you determine the value of your trade-in, if you have one. Obtain updated price lists to compare to the dealer costs displayed on the window sticker. You will know how much bargaining room you have on the basic car and individual options. It is important to know the difference between the invoice price (the price the dealer paid for the car) and the sticker price of the car (the desired price the dealer wants you to pay). When comparing prices, also consider different warranties, length of the warranty period and what items are covered by the warranty (this may vary). Check if the warranty includes parts and labor, and for how long. Ask if there are preconditions that you, the buyer, must maintain to qualify for the terms of the warranty.
          • Look for rebates. Many rebates are available to all consumers, but some carry eligibility requirements like loyalty bonuses, military status, or trade-in bonuses. Make sure you understand these qualifications to avoid disappointment later.
          • Find a dealership. Ask friends and family members for dealerships nearby that they trust and that provided a pleasant experience. Read Business Profiles at BBB.org to see BBB Accreditation status, ratings, reviews, and complaints. Search online for the dealers’ names and the words “complaints” or “reviews” to see what people are saying about them. The dealer should not be pushy. You want a dealer who will make you feel comfortable and informed with all of the available options. Be on the lookout for reviews that mention any bait and switch tactics.

           

          At the dealership

          Remember that an ethical auto dealer will let you take the time you need to make a conscious and thought-out decision. If someone is rushing you and putting pressure on you, you may not want to do business with them.

          Here are some things to do during your visit to the dealership:

          • Take your time. If you don’t want to make a decision on your first visit, tell the dealer upfront. Let them know you want to take a test drive and will be making your decision on a purchase later.
          • Go on a test drive. This is one of the most important things to do! Drive each model you are considering and try to do so in a variety of conditions (driving through traffic, on a highway, and on back roads). Take a test drive checklist with you to examine important characteristics of the car and check out all of the features. While driving, carefully check the brakes, steering, outward visibility, and gear shifting. Turn off the radio and listen to the engine for any noises. Try parallel parking to make sure the visibility is good and you can adjust all mirrors as needed. Ensure all of the dashboard lights are on and the instrument panel is easy to read. Test the back seat for comfort for passengers sitting there and the trunk for ample space and easy access to the spare tire. Don’t be afraid to ask questions. If anybody else will be driving the car regularly, take them with you to test it as well.
          • Keep all negotiations separate. Consider questions about financing, service contracts, warranties, trade-ins, or other extras after you have settled on a price for the car. You can let the dealer know you have a trade-in, in order to initiate the appraisal process, but keep the focus on the new car first.
          • Determine the price for car. The MSRP (manufacturer's suggested retail price) sticker price taped to the car window is the amount the dealer is seeking and may be about 10-15% more than what the dealer paid for the car. Tell the salesperson exactly what car and options you would like, and ask for the best price. You may be less likely to get a good price on a more popular car that is in short supply. Make sure you discuss all the options you are interested in and that you are clear on any additional costs associated with the options. If the dealership allows it, consider bargaining for a better deal, and always get the final figure in writing. Shop around and see if other dealers will offer you better prices. Be patient when purchasing a new car. If the first or second offers are not desirable, you must be able to walk away.
          • Decide if you are buying from stock or ordering from the factory. Sometimes you will get a better deal for a car already in stock, because the longer a car sits on the lot, the more expensive it is for the dealer. These cars may have expensive options that you neither need nor want. Ask the dealer to remove the option -- and reduce the cost -- or sell you the car without charging for the option. Sometimes the better deal will come with ordering a car because it is a sure sale and the dealer does not have to invest in the car. Discuss all options to see which works out best for you. Factor in the time you have to wait for a car from the factory into your decision-making.
          • Discuss your trade-in. Once you have finalized the price for your new car, move on to discussing the trading in of your old car. Keeping that negotiation separate from the price of the new car will help you stay focused on the actual price of the new car.
          • Ask about warranties and service contracts. Make sure the information on your warranty is detailed and includes whether the warranty is full or limited and what is covered, who covers it, and for how long. Read all the details about any additional service contracts and make sure you understand them completely before signing anything. If you are considering an extra-cost service contract, compare it to your warranty closely to check for duplication. Unless the service contract offers free scheduled maintenance or other services, it may not be economical to have a service contract while the warranty is in effect. If you decide to buy a service contract, do some comparison shopping. Buying a service contract through an insurance company, for instance, may save you money.

           

          Signing the contract

          While some dealers may write a three-day cancellation into your contract, there is no blanket three-day cancellation rule (unless your purchase falls within the door-to-door rule because you received a promotion to go in for a test drive). Once you sign the contract, you are legally bound to buy the car unless the contract specifically states any options to cancel, so it is imperative that you read and understand everything before signing.

          Make sure all the features you want are listed on the order and pay attention to any extras or fees. The dealer may offer you extras such as rustproofing, fabric protection, and paint sealant. Make sure you weigh the added expense for such items against their necessity. Dealer preparation fees, such as for cleaning the car before you pick it up, may also be charged. Check the window sticker of the car. If the fine print reads, "Total vehicle price includes manufacturer's recommended pre-delivery service," or "Manufacturer's suggested retail price of this model includes dealer preparation," the preparation fees have already been charged. A document preparation fee may also be charged. Remember, this may not be a mandatory fee and may be considered part of the negotiable final price.

          If a clause concerns you, ask to have it explained or changed. Double-check all the figures to make sure they are what you agreed to. Make sure there are no blank spaces on the contract and all verbal agreements are in writing in the contract, as oral promises may not be enforceable.

          At the time of the purchase, make sure you take with you the bill of sale, purchase agreement, loan agreement, and registration papers. Make sure all guarantees, warranties, or service contracts are in writing and that you understand them. If there is a deposit due at signing, ask whether it is refundable and under what circumstances, and be sure that is spelled out in the contract.

           

          Before you drive away

          Before you sign any final papers and drive away from the dealership in your new car, take a few minutes to inspect it carefully.

          Check over the exterior of the car for any damage, such as "dings" or scratches. Look for a glossy and even finish and check that body panels are aligned evenly and the trim is secure.

          Confirm that the spare tire and equipment are where they should be, that the tire is inflated to manufacturer specifications, and that all the hubcaps and body moldings are in place. Ask the salesperson to demonstrate each accessory -- such as setting the clock or turning on the bright lights. Also, ask how to check the oil, coolant, transmission fluid, and battery. Check that all electrical items function properly and take the car for a quick test drive.

          Check the Vehicle Identification Number on the car to ensure it matches the one on the contract. Make sure you have the owner's manual, warranty forms, and all legal documents.

           

          After the sale

          Be sure to keep all of your paperwork for the vehicle, including the warranty and loan papers, in a safe place.

          Maintain a file of every repair order, receipt, and letter of complaint. There is no rule that you can return a car within 30 days if you are unsatisfied, but if your car needs constant repairs from the time you buy it, you may have some recourse.

          In the United States, you may be protected by “lemon laws” in your state. You can contact your state’s Attorney General’s office to find out about the law where you live. BBB Auto Line also has information on the lemon laws in each state, as well as a dispute resolution program to help you with your lemon law complaint.  

          In Canada, there are no ‘lemon laws,’ but purchasers of new and late model cars can access CAMVAP – the Canadian Motor Vehicle Arbitration Plan. You can find more information about qualifications and exclusions for this binding arbitration program at www.camvap.ca

          Find new car dealers near you.

          Always look for businesses that follow BBB Accreditation Standards and BBB Standards for Trust