Convertible in the sun

You can already smell that new car scent, feel the steering wheel in your hands, and hear the click of the seat belt. As exciting as buying a new set of wheels is, the thought of making a mistake with one of your biggest purchases can be stressful.

Beat the car shopping scaries and set yourself up for success by asking these five questions before you set foot on the car lot.

1. How much should I pay for a car?

With a million acronyms — MSRP, KBB, TMV — and so much jargon, it can be difficult to keep up with the different terms related to vehicle buying. (Understanding “pedal to the metal” can only get you so far.)

The most common price term for new cars is MSRP, or manufacturer’s suggested retail price. This is the price shown in ads and on the vehicle’s sticker — hence its other name: sticker price. Negotiations will typically begin at this price.

Another term to know is dealer invoice, which is roughly how much the dealer paid to the carmaker. Keep in mind that it’s going to be lower than the MSRP, since that’s how car dealers make a profit. Asking to see the invoice may be a good idea since you’ll be able to see if your dealer paid any additional fees (we’ll touch more on that later).

If you’re buying a new car, a good rule of thumb is to try to pay somewhere between the invoice and sticker price. Fortunately, plenty of resources can help you. Kelley Blue Book, Edmunds True Market Value, and National Automobile Dealers Association guides all analyze consumer trends, industry developments, location, and other data to come up with fair-market car prices.

If you’re considering a used car, you can use the same resources to determine market values, as long as you know the age and approximate mileage of the vehicle. When you identify a used car that you are interested in, it’s also a good idea to get a vehicle history report so that you are aware of any prior accidents or damages.

Don’t get overwhelmed by the different prices you might see for the same vehicle. Instead, use this information to your advantage. Doing your research and having a solid understanding of the car’s market value is the key to making sure you pay a fair price.

2. Should I get financing for a car?

Before heading to the dealership, it’s important to understand how much you can afford when it comes to vehicle expenses. Many experts suggest keeping your monthly payment to no more than 10% of your take-home pay. To get a better idea of how much car you can afford, use our Monthly Car Payment calculator.

After you’ve established your budget, it’s time to start thinking about how you’ll pay for your car. Unless you plan to pay cash, you’re probably going to need other financing options. One option is to apply for pre-approval from your bank or credit union.

Another option is to inquire about financing options available through your dealer once you’ve selected a vehicle. We work with dealerships across the country to offer a variety of Ally auto financing options with flexible terms and monthly payments that can be made via our mobile app. Auto financing options are available for new and used cars.

Whether you go through a bank, credit union, or car dealer, your financing provider will use your credit score, among other things, to help determine the interest rate you qualify for. Generally speaking, a better credit score can help you get a lower interest rate.  These tips can help give your score a boost.

3. Will I be allowed to negotiate?

Absolutely — and you should.

Be prepared, though. Negotiating may be less successful in certain instances, like if the vehicle is new to the showroom, you’re in an isolated area with few dealers, or you picked out a super rare model or color combo.

Still, don’t get intimidated by the overbearing salesperson stereotype. Negotiating is all about preparation and attitude, so do your research and give it a shot. Intimidating as they may be, car salespeople want you to feel like you landed a good deal. Plus, they want to leave you feeling satisfied so you will purchase another car from them again someday.

4. What additional fees might I be charged?

Before you shake hands on a deal that may seem like it’s too good to be true, make sure you ask about extra fees. The “out-the-door” cost will reveal the “TT&L” or tax, title, and license costs. These may include state and local sales taxes, and DMV registration (which your dealer kindly handles for you).

You might also face charges for dealer expenses, like shipping, vehicle prep, or advertising fees, which may be part of the invoice cost.

Fees can add a hefty sum to the sticker price, so make sure you know about them before you sign on the dotted line.

5. Should I consider additional protection?

Many dealers will offer you a vehicle service contract when you purchase a new or used vehicle. This is a protection plan that can cover the cost of vehicle repairs outside of the manufacturer’s warranty. Many vehicle service contracts, like Ally Premier Protection, also come with benefits like 24/7 roadside assistance which can be a major stress reliever for unexpected car troubles. Because no one’s got time to be broken down on the highway during a snowstorm, unsure of who to call.

Vehicle service contracts can be especially helpful if you are considering a used vehicle, or if you’re on a tight budget that would be blown by a hefty car repair bill.

Ready to hit the road?

Buying a car means answering dozens of questions. Sure, some are fun: “What color interior do you want?” But there are also tough ones, including, “What monthly payment can I afford?”

Don’t be intimidated, though. Knowing the answers to these five questions means you’re ready to get your hands on that set of keys. If you understand your options and what to be on the lookout for, you shouldn’t be hit with any last-minute surprises.

Ready to get behind the wheel of a new car and feel the wind through your hair?

Find out how we can help you secure a auto loan