What Car Should I Buy Guide

Car Buying Tips: How to Buy a Car

How to Buy a Car

Written by
July 28th, 2020

Everybody’s got an opinion or piece of advice on how to find the best car at the lowest price. You can become so bombarded with information that the process becomes filled with trepidation. Don’t fear, however. It becomes much more manageable when you break it down into individual steps.

We, at Nissan, have been helping US customers find the right car for over 60 years, including offering assistance with the often-complex sales process. This page is designed to help you navigate this process so you can drive away in the car that’s suited to your needs and budget. Let’s explore how to buy a car in seven steps.

Looking for help with a more specific car buying issue? Check out our comprehensive guides on How to Buy a Used Car, First Time Car Buying, and Lease Buyouts.

STEP 1

Find the Best Car for You

The search for a new car should not be treated like a sprint. Desperation for a new set of wheels will lead to a hastily made decision and the potential for a lot of unforeseen problems shortly after you take ownership of the new vehicle.

Take a close look at exactly what type of vehicle suits your family situation, living environment and your general lifestyle. A large SUV is an unnecessary additional expense if you typically drive alone on dry roads and need a simple vehicle to get to your downtown office. Of course, the automotive industry can be confusing, and it can be difficult to distinguish between the importance of ‘drivetrains’ and ‘transmissions’ let alone the intricacies within each. Need help? Here’s how to Find The Best Car For You.

You may also be struggling to make a decision between two or more car types, whether it’s a sedan, hatchback, SUV, truck or anything else. The differences can be subtle in some of these comparisons, but it’s these smaller details that can contribute to a much more enjoyable car ownership experience. Learn more in our Types of Cars page if you’re struggling to make up your mind.

If you already have a vehicle in mind that you want to pursue, then keep reading below. Avoid getting emotionally attached to the vehicle as this can often end up with the customer leaping into a poor financial decision. If you keep your wits about you and develop an in-depth knowledge of the car buying process, then you’re much more likely to emerge with a reliable, enjoyable car at a great price.

If you keep your wits about you and develop an in-depth knowledge of the car buying process, then you’re much more likely to emerge with a reliable, enjoyable car at a great price.

STEP 2

Plan your Financing

So you’ve chosen your vehicle. What next? It’s time to determine not only your budget and what you can afford, but also what you’ll need, and how, to secure a loan. This could be one of the larger purchases you’ll make, and being educated on the financial aspects will help you navigate the process like a pro.

Set Your Budget

Most financially shrewd analysis of car buying states that you should budget about 10-15 percent of your monthly net income (after tax) on car repayments. To some, this may seem like a low estimation. Bear in mind however that this figure doesn’t factor in insurance, fuel and maintenance costs.

The stronger your credit rating and larger your down payment, the better the budgeting scenario. This can potentially reduce the length of your repayments as well as the loan interest rate. Setting out a viable financial outlay for your car purchase is an important starting point. Now you can fine tune your search to the vehicles that match your needs and budget.

We’ve also developed a few tools to make it easier to set your budget, like figuring out how much you can get for your old car with our Trade-In Value Tool, or assessing your financing options using the Nissan Payment Calculator or Estimate Credit Score Tool. Visit Nissan’s Shop@Home to find everything you need from payments estimates to delivery options all in one place.

Review Your Credit Score

The higher your credit score, the easier it will be to secure a pre-approved car loan with relatively low interest rates. Keep this in mind from the first moment you consider buying a new car because you might still have time to improve your score before approaching banks for a loan. This section takes a look at what you can expect to pay based on your credit score, as well as the options if you have a poor credit score but need to buy a car in the near future.

Prepare for a Loan

Buying with cash is always preferable to avoid paying interest on a car loan, but this is unrealistic for most people. Lenders are used to dealing with this type of request though, so requesting financing is a relatively straight forward process. It is worth noting that dealers often work with lending partners to offer attractive payment options and interest rates that may not be available to the general public. Getting pre-approval for a car loan gives you added assurance during the car search but having a poor credit score can be a hinderance. Learning as much as you can about the various loan options that exist as you start looking around is important. Let’s take a closer look at your financing options.

300-850 Credit Score Icon

How to Get a Pre-Approved Car Loan

Getting a pre-approved car loan is a great way to start the search for a new car. By knowing how much the bank is willing to lend you, you will know exactly what you can spend. Securing a pre-approved car loan is about being well prepared and having a good handle of your personal finances. Let’s assess some of the steps in getting a pre-approved car loan.

Step-by-Step to Get Pre-Approved

Check your Credit Score

Your credit score is used by financial institutions to determine how capable you are of paying your loan back. This analysis is carried out based on your history of paying off everything from credit card debt to mortgage repayments or phone bills. If you don’t pay off bills promptly, the bank is likely to assess you as a greater risk and you will have a lower credit score. Checking your credit score is a straightforward process that can often be done through a bank’s smartphone app. For an individual credit history, the credit score is a figure that ranges from 300 – 850 with anything over 750 usually regarded as very good, and anything under 600 generally seen as high risk. The better your credit score, the better your chance of securing a pre-approved car loan. Credit scores can differ depending on the source, and the score you can access may differ from what a dealer can offer.

Research Lenders and Interest Rates

If you’re confident that your credit score is sufficient to secure pre-approval, it’s time to start approaching lenders to see what they can offer. Don’t assume that your existing bank will have the best offer. Take a look at the websites of a variety of financial institutions to see what they are likely to offer. You’re likely to find plenty of information on their pre-approved car loan interest rates before you even visit their local branch.

Step-by-Step to Get Pre-Approved

Check your Credit Score

Your credit score is used by financial institutions to determine how capable you are of paying your loan back. This analysis is carried out based on your history of paying off everything from credit card debt to mortgage repayments or phone bills. If you don’t pay off bills promptly, the bank is likely to assess you as a greater risk and you will have a lower credit score. Checking your credit score is a straightforward process that can often be done through a bank’s smartphone app. For an individual credit history, the credit score is a figure that ranges from 300 – 850 with anything over 750 usually regarded as very good, and anything under 600 generally seen as high risk. The better your credit score, the better your chance of securing a pre-approved car loan. Credit scores can differ depending on the source, and the score you can access may differ from what a dealer can offer.

Research Lenders and Interest Rates

If you’re confident that your credit score is sufficient to secure pre-approval, it’s time to start approaching lenders to see what they can offer. Don’t assume that your existing bank will have the best offer. Take a look at the websites of a variety of financial institutions to see what they are likely to offer. You’re likely to find plenty of information on their pre-approved car loan interest rates before you even visit their local branch.

Apply for Pre-Approval

With a strong credit score, you can seek financing with confidence. Each bank will assess your risk differently, so apply for pre-approval with a variety of banks to try and secure the best possible interest rates. You’ll be asked for plenty of paperwork as part of this process, including your Social Security number, proof of income and identification.

Review your Offers

Take a close look at the terms of the pre-approved loans you’re being offered. Look beyond mere interest rates, as you could end up paying more through other charges if you don’t look through the paperwork closely. You don’t need to choose one over another just yet however. Once you know how much the lender is willing to back you for, you can begin shopping, safe in the knowledge that you have pre-approved financing.

Apply for Pre-Approval

With a strong credit score, you can seek financing with confidence. Each bank will assess your risk differently, so apply for pre-approval with a variety of banks to try and secure the best possible interest rates. You’ll be asked for plenty of paperwork as part of this process, including your Social Security number, proof of income and identification.

Review your Offers

Take a close look at the terms of the pre-approved loans you’re being offered. Look beyond mere interest rates, as you could end up paying more through other charges if you don’t look through the paperwork closely. You don’t need to choose one over another just yet however. Once you know how much the lender is willing to back you for, you can begin shopping, safe in the knowledge that you have pre-approved financing.

Car Loan FAQs

What to do if you don’t get pre-approved?

There are a few options if you don’t get pre-approved. If you’re in urgent need of a new car, you should still be able to secure dealership financing with slightly higher interest rates. If you have time to shop around, it’s probably more beneficial to try to improve your credit score. This can be done by simply paying off your bills and credit cards as soon as you can. Check for your pre-approval on nissanusa.com.

Hard vs soft credit inquiries?

A hard credit inquiry will give you more assurance about your financing capabilities. A hard credit pull is the term used if you secure a pre-approved car loan, where the agreed interest rate is very secure. A soft credit pull is associated with seeking ‘pre-qualification’ for a car loan. This is provided based on a more limited range of information than what’s sought for pre-approval. This makes the customer a slightly bigger risk, so the offered rate is still subject to change based on a deeper credit check carried out at a later date.

Do you need credit to buy a car?

No, it’s preferable to pay with cash because then you won’t need to spend your hard-earned money on interest on your loan. If you don’t have the cash to pay for a car up-front however, allied with a poor credit score, it makes financing very difficult. One last option is to seek out a ‘co-signer’ for your loan, which is likely to be a family member or friend who essentially backs your loan with their own credit rating. These people can be left on the hook if you fail to repay your loan however, so be careful of going down this route.

Learn More

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Credit Score Needed to Buy a Car

A credit score is a figure that ranges from 300-850, and you’ll want to be on the higher end of that scale to secure a good financing deal. Your credit score isn’t something you can improve over the course of a few days or weeks, however. It’s the bank’s way of assessing how risky your loan could be, so make sure to keep on top of your credit score to end up securing a low interest rate. There are lots of ways to do this, and still a few options if you have a poor credit score. Let’s take a closer look at some key credit score topics.

How credit scores affect car loans

Your credit score is a key figure used by banks as part of their calculations into a pre-approved car loan application. An excellent credit score proves to the bank that you are shrewd with your finances, paying off loans promptly and keeping debt to a minimum. You’re likely to be offered the best interest rates because the bank is very confident that you’ll be capable of paying back the loan. The opposite goes for a low credit score, with the bank increasing interest rates to guard against an inability to pay back the loan.

What’s a good credit score to buy a car?

A credit score of 700 or higher is seen as excellent, with banks likely to look very favourably on your ability to pay back the loan. Anything between 600 and 700 is a bit of a middle ground, and it’s important to shop around for the best loans because different banks will offer varied loan terms based on their own reading of your risk. A 600 credit score for car loans or lower is regarded as poor, with banks either refusing to approve a loan or adding high interest rates to the terms of the loan.

Car loan rates by credit score

This will vary depending on your exact credit score and the bank you’re applying for financing with. Generally, a car loan applicant with a credit score of 700 or higher should expect to pay anywhere from 0 to 6 percent interest on their loan. Interest rates are generally a little bit higher for financing on used cars. Loans with credit scores of 600 or lower could have interest rates of between 10-20 percent, so it pays to improve your credit score for as long as you can before closing the deal on a new car.

How to talk to lenders about your credit

Your credit score isn't the start and the end of the discussion when it comes to securing car financing. The credit score summarizes a wide variety of issues, and you might be able to explain to your bank manager why the credit score doesn’t accurately reflect your future financial outlook. Maybe you just got a new job or secured another sudden income boost. Your credit score won’t reflect this, so you may need to prove that your future ability to pay off debt will be much brighter than your past. Have the documentation there to prove that your current personal finances are in good shape, and they may look more favourably on your credit score history.

How to improve your credit score

If you foresee that you will be in the market for a new car within the next 6-12 months, then do what you can to improve your credit score in the meantime. This means keeping your credit card debt to a minimum, and promptly paying off any monthly bills or loan repayments. Avoid applying for any other credit during that time too, so you can prove to the bank that repaying the car loan will be your top priority.

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6 Steps to Buying a Car with Bad Credit

Long-term planning isn’t always possible when it comes to buying a car. A sudden breakdown could prompt shorter search than you had hoped, leaving you in a bind if your finances aren’t in tip-top health. There are options out there however if you have a poor credit score and are struggling to secure bank financing. Here are some of the best options.

Clean up your credit

If time is on your side and you can wait for six months or more until buying a new car, then you have plenty of time to improve your credit score. Reduce your credit card debt as much as possible and pay off any monthly bills as quickly as possible. This all reflects well on your ability to pay off debt, and your credit score is likely to improve. Also, avoid taking out any new credit in the meantime, like applying for a new credit card.

Know what you can afford

The bigger your loan, the more interest you’ll be paying. This is magnified when you have a bad credit score, quickly leaving the buyer in negative equity where they’re paying more money for the loan than the car is worth. Take a close look at the used car market, where you should be able to find excellent cars at a fraction of the cost of new versions. Analyze how much money you have left every month after paying your bills and covering any other household costs. This excess cash should be your absolute limit (spend much less, ideally) on what you set aside for monthly car repayments.

Clean up your credit

If time is on your side and you can wait for six months or more until buying a new car, then you have plenty of time to improve your credit score. Reduce your credit card debt as much as possible and pay off any monthly bills as quickly as possible. This all reflects well on your ability to pay off debt, and your credit score is likely to improve. Also, avoid taking out any new credit in the meantime, like applying for a new credit card.

Know what you can afford

The bigger your loan, the more interest you’ll be paying. This is magnified when you have a bad credit score, quickly leaving the buyer in negative equity where they’re paying more money for the loan than the car is worth. Take a close look at the used car market, where you should be able to find excellent cars at a fraction of the cost of new versions. Analyze how much money you have left every month after paying your bills and covering any other household costs. This excess cash should be your absolute limit (spend much less, ideally) on what you set aside for monthly car repayments.

Save for a bigger down payment

Like improving the credit score, this is only a realistic option if buying a car is a long-term plan. The bigger your down payment, the smaller the loan you will actually need to pay interest on. So, if you are struggling to improve your credit score, the best thing you can do is set aside as much money as you can to lay a bigger down payment. The smaller the loan you need, the more likely the bank manager is to look on your application favourably and you might end up with a better deal.

Get pre-approved

If you have the time to work on improving your credit score, you should then be in a good position to apply for a pre-approved car loan. Click here for more details on the benefits of pre-approval, and how to secure this type of financing arrangement. Applying to be pre-approved too much can affect your credit score, so use it sparingly.

Save for a bigger down payment

Like improving the credit score, this is only a realistic option if buying a car is a long-term plan. The bigger your down payment, the smaller the loan you will actually need to pay interest on. So, if you are struggling to improve your credit score, the best thing you can do is set aside as much money as you can to lay a bigger down payment. The smaller the loan you need, the more likely the bank manager is to look on your application favourably and you might end up with a better deal.

Get pre-approved

If you have the time to work on improving your credit score, you should then be in a good position to apply for a pre-approved car loan. Click here for more details on the benefits of pre-approval, and how to secure this type of financing arrangement. Applying to be pre-approved too much can affect your credit score, so use it sparingly.

Get a co-signer for your car loan

Sometimes it’s a good idea to get somebody you know, with an excellent credit score, to back your loan by co-signing it. This leaves them on the hook if you fail to make your repayments on the vehicle, so beware of this option.

Explore buy here, pay here

If you can't secure financing through a bank, then you should still have the option of financing the car through the dealership you're purchasing from. You can often get this kind of 'buy here, pay here' loans without a credit check. The downside of this type of financing is that you're likely to be paying higher interest rates because of the risk that the dealership is taking on the loan.

Get a co-signer for your car loan

Sometimes it’s a good idea to get somebody you know, with an excellent credit score, to back your loan by co-signing it. This leaves them on the hook if you fail to make your repayments on the vehicle, so beware of this option.

Explore buy here, pay here

If you can't secure financing through a bank, then you should still have the option of financing the car through the dealership you're purchasing from. You can often get this kind of 'buy here, pay here' loans without a credit check. The downside of this type of financing is that you're likely to be paying higher interest rates because of the risk that the dealership is taking on the loan.

Learn More
How To Save For A Car
STEP 3

Decide on Leasing vs Buying

Leasing and buying are two payment options to acquire your desired vehicle, but it’s a decision that will have a big bearing on your driving experience in the years that follow. Buying gives you ownership of the vehicle accompanied by increased up-front costs, while leasing allows you to enjoy the vehicle for a few years at a cheaper rate, but without the eventual freedom of owning the vehicle. It’s another decision that comes down to your driving style and personality, so let’s take a closer look at the pros and cons of leasing vs buying a car.

Leasing vs Buying a Car: Pros and Cons

You can only own a vehicle by buying it, but this is more expensive than leasing a vehicle over a two or three-year period. Leasing may limit your driving freedom however, with mileage restrictions and extra costs if you seek to end the lease early.

Leasing Pros

Lower monthly payments

If you decide to lease a new vehicle, then you’re essentially paying to cover the depreciation of the vehicle before you have to hand the keys back. This usually works out much less than the cost of monthly loan payments if you’re buying the car. Purchasing a car usually also necessitates a down payment in the region of 10-20%, but lessees may only be required to pay a small deposit by comparison.

Rotate your vehicle

You may be prone to swapping cars every couple of years, and this is a personality trait that suits leasing. As your current lease comes to an end, you can jump into something completely different without having to worry about depreciation and the general resale process. If you’re curious about leasing offers, then visit Nissan's Regional Offers page for information on our broad range of new models, or estimate lease payments with our Payment Calculator.

Leasing Cons

Mileage restrictions

Leasing companies want to make sure that the vehicle is returned in excellent condition, so beware of charges that restrict excessive driving. A lease will include mileage restriction that can vary from 10,000 for low mileage leases and 15,000 miles per year being the more typical standard. There are additional charges for every mile exceeded. This is usually sufficient for drivers with a short commute to work, but it might not suit if you have a work or social life that involves a lot of travel on the road.

Early termination charges

While you can enjoy the thrill of leasing a new car at the end of every lease period, this is offset by inflexibility of a leasing contract. This usually makes it quite expensive to end your lease before the expiration date if you find another vehicle that you’d like to buy in the meantime.

Leasing Pros

Lower monthly payments

If you decide to lease a new vehicle, then you’re essentially paying to cover the depreciation of the vehicle before you have to hand the keys back. This usually works out much less than the cost of monthly loan payments if you’re buying the car. Purchasing a car usually also necessitates a down payment in the region of 10-20%, but lessees may only be required to pay a small deposit by comparison.

Rotate your vehicle

You may be prone to swapping cars every couple of years, and this is a personality trait that suits leasing. As your current lease comes to an end, you can jump into something completely different without having to worry about depreciation and the general resale process. If you’re curious about leasing offers, then visit Nissan's Regional Offers page for information on our broad range of new models, or estimate lease payments with our Payment Calculator.

Leasing Cons

Mileage restrictions

Leasing companies want to make sure that the vehicle is returned in excellent condition, so beware of charges that restrict excessive driving. A lease will include mileage restriction that can vary from 10,000 for low mileage leases and 15,000 miles per year being the more typical standard. There are additional charges for every mile exceeded. This is usually sufficient for drivers with a short commute to work, but it might not suit if you have a work or social life that involves a lot of travel on the road.

Early termination charges

While you can enjoy the thrill of leasing a new car at the end of every lease period, this is offset by inflexibility of a leasing contract. This usually makes it quite expensive to end your lease before the expiration date if you find another vehicle that you’d like to buy in the meantime.

Buying Pros

Ownership

When you’re leasing a vehicle, you can never truly call it your own because you’re really just renting it. Owning a vehicle means you have an asset which you can buy and sell as you please. You can also modify the vehicle with updated parts or accessories to make it distinctly yours, but beware that some of these alterations could have an impact on your insurance premium.

Freedom to Sell

Owning a vehicle gives you so much more flexibility to do what you like with it. You can sell it after six months, hold on to it for 10 years, or keep your options open at any time in between. If you look after it well, you can also sell it for a good price whenever you like and potentially use that resale value to fund the purchase of another vehicle in the future.

Buying Cons

Up-front costs

Buying a vehicle usually requires laying down a hefty up-front payment of in the region of 10-20% of the vehicle cost. You’re also making monthly loan repayments with the intention of paying for the entire vehicle, which means they will be much higher than a typical monthly lease payment.

Resale Process

When a lease expires, you simply return the vehicle and pay any outstanding fees or decide to buy the vehicle outright. When you buy a vehicle, you must then consider the resale process. This means jumping back into the new or used car markets, finding the right one for you, going for test drives, and organizing long-term financing. Leasing a vehicle can be a relatively stress-free option by comparison. Explore Nissan-specific purchase and leasing information.

Buying Pros

Ownership

When you’re leasing a vehicle, you can never truly call it your own because you’re really just renting it. Owning a vehicle means you have an asset which you can buy and sell as you please. You can also modify the vehicle with updated parts or accessories to make it distinctly yours, but beware that some of these alterations could have an impact on your insurance premium.

Freedom to Sell

Owning a vehicle gives you so much more flexibility to do what you like with it. You can sell it after six months, hold on to it for 10 years, or keep your options open at any time in between. If you look after it well, you can also sell it for a good price whenever you like and potentially use that resale value to fund the purchase of another vehicle in the future.

Buying Cons

Up-front costs

Buying a vehicle usually requires laying down a hefty up-front payment of in the region of 10-20% of the vehicle cost. You’re also making monthly loan repayments with the intention of paying for the entire vehicle, which means they will be much higher than a typical monthly lease payment.

Resale Process

When a lease expires, you simply return the vehicle and pay any outstanding fees or decide to buy the vehicle outright. When you buy a vehicle, you must then consider the resale process. This means jumping back into the new or used car markets, finding the right one for you, going for test drives, and organizing long-term financing. Leasing a vehicle can be a relatively stress-free option by comparison. Explore Nissan-specific purchase and leasing information.

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Lease or Buy a Car
STEP 4

Locate and Test Drive the Car

You’ll find a lot of cars online that pique your interest, but don’t let yourself get teased. You might not be able to find that specific car or trim level in your own locality, let alone your own state. Car dealers often won’t have all available trims on site, but there are easy ways to find out. Once you do find a car nearby that you want to check out, don’t rush into a decision. Give yourself plenty of thinking time including carrying out a comprehensive test drive before taking the next step. Scroll down for further details.

Find the Vehicle Near You

When buying a new car, you can do a lot of your reconnaissance work online these days. Car manufacturers have a vast amount of information about their models on their websites, and most of them publish entire inventory lists of what’s available at each of their dealerships. See the Nissan vehicle inventory tool for example.

Inventories makes it very easy to find specific models and trims, and associated pricing, as well as contact information for dealers if you want to take a look at the car with your own eyes. Don’t become disheartened if you don’t find the model you want at your local dealer. Get in touch with them to see if the stock will be replenished in the near future. Looking for a Nissan vehicle? Check out our Dealer Locator to find the one that’s closest to you.

How to Test Drive a Car

Test driving a potential new or used car is critical. On both new and used cars it could expose impracticality like seats that don’t just fit you right or sight lines and a handling style that just aren’t to your liking. Testing driving a used car could be helpful for evaluating unforeseen mechanical issues. Make sure the test drive is thorough and reflects the challenges you face in your day-to-day driving environment.

Don’t assume that a vehicle will be available for test drive if you arrive at a car dealership unexpectedly. The sales staff may already be busy with customers, and it could take quite some time to get the vehicle to the front of the dealership. Set aside a day to test drive a few different models, and book it in advance at a time that’s likely to suit best. Early in the week or in the mornings is a good bet. Want to book a Nissan test drive online? You can even test out a new Nissan model across multiple days. Visit the Nissan Rental Car Program for more details.

The test drive can be a fun and exciting stage of the car buying process because you get to experience what it’s like to drive the car you really want. This bias could come back to hurt you, if you subconsciously decide not to take problems seriously during the journey. It’s a good idea to bring along your spouse, partner, friend or another person you trust. They can provide a more impartial voice as you experience the capability of the car for the first time. Don’t forget to bring along your driver’s license too, or it could be a wasted journey.

Once the test drive is organized, here are five things to watch out for:

Dimensions

If you intend to park the car in a private garage, beware of the size of the vehicle. This is a spec that’s often overlooked during online research, and the size can come as quite a surprise when you show up at the dealership. Get the exact car dimensions from the dealer and assess whether it will fit in your garage, or better yet, swing by your house as part of the test drive to test it out once and for all.

Mirror your daily driving conditions

If you tend to spend a lot of your time on the highway, then try and test the vehicle out in those conditions. This is why it’s important to set aside adequate time to test the car out. A five-minute journey through town in busy traffic won’t test the car out adequately for your lifestyle.

Check bodywork

Even if it’s a new car, take a close look at the bodywork to make sure there are no dings in the bodywork. Used cars could have tiny cracks in the windows which can quickly become a much bigger problem after purchase. Many bodywork scratches will make no difference to the performance of the car.

Is it child friendly?

If you’re driving the car, it stands to reason that you’re not the best person to judge if the rear seats are spacious. Bring along a child seat to see if it fits snugly in place, or you could also treat your child to the test drive too. Their blunt opinions could be exactly what you need to hear as you assess if the car is right for you.

Test Car Performance

Turn the radio off during the test drive and listen intently to the vehicle. Is the engine running smoothly? Are there any annoying squeaks or rattles during braking or cornering? If you hear anything out of the ordinary, then bring it up with the salesperson. Test the vehicle out at a variety of speeds within the speed limit too, so you know if it’s adequately capable of overtaking.

Dimensions

If you intend to park the car in a private garage, beware of the size of the vehicle. This is a spec that’s often overlooked during online research, and the size can come as quite a surprise when you show up at the dealership. Get the exact car dimensions from the dealer and assess whether it will fit in your garage, or better yet, swing by your house as part of the test drive to test it out once and for all.

Mirror your daily driving conditions

If you tend to spend a lot of your time on the highway, then try and test the vehicle out in those conditions. This is why it’s important to set aside adequate time to test the car out. A five-minute journey through town in busy traffic won’t test the car out adequately for your lifestyle.

Check bodywork

Even if it’s a new car, take a close look at the bodywork to make sure there are no dings in the bodywork. Used cars could have tiny cracks in the windows which can quickly become a much bigger problem after purchase. Many bodywork scratches will make no difference to the performance of the car.

Is it child friendly?

If you’re driving the car, it stands to reason that you’re not the best person to judge if the rear seats are spacious. Bring along a child seat to see if it fits snugly in place, or you could also treat your child to the test drive too. Their blunt opinions could be exactly what you need to hear as you assess if the car is right for you.

Test Car Performance

Turn the radio off during the test drive and listen intently to the vehicle. Is the engine running smoothly? Are there any annoying squeaks or rattles during braking or cornering? If you hear anything out of the ordinary, then bring it up with the salesperson. Test the vehicle out at a variety of speeds within the speed limit too, so you know if it’s adequately capable of overtaking.

Learn More
How to Test Drive a Car
STEP 5

Research Car Pricing

Doing your research and really understanding car pricing can help you when it is time to purchase your vehicle. Not only is it important to understand key car pricing terminology, but it’s also a great idea to look out for sales events and promotions, research offers and vehicle purchase programs you might be eligible for, as well as exploring potential tax deductions for new vehicles and business vehicles (for example the Section 179 tax deduction).

Understanding Car Pricing: Dealer Invoice and MSRP

When buying from a dealership, there are a few different prices that you may come across and understanding the difference between the dealer invoice price and MSRP is important in this process. Let’s take a detailed look at the differences between them.

What is Dealer Invoice Pricing?

The dealer invoice price represents what the dealership paid to get the vehicle on the lot. This could happen when the dealer buys the vehicle from another dealership, or when it takes in stock from the manufacturer. The dealer invoice is a detailed breakdown of the fees paid, and it could include advertising fees as well.

What is the MSRP (Sticker) Price?

MSRP stands for ‘Manufacturer’s Suggested Retail Price’ and this is the figure that you’ll normally see for models on dealer and manufacturer’s websites. You may also hear the term "sticker price", which refers to the MSRP displayed in the informative label, called the "Monroney label," affixed to the vehicle. The higher the demand for a vehicle, the more likely the dealer will stick to the MSRP.

MSRP vs Invoice Price

The final price of a vehicle generally takes place in the gap between the MSRP and the invoice price. Realistically, the gap is much narrower than most people assume. Look out for any additional promotions taking place with the dealership.

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Best Time to Buy a Car
STEP 6

Trade in your Old Car

Buying a new or used vehicle can involve so much homework that it’s easy to forget the value of what you already have parked outside. The value of your existing vehicle, if you have one, depends on age, mileage, and its general mechanical condition. If it’s in good shape, then it can shave off a significant portion of your financing needs for your desired new vehicle. Getting good value for your trade-in car can be tricky however, so let’s take a closer look at the topic.

How to Trade in a Car

Trading in a car when it’s fully paid off is a pretty straightforward process, which only requires negotiation about its value with the dealership/seller who’s taking it off your hands. When the loan on the car is still partially unpaid, there are a few more things to consider however, so let’s take a closer look at how you can get the best value for your trade-in vehicle.

How much is my car worth?

Like many other parts of the car selling process, trading in your existing vehicle is about research. The more you know, the better your bargaining position when you’re in the dealership. Visit Nissan’s Get Trade-In Value third party tool to input your vehicle’s details and get an estimate on what you can expect. Other websites, such as Kelley Blue Book, can also provide estimates on private party resale value if you decide you want to sell the vehicle separately rather than trade-in. Check out ads for the same vehicle in the locality too, so you can gauge their resale value.

Prepare to trade in your car

Before having discussions with a dealership about your trade-in car, make sure you know about its financing situation if there is still some part of a loan outstanding on it. Negative equity is when the value of the loan repayments exceeds the value of the vehicle. This can leave you ‘upside down’ on your car loan. You’ll need to speak with your financial institution about how to pay off this negative equity or discuss with the dealership about how this can be factored into the trade-in value/cost of your new vehicle. If you’re in a position where you have positive equity (the vehicle value exceeds the outstanding loan repayments), then you may be presented with a better trade-in deal.

How much is my car worth?

Like many other parts of the car selling process, trading in your existing vehicle is about research. The more you know, the better your bargaining position when you’re in the dealership. Visit Nissan’s Get Trade-In Value third party tool to input your vehicle’s details and get an estimate on what you can expect. Other websites, such as Kelley Blue Book, can also provide estimates on private party resale value if you decide you want to sell the vehicle separately rather than trade-in. Check out ads for the same vehicle in the locality too, so you can gauge their resale value.

Prepare to trade in your car

Before having discussions with a dealership about your trade-in car, make sure you know about its financing situation if there is still some part of a loan outstanding on it. Negative equity is when the value of the loan repayments exceeds the value of the vehicle. This can leave you ‘upside down’ on your car loan. You’ll need to speak with your financial institution about how to pay off this negative equity or discuss with the dealership about how this can be factored into the trade-in value/cost of your new vehicle. If you’re in a position where you have positive equity (the vehicle value exceeds the outstanding loan repayments), then you may be presented with a better trade-in deal.

Get trade-in quotes

Just like visiting multiple dealers when buying a new or used vehicle, take the time to get multiple quotes on the trade-in value of your vehicle. If one dealer is prepared to offer much more for your trade-in, it might dictate which dealership is best value to buy from. For example, a Nissan dealership is more likely to offer a better deal for a trade-in Nissan than competitors. Try and avoid making the trade-in vehicle a key part of discussions too early.

Close the deal

The trade-in value is negotiable so don’t assume that the first price you get from a dealer is final. Make a counteroffer based on your prior research and be prepared to walk away if you can find a better deal elsewhere. Once you’ve found the right deal, then you’ll need to confirm the sale details with the dealership and finalize a financing plan with your bank. Put yourself in an even stronger position by learning How to Get Pre-Approved for a Car Loan.

Get trade-in quotes

Just like visiting multiple dealers when buying a new or used vehicle, take the time to get multiple quotes on the trade-in value of your vehicle. If one dealer is prepared to offer much more for your trade-in, it might dictate which dealership is best value to buy from. For example, a Nissan dealership is more likely to offer a better deal for a trade-in Nissan than competitors. Try and avoid making the trade-in vehicle a key part of discussions too early.

Close the deal

The trade-in value is negotiable so don’t assume that the first price you get from a dealer is final. Make a counteroffer based on your prior research and be prepared to walk away if you can find a better deal elsewhere. Once you’ve found the right deal, then you’ll need to confirm the sale details with the dealership and finalize a financing plan with your bank. Put yourself in an even stronger position by learning How to Get Pre-Approved for a Car Loan.

Alternatives to trading in

During your research, it’s likely you’ll find that the estimated trade-in value is lower than the estimate for selling the car privately. The downside of going down this road is that it can be a lot more time consuming. Selling the car privately will involve posting ads, meeting prospective buyers, verifying the seller’s financing capabilities before eventually closing the deal. You could also end up selling the car before your new car is available, or you could end up with two cars outside your house if you’re struggling to sell the first one privately. If you have the time to sell privately, you have more control over the selling price, but trading the vehicle into a dealership is a more efficient process.

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STEP 7

Close the Deal

Before closing the deal, you should already have sought out multiple quotes on car insurance plans. Don’t be surprised if you receive a higher quote than you are currently paying. A new vehicle is not only new but might be "more" vehicle and so the replacement value is higher.

Once you’re ready to commit to a car and the associated financing plan, you’ll be then introduced to the finance office at the dealership where you’ll be asked to sign the paperwork. Take a close look to make sure that the payment plan is exactly what you thought was agreed and note any potential additional fees. This could include the state sales tax or a documentation fee. You may also have the option of having the car delivered to your home, where you can fill out the appropriate paperwork from the comfort of your own home.

As part of this process, additional extras may be offered including service contracts or accessories for the vehicle. If you’ve bought a new car, it’s likely that a warranty is already included in the deal but it might be a good option for you to pay for additional coverage or service contracts the dealer may offer if you’re buying a used vehicle. Just take a close look at what’s being offered and assess whether it makes long term financial sense. It can provide additional peace of mind in case things go wrong. When it comes to accessories, make sure that they are from the OEM (Original Equipment Manufacturer), or else they may not fit the vehicle properly.

How To Buy a Used Car Guide

How to Buy a Used Car

Buying a used car is likely to require a bit more homework, but it could end up saving you a bundle of cash compared to a brand-new vehicle. When you’re dealing with previously owned cars and private sellers, you’ll face a unique set of challenges compared to buying ‘new’ however. Let’s explore these issues in closer detail to help you find a great used car at a low price.

Whatever type of car you’re interested in, it’s likely that you can find it in abundant supply on the used car market. You might not be able to find it with the specific color, drivetrain, transmission or trim level you desire, however. If you’re flexible with some of these factors though, you could end up finding a great used vehicle with low mileage at a much-reduced cost than a new version. There are many unique considerations you need to delve into so here are some tips for buying a used car.

Setting a budget

Most analyses suggest that customers should only budget about 10-15 percent of their monthly net income (after tax) on car repayments. For used cars, given the lower overall cost, you really shouldn't be exceeding that estimate. Bear in mind that you also need to factor in insurance and general running costs on a monthly basis. An increased apprehension about reliability is the primary reason why some people choose to avoid used vehicles. You may end up paying more money getting the vehicle fixed at the mechanic, and unless you buy Certified Pre-Owned, it’s unlikely that you’ll find a used vehicle with a worthwhile warranty offering.

Where to look

As mentioned above, Certified Pre-Owned vehicles are an increasingly popular middle ground for customers who want a car with a smaller price tag, but also increased assurance about its reliability. Our team at Nissan has given these vehicles the mechanical seal of approval and makes them available with a range of certified benefits including emergency roadside assistance and towing coverage. Otherwise, you can check out the websites of individual dealerships, most of which have a comprehensive inventory list of their available used vehicles. Locate your closest Nissan dealer. Sites like AutoTrader and AutoList contain vehicles from a broad range of dealerships, while the likes of Craigslist are popular among private sellers. Be particularly wary when buying privately however, because you might not have any recourse if something goes wrong minutes after paying for it.

How to price cars

This is a unique challenge for used car buyers because there could be thousands of dollars in the difference between almost identical cars in two different locations. This may be down to mileage, engine size or any other number of issues, but it could also be a big opportunity for you to haggle the price down. Kelley Blue Book is a great resource to help you decide whether it’s a good deal. You can simply input the details of the car you’re interested in, and they will provide its market value based on a number of factors. You may also be able to access the ‘Dealer Retail’ price which is what you should expect at the dealership, while the ‘Private Party’ price refers to the likely lower cost of buying from a private seller.

Checking vehicle history

AutoCheck and CarFax will be able to provide you with a comprehensive vehicle history report, which can clarify some of the claims put forward by the seller about the overall reliability of the vehicle. This report should include details of instances where it was involved in a serious accident and subsequently declared a ‘total loss’. It will also outline the number of previous drivers and a mileage log at those ownership changes. Pay close attention to these figures as some unscrupulous sellers may have had their mileage reduced on the odometer to increase the resale value. It may not contain a full list of the mechanical work that has been carried out however, so beware that it won’t have all the information you need.

Meeting the seller

Once you find a vehicle you like, then keep you cards close to your chest. You don’t want the seller to know that you’re deeply attached to getting the car, or else you’ll lose your bargaining power. Organize to view the car during daylight hours and take a thorough look at the bodywork for any unusual dents or marks. Ensure the veracity of the claims made in the online ad, such as its engine size, transmission or drivetrain. If you like what you hear, then you should take it for a test drive in a variety of typical road conditions. Click here for a full breakdown on How to Test Drive a Car.

Financing & closing the deal

To ensure peace of mind, it’s important that you insist an independent mechanic takes a look at the vehicle. This person can assess whether there are any mechanical issues which the seller declined to mention. Once you’re happy, then you can move onto the used car price. Concentrate on the overall cost of the vehicle, rather than the cost of repayments and don’t factor in the trade-in value of your existing car until towards the end of this process (if applicable). Use your earlier research into the market value of the vehicle and avoid the temptation to make a very low initial offer, as this may signal to the seller that you’re not a serious buyer. View information on how to finance the car.

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First Time Car Buyer Guide

First-Time Car Buyer's Guide

Buying a car for the first time involves a lot of learning on the fly. Not only do you need to find the right car, you must also develop the knowledge of where to look and the confidence to drive a good deal with the seller. Remember throughout this process, that at the end of it all you’ll have a beautiful car to call your own. As a first-time car buyer, there are a few unique factors to consider especially when it comes to vehicle selection, costs and financing. Let’s take a closer look at how to buy your first car.

Whether you’re a first-time car buyer or looking to upgrade your current vehicle, a lot of the advice remains consistent. Check out these links for help with learning about car types, setting a budget, buying new vs used, whether to buy or lease, and how to test drive a car. This information will develop your knowledge of the latest car technology, and help you decide what type of car you need for your everyday motoring experience.

It’s normal to be apprehensive when buying a car for the first time, but it can be manageable. There are a few things to look out for, so let us help you along the way.

Budget and Financing

Used cars are a good option for first time car buyers, allowing inexperienced drivers the opportunity to get behind the wheel for a relatively low price. Your budget will likely be limited because you don’t have a current vehicle to trade in, but there are still a lot of great options in the used car market with reliability and impressive performance. Certified Pre-Owned vehicles can offer first time buyers additional peace of mind, with a range of certified benefits and the protection of limited warranty coverage, something you won’t get with most used cars. Try and secure a pre-approved loan before committing to a vehicle by building a good credit score. Learn more about the Credit Score Needed to Buy a Car, How to Get Pre-Approved for a Car Loan and the options for Buying a Car with Bad Credit.

Insurance Costs

One of the more frustrating aspects about the early years of driving is building experience. Insurance companies reward safe motorists by offering a ‘No Claims Bonus’ discount on their premiums, which increases in value year-on-year. Of course, new drivers can’t initially avail of this discount so don’t be surprised if you struggle to get the same kind of value as a friend with a few years of driving experience behind them. Premiums are also often higher for modified vehicles, or those with big, powerful engines. Beware of perceived bargain deals, because you could end up paying a whole lot more in insurance premiums as time goes by.

Buy from reputable sellers

The more experienced you become in buying cars, the more you will notice when an ad is too good to be true. Buying a cheap vehicle can quickly turn into a nightmare through increased maintenance costs, so treat private sellers with caution. Dealerships have staff with years of experience in the motoring industry, and they can help you get accustomed to motoring lingo, and recommend vehicles based on your wants and needs. Most dealerships have an extensive range of used vehicles available and publish their full inventory online. Find your nearest Nissan dealer.

Learn to negotiate

Some people thrive in negotiations, but many others hate the thought of haggling a price down, especially if they’re already inexperienced in car buying. Aside from reading up on the psychology of negotiation, the best thing you can do is have a full arsenal of information to throw at the seller when you’re discussing price. Visit Kelley Blue Book to find the market price of the vehicle you’re interested in, and assess how the price compares to other ads for the same vehicle. The seller could quickly drop their valuation if they realize you have other options available.

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Lease Buyout Guide

Lease Buyout Guide

It’s easy to develop an attachment to your vehicle if it’s been very effective for multiple years in getting the kids to school safely, or helped you explore unique environments in your spare time. So, what happens when your lease term expires? Most agreements allow for what’s called a ‘lease buyout’, which means you can buy it from the leasing company and avoid a lengthy search for a new vehicle. There are also many disadvantages to this scenario however, so let’s take a closer look.

How does a lease buyout work?

When you sign a leasing agreement, the vehicle has a set ‘residual value’ which refers to the cost of the vehicle once the agreed term expires. This is the price at which the vehicle can be bought at the end of the lease, and there is usually little room for negotiation. Similar to the purchase of a normal new or used car, you must then organize financing through a financial institution or the dealership. Beware however that you may still have to settle leasing fees, such as wear-and-tear charges.

What is an early lease buyout?

This is when you wish to buy the vehicle before the leasing term expires. You may have already decided that this is a car you’d love to keep for many more years, so you can then instigate an early lease buyout. This may not be as straightforward as you hope however, so beware of a few things. You may be required to pay an early lease termination and a higher residual value than what’s stated on the leasing agreement. Loan repayments to purchase a car are also often higher than leasing payments and this will be starting at an earlier stage if you buyout the loan. However, these higher repayments will be going towards something you will eventually own.

When should I buy my leased car?

Buy a car with your head rather than your heart. You may love driving your leased vehicle, but it doesn’t always represent the best value for money. The car’s residual value, as stated on the leasing agreement, is what you’re likely going to have to pay for it. Check out your vehicle’s market value on Kelley Blue Book to see how your current leased vehicle stacks up. The likelihood is that the residual value will be slightly higher than the market value, but there are some advantages to buying out your own vehicle. You know its mechanical history because you’ve been driving it, so you’re taking a lot less of a risk than with another used vehicle. Leased vehicles also tend to have lower mileage, making them better value. If the vehicle is reliable, suits your needs, and comes with relatively low buyout charges, then it could be the best option.

How to get a lease buyout loan?

A lease buyout loan is a distinct financing option offered by many financial institutions. Discuss your interest in a lease buyout with the leasing company first to ensure that it’s possible within your agreement and so they can highlight the potential costs of doing so. Try to secure preapproval for your lease buyout before agreeing to the final terms with the leasing company. This will give the leasing company additional assurance about your financing capabilities and you may end up getting a better deal. Shop around for the best loan deals and expect the interest rates to be similar to those for typical financing of a used car. Let Nissan help you with the pre-approval application process.

What credit score is needed to lease a car?

The credit score needed to lease a car and buy a used car can differ slightly. If your credit score is below 680, then leasing a vehicle can become a bit more challenging. You will still find many opportunities, but the choice of vehicles may become more limited and you’ll likely need to lay down more money up-front. You may have an easier time buying a used car if your credit score is slightly lower. This could make a lease buyout a more cost-effective option in the long run. Estimate your Credit Score.

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Closing a Car Deal