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Step 1
Create a family budget. You should know how much money you have coming in every month and how much of that is obligated to other expenses.
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Step 2
Check your credit. The better your credit is, the better rate you'll get on an auto loan. If there are problems with your credit, it's worth the time to fix it before you buy a new car.
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Step 3
Determine how much you can afford. Experts say that the monthly cost of your vehicles, including car payment, maintenance, gas and insurance, should be no more than 20% of your monthly take home pay. And this includes all of your vehicles, not just the new one.
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Step 4
Save for a down payment. This will greatly decrease the amount you would eventually pay for a car. And it will let lenders know you're serious about paying out the loan.
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Step 5
Figure out the value of your trade in. This is good to do before you get on the lot, because some salesmen calculate this wrong.
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Step 6
Look at lease options. Sometimes, these offer great monthly rates that might better fit in your budget. It's worth considering before you finalize your decision.
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Step 7
Calculate the total price of the vehicle. Salesmen can almost always make a car fit your monthly budget by extending the length of the loan. But if you're not careful, you could end up paying significantly more over the life of the loan than the vehicle is worth.
