Steps in the car$-$buying process

Steps in the Car$-$Buying Process

For many of us$,$ purchasing a car is the first major purchase that we will make, as well as the second$-$largest purchase, and the most frequent major expenditure that we will make during our lifetimes. In contrast, purchasing a house is usually our largest, or most valuable, major purchase, but most of us will buy many more cars than houses during our lifetimes.

Due to their high costs and the fact that the majority, if not all, of these purchases are made on credit, mistakes made during these transactions can be extremely expensive and their effects felt for many years. Using a systematic process to evaluate these purchases helps reduce the potential of costly mistakes.

The car$-$buying process can be broken down into four major steps: research, select, buy, and maintain.

Read each of the four activities and put them in their proper sequence. Be advised that the action listed is not the only action needed in that step. Other activities may be included in each step.

Step

Activities

Determine how expensive a car you can afford.

Change the oil, rotate the tires, and replace the windshield wipers as needed.

Calculate your target price based on the dealer's cost for the vehicle and its options, as well as the dealer's profit markup minus any rebates and incentives.

Close the deal$-$but only after looking at all costs, including the cost of the vehicle and all purchase$-$related costs, such as sales tax and fees.