Step 2: Develop your budget. Don't budge from it!

You can now start to realize your actual budget and look only at vehicles that are in your budget.
Newlyweds think ahead, you may be financing for 3-4 years, so a 2 door coupe may not be practical. If the type of new vehicle you need is out of your budget, then you should consider a good used vehicle.

Shoppers with bad credit should expect to pay a higher interest rate than good credit shoppers. Buying a car is a great way to rebuild your credit. If you need credit help, don't worry. Many dealers offer second chance financing as long as you have some down money and a job. Do not be bullied into buying from a second chance dealer because most Dealers now offer it, and you need to shop around for the best interest rates and quality used vehicles.
If you don't know your credit history when you go to buy a car, don't be surprised if your interest rate is higher than it should be. My adviice is to look at some of the online lenders that offer bad credit auto loans

Some Dealers will lie to you and tell you your credit score is lower than it is. You absolutely should run your own credit and print out the score before you start to shop.
Click here and Know your credit before you go to the Dealer

Know your Payment and Price Range before you hit the streets. Don't let a salesperson tell you what you can afford. Click here for an easy to use Monthly Payment Calculator. If you want to know what the current loan rates are, just contact your bank or credit union and ask. Know ahead of time what the loan rates are and remember, your credit rating will also effect the loan rate.

Example of a simple loan computation:

Loan amount $20,000

Interest rate 8%

Length of loan 48 months

Payment would be $488.25

To compare interest rates on car loans with different banks in your area click here Do not assume your bank or the dealer is giving you the best interest rate available.
You should check all of your credit cards and pay them down or off before going for financing. Just because you think you can afford the payment, doesn't guarantee the lender will agree.

Car Loan Amount* Monthly Payment Range*
$10,000 $240-275
$13,000 $310-350
$15,000 $360-410
$20,000 $480-550

* The table above is just a guideline to help you get an idea of your price range. When your car loan is approved, the lender will set the interest rate based on your credit history and other factors including how much you can afford to pay each month. Click here for the best online Lenders.

Remember to factor in your insurance payment, because rates will vary depending on the type of vehicle you are buying. Click here and get direct car insurance quotes. This will allow you to factor it into the overall monthly payment.

You know what you can afford! Don't let a fast talking salesperson talk you higher. If it is out of your budget look at something else. DO NOT stretch your loan out to 6-8 years to fit into your monthly payment. You will regret that decision when it comes time to get another car and you still owe big dollars on it! Some of the best deal are on slightly used cars so explore all your options. For more info visit my website Car Buying Help Online.

Step One: What type of car do you need?

What type of car do you need?
Determine what types of cars or trucks, vans, suvs you are interested in.A few questions you must answer are: New or used, minivan, car, pick up, SUV? Do you want a new vehicle or will you settle for used if you can get a better vehicle? Keep all of your options open. Make a list of why you need a particular type or style. You will probably own this vehicle for at least 2-4 years, so think ahead.

A couple of items to consider;
How many miles per year do you estimate you will put on your vehicle? If you put lots of miles on the vehicle, you must be prepared to replace the vehicle sooner than a person that hardly drives. I remember a person that had a 6 year contract and by the third year had already put 175,000 miles on it and it was ready for replacement.

Who will I be transporting around? Children, pets, co-workers,in-laws with long legs?

GAS MILEAGE, the price of gas is high and don't expect it to go down any time soon. Do a weekly cost estimate based on the current per gallon rates and the projected mileage the vehicle should get.

Be realistic. If you can't afford it, don't buy it! A good salesperson will work the numbers hard to make the deal fly, but you may end up with a 5-6+ year contract to pay off. You are buying a car not a house, so 3-4 years later when you are ready for another vehicle you will still owe 2 more years on your 4 year old vehicle. Scary thought, isn't it? If you can't make the deal work with 4 years or less you may want to look at less expensive new vehicle or a slightly used vehicle with low miles.

Make a list of the types, makes and models you are interested in. To get the invoice prices on new vehicles or book values on used, we recommend the Kelley Blue Book site. Keep in mind that the supply and demand of vehicles will affect what you will actually pay at the dealership. Some hard to find or newly released vehicles will sell for sticker and in some cases above! If you are not sure about the exact vehicle you want, go to your local dealers and test drive the vehicle(s). Take good notes and narrow down your choices.