How to buy a new car

When buying a new car, start by researching the cars you're interested in and setting your budget. Then compare multiple dealers and cars. Negotiating is commonplace when buying a car; test the waters to see where you'll get the best price. And once you decide on a car, don't feel pressured to purchase dealer add-ons immediately — you can typically say no and get them later if you change your mind.

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What are the benefits of buying a new car?

Each has its benefits, and here's why you might decide to go with buying a new car over a used car:

The car has never been driven (outside of transport and test drives), so there shouldn't be any underlying usage-based mechanical issues. To be safe, find out what to do if you buy a lemon.
New cars have the most current safety and comfort features.
A new car is entirely customizable. If you don't like the color options you see on the lot, the dealership can order one in the color your prefer. You can also request the version of the vehicle that has your desired features, like a moonroof or dashboard navigation system.
Manufacturer car warranties typically last for two to three years or 36,000 miles, whichever the car reaches first. Buying a used car often means the manufacturer's warranty is already expired.

Pro tip:

Learn some car dealer lingo before buying a new car: the manufacturer's suggested retail price (MSRP), annual percentage rate, the interest rate on a car loan, and the Monroney sticker on a car's windshield, which states the asking price and is your negotiation starting point.

How to buy a new car from the dealership

When buying a new car from a dealership, follow these steps to help make sure you're happy with your new vehicle and what you pay for it:

Do your research. Have an idea of what you're looking for before you visit a dealer. Researching car make and models ahead of time can help you feel more informed and reduce any feelings of being overwhelmed when you're presented with options at the dealership.
Set your maximum budget. Know exactly what you can afford before looking at cars. If you'll be financing, consider getting pre-approved for a car loan from a bank or lender. Pre-approval helps you know what you can afford, and it can allow you to act faster if you find the perfect car. You can also time your shopping around seasonal sales and low- or no-interest financing promos; these are common toward the end of the year as well as around Memorial Day and other holidays.
Visit multiple dealerships. Each dealership may have different prices and car models. Some may be more willing to negotiate than others, so even if you find a great car at the first dealership, shop around at a few others before you commit. You can even do your car shopping online, including trading in your old vehicle, with Progressive Car Shopping services.
Test drive several cars. Test drive each car you're considering to see how they feel on the road. Keep an open mind — even if you have your heart set on a specific model, test drive other cars to compare. You might find one that drives better than the car you were originally considering. Test driving a car can also give you a better idea of which new features are must-haves for you. Chat with the salespeople if you can't find exactly what you're looking for on the lot. They can often order cars in different colors or with the features you want.
Decide what to do with your old car. If you're getting rid of an old car to buy a new one, you have a couple options. You could trade in your car online or at the dealership and put that trade-in amount toward your new car. If you don't mind putting in a bit more work, you may be able to get more money by selling your used car yourself. Learn more about how to safely sell your car and how to sell your car online.
Prepare to negotiate. Dealerships expect you to negotiate for a price lower than the sticker. Find some recent sources to determine a fair price for the make and model you want to buy. Ask the salesperson to provide you with an itemized list of all their fees to ensure they're not overcharging you elsewhere to compensate for your negotiated price.

Remember, you're the one buying the car, so you're in control. If a dealership is unwilling to negotiate or a pushy salesperson makes you feel uncomfortable, don't be afraid to take your business elsewhere. Learn how to negotiate the best deal at car dealerships. Learn how to negotiate the best deal at car dealerships.
Consider which dealer add-ons you need. Once you decide to purchase, it's standard for dealers to try to upsell you add-on products like extended warranties. Don't feel pressured to buy add-ons on the spot. If you decide later on that it's something you want, you can typically still purchase it. You may even be able to purchase certain add-ons like gap insurance and mechanical breakdown insurance through your insurance company instead.