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An Auto Adventure

A car-buying guide

Part 15 | Reading Time: 7 minutes
By Ian Bin
Buying a car is often seen as a complex and overwhelming process, but it doesn’t have to be. With the proper guidance and preparation, it can be a manageable and even rewarding experience. The following information aims to demystify the car buying process, providing practical steps and advice to help you make an informed decision.
From understanding your budget to doing thorough research that may help you in your negotiations, these guidelines are designed to equip you with the knowledge and confidence you need. Remember, buying a car is not just about acquiring a new set of wheels; it’s about making a wise investment that fits your lifestyle and financial situation. Let’s embark on this journey together, turning an intimidating task into an empowering experience.

Starting Your Research and Preparation

As you begin your research, make a list of your top priorities for your car:

Type of vehicle: 

This refers to the vehicle category you are interested in. It could be a sedan, SUV, truck, sports car, or van. Your choice depends on your needs, lifestyle, and preferences.


This refers to the manufacturer or brand of the vehicle. This includes Ford, Toyota, BMW, Mercedes, etc. Each make has its reputation for quality, reliability, and performance.


This is a specific type of vehicle by a manufacturer. For example, a Honda Civic or the Subaru Impreza. Each model has its own set of features and specifications.


These are the specific characteristics or capabilities of the vehicle, which can include safety features (like anti-lock brakes or airbags), technology features (like a navigation system or Bluetooth connectivity), and comfort features (like heated seats or a sunroof).
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This refers to the number of miles a vehicle has driven. A lower mileage indicates a less-used car, which could mean less wear and tear.
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Age of car:

This refers to the year the vehicle was manufactured. Older cars may have more mileage and wear and tear but are often cheaper. Newer cars may have more advanced features and lower mileage.
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Additional features or options can enhance the vehicle’s performance, comfort, or appearance. They can include the car’s color, the engine’s size (which can affect power and fuel efficiency), and luxury options like leather seats, premium sound systems, or advanced safety features.
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New or used:

Making the choice, you must decide whether you want to buy a new or used car. Buying new means, you can get it the way you want, with less history behind it, better safety, better technology, a new warranty, better fuel efficiency, and maintenance included. On the other hand, buying used is less expensive; insurance costs less on average, you can still get a warranty, and parts may cost less.

Choosing a vehicle can be a daunting task. Many websites list a lot of used cars, like or If you are looking for a used car, a search on Craigslist and Facebook Marketplace can also be helpful. 

Understanding the True Cost of the Vehicle

When planning to buy a vehicle, it’s crucial to understand that the sticker price is just the beginning. The actual cost of owning a car involves several other factors that can significantly increase your spending. Here’s a breakdown:


This is the amount you pay for the vehicle, whether up front or financed over time.


Depending on your state, you may have to pay sales tax, use tax, or other local taxes. These can add a significant amount to the total cost.

Registration fees: 

These are fees paid to the state for registering the vehicle license plates and yearly renewals.


The cost of fuel can vary greatly depending on the type of vehicle’s fuel efficiency and the current price of gas or electricity.
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The cost of insuring your vehicle depends on many factors, including the type of vehicle, driving record, and where you live.
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Regular maintenance such as oil changes, tire rotations, and brake inspections are necessary to keep the vehicle running smoothly. Unexpected repairs can also add to this cost.
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Tax credits: 

Some vehicles, such as electric cars or hybrids, may qualify for federal or state tax credits, which can help offset some of the purchase price.1
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Vehicle service contract:

Also known as an extended warranty, this additional cost covers repairs and maintenance after the manufacturer’s warranty expires.

Ways to Pay for Your Vehicle

People typically set aside money on a monthly basis to pay for a vehicle, whether saving to buy it in one payment or obtaining a loan. When buying a car, a dealer will ask how much you can afford so that they know what to offer you. When starting, it’s important to remember that your total monthly car payments should be at most 20% of your take-home pay.2
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There are several sources for financing a vehicle. Many car buyers finance their purchases through the car dealer who has access to loans offered by finance companies, banks, and savings and loans.3 Another option is borrowing from a financial institution, whether physical or online. Before filling out a loan application, check and compare loan rates at different banks or credit unions to find the best option.4
Another option to consider is leasing. Leasing is like renting a vehicle for a certain period. You agree to make regular payments, maintain it, and buy insurance. At the end of the lease, you return the vehicle. Vehicle leases even give you the option of purchasing the car at the end of the lease.5

Negotiating for Your Best Deal

For many people, negotiating can be a pain. Here are some things to know about negotiating:

Do your research:

Know the car’s market value you’re interested in. Use online resources to understand the average price for the make, model, and year. The Kelley Blue Book lists wholesale and retail vehicle prices to see the average cost of cars you are interested in. The wholesale price is what the dealer initially paid for it. The retail price is what the dealer charges you. Use Kelley Blue Book as a benchmark for comparing dealer prices, ensuring you don’t over pay, and providing leverage during negotiations. Understanding the MSRP can help you secure a fair deal.

Be patient:

Take your time buying a car. Shop around and compare prices between different dealerships and don’t be afraid to talk to multiple sales representatives.

Test drive the car:

Always test drive the car before buying. This can help you identify any issues and give you more leverage during negotiations.

Inspect the car: 

Consider having the car inspected by a trusted mechanic. If there are any issues, you can use this as a bargaining tool. For used cars, ask for the VIN. VIN is a unique code used to identify individual motor vehicles.6 You can usually find it on the driver’s side dashboard or inside the door. Several online services provide vehicle history reports, such as Carfax.
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Be ready to walk away:

If the dealer isn’t meeting you at a price that feels right, feel free to take a step back. Remember, there’s a whole world of other dealers and cars waiting for you.

You will get the sales contract once you have agreed on a price. This contract will list additional costs such as sales tax, documents, and service fees.

Finalizing the Purchase

Now, let’s delve into what it means to “make sure the numbers on your paperwork all match up” when finalizing a vehicle purchase.
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Price of the vehicle:

This is the agreed-upon cost of the car itself. Ensure that the price on your paperwork matches the price you negotiated with the seller or dealership.

Down payment:

This is the amount of money you put down up front. Confirm that this number matches your expectations and agreements.

Financing terms:

If you’re financing the vehicle, ensure the interest rate, the length of the loan, and the amount financed match what you’ve discussed with the lender.

Fees and taxes: 

These additional costs can include sales tax, registration fees, documentation fees, and any other charges. Make sure these are all clearly listed and match what you were told.
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Extras and add-ons: 

If you’ve agreed to any additional features or services, like an extended warranty or paint protection, make sure these are listed correctly and that the costs match what you were quoted.
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Total cost: 

This is the total amount you will pay for the vehicle, including the price, fees, and financing charges. Make sure this matches your understanding.

By ensuring all these numbers match up, you can avoid surprises or misunderstandings and confirm a smooth vehicle purchase. It would help if you left with the car title and a signed copy of the bill of sale.

Need a Little Extra Help?

Does the process of buying a car seem daunting to you? Don’t worry, we’ve got you covered. Consider using the 3Nickels app for some additional assistance. The car module serves as a comprehensive guide, simplifying your car buying journey every step of the way.

Some of the tools include:

Car-buying checklist
Should I finance or pay cash for my car?
How much car can I afford?
Most popular cars
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Wrap Up

Buying a car is a significant decision, but it doesn’t have to be overwhelming. The key is to approach it methodically and armed with the correct information. The steps outlined in the above article are designed to guide you through the process, making it less daunting and more manageable.
By understanding your budget, doing thorough research, and being prepared to negotiate, you can confidently navigate the car-buying journey. Remember, it’s not just about getting a set of wheels; it’s about making a wise investment that suits your lifestyle and financial situation. With the proper preparation and mindset, buying a car can be a rewarding experience rather than an overwhelming one.


1 Parys, Sabrina. “Ev Tax Credit 2023: How It Works, What Qualifies.” NerdWallet, Accessed 9 Oct. 2023.
2 Turnley, Sara. “Preparing to Buy a Vehicle.”  Financial Fitness Group, Accessed 9 Oct. 2023.
3 Kagan, Julia. “Dealer Financing: What It Is, How It Works.”  Investopedia, Accessed 9 Oct. 2023.
4 Zinn, Dori. “Banks vs. Credit Unions: Which Is Best for Taking out a Personal Loan?”  Investopedia, Accessed 9 Oct. 2023.
5 Rivelli, Elizabeth. “How to Buyout Your Car Lease”  Car and Driver, Accessed 9 Oct. 2023.
6 “What Is a Vehicle Identification Number (VIN)?”  Autocheck.Com, Forbes Magazine, 22 Aug. 2023, Accessed 9 Oct. 2023.

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