If you're looking to buy a used car, here's our step-by-step guide that will walk you through the process. We are your one stop shop for all of your pre-owned vehicle needs!

How Much Can You Afford?

In order to find out how much you can afford, lenders will want to know your gross monthly income and your existing monthly debts. Let’s work backwards a little bit. We already know that you have a budget of $4,000 per month for maintenance and transportation costs. So, let’s figure out what the maximum you can afford for a payment would be. To figure out the payment, we’ll take your monthly income and divide it by how much you can afford to pay each month in total debt. In this case, that's $4,000 divided by $550 or, roughly 8% of your income. This will allow you to make an affordable monthly payment for your transportation costs.

Find the Right Car

There are a lot of cars on the market today, which can make it difficult to figure out what type of vehicle is right for you. There are some factors that will help narrow down your choices. For example, if you have a family or travel frequently with friends, you’re going to want a bigger car. If you live in an urban area and tend not to travel too far from home, then something smaller might be more suitable. Here’s our list of steps that will help you find the right car:

- Determine how many passengers you need to seat.

- Figure out your average annual mileage.

- Think about the car’s style, size, color and brand.

- Consider what types of special features are important to you.

- Make a pros/cons list for each candidate that fits your budget.

The Law of Supply & Demand

Once you have decided on a few candidates in your price range, it’s time to do some research. The first thing you want to figure out is how much of an inventory there is on the market for that make and model. If there are a lot of the same type of car on the road, then buyers will have more bargaining power with sellers. This means that prices will tend to be lower and there will be more opportunity for negotiation. This is the law of supply and demand: The more there is of something, the less it’s worth.Get Pre-Approved

When you find a car that has everything you are looking for, it’s time to go to the bank! We only work with quality lenders that can help you find the best rates for your budget. Once you tell them what kind of car you are looking to buy, they will be able to give you a few different payment options so that you know how much each one will cost before negotiating with the seller.

Research Costs & Fees

Now it’s time to figure out how much the car you are looking to buy will cost in taxes, licensing fees and other costs. The standard rate is around 13% on average for most states. This will vary by county and state, so do your research! If you’re not sure where to start, our friends at DMV.org can help with that!

Negotiate the Best Price for Your Budget

The final step is to negotiate with the owner and find out how much they are willing to sell it for. Keep in mind that you should never offer your maximum budget! Instead, make an offer slightly below what you were actually hoping to pay and express that you would like to leave a little room for negotiation. If they say no, move on to your next candidate and try again! If they say yes, then it’s time to sign the papers and get your first look at your new ride!

Don't have enough money to buy a car or just can't decide which one you should buy? Check out our blog article Buying A Car With Bad Credit for various options to make it happen!

- Be careful of any loan fees (such as titles, registration, etc.) that will tack on extra costs.

- The interest rate should be no more than an 8% APR. Anything higher is asking for trouble.

- Ask the lender if they have a "hassle-free" guarantee. This guarantees that they will work with you if you have any problems.

- Negotiate the price of the vehicle before signing anything so there are no surprises.

Final Tips

When it comes to financing your car, do your research up front and be smart about it! Take extra care to avoid any additional fees that may cut into your monthly budget. Remember to keep an open mind about financing options, even if the seller pressures you into taking "their" loan. Play it smart...you’ll be glad you did!

For more information on how to buy a car check out https://www.youtube.com/watch?v=j3SfvfnLsEg