Your 10-Step Guide on How to Buy a Car from a Dealership

Looking to learn how to buy a car from a dealership? This step-by-step guide will help you navigate the process efficiently. Buying a car from a dealership is a great move because you can do everything in one place, with our sales advisors helping you from vehicle selection to meeting our financing department.

From setting your budget and checking your credit score to test driving and negotiating the best deal, we’ll cover all the necessary steps to make your car buying experience smooth and successful.

Step-By-Step Guide on How to Buy from a Dealership

• Establish your budget using the 20/4/10 rule and consider all car-related expenses, including hidden costs like sales tax and dealership fees.
• 10% to 15% rule advises that your annual income should guide your spending on all car-related expenses including insurance, taxes, and maintenance. But there’s some debate on whether shoppers should exceed this possible budgetary advice.
• Using online calculators can be a lifesaver, helping you estimate those important numbers, like your monthly payment and the benefits of a hefty down payment.
• You might need a larger down payment or face higher interest rates, but there are ways to work around these obstacles.
• Check your credit score to understand loan expectations and secure better interest rates; consider building credit if you have no history.
• Get pre-approved for a car loan to set a realistic budget, and determine your ideal car payments.
• New cars come with exciting new features for safety and enjoyment and come with valuable GM warranties.
• Used cars, differ from new cars in that they have higher mileage but can offer better value since they’ve already taken the biggest hit in depreciation. It’s all part of the total cost of ownership equation.
• Driving without a valid Alberta registration is a no-go, so make sure you have all the paperwork sorted before you take off from our dealership.

Step 1: Determine Your Budget

Before you set foot in a dealership, we recommend taking the time to establish what you can afford. This is where the clever 20/4/10 rule comes into play: a 20% down payment, a car loan lasting no more than 4 years, and keeping your total car-related expenses under 10% of your monthly pre-tax income.

This golden rule has been harder to abide by lately, but it ensures that your new car doesn’t become a financial burden. Calculating your budget? Don’t forget to factor in the extra costs that often surprise buyers, like sales tax and other fees.

The 10% to 15% rule advises that your annual income should guide your spending on all car-related expenses including insurance, taxes, and maintenance. But there’s some debate on whether shoppers should exceed budgetary advice.

And remember, it’s not just about what you pay upfront. Low monthly payment offers can be tempting, but they often mean a longer loan term and more interest paid in the long run. Using online payment calculators can be a lifesaver, helping you estimate those key numbers, like your monthly payment and the sweet benefits of a hefty down payment.

Speaking of down payments, putting down more money upfront can help you better manage the cost of owning and free your finances for other purposes.

Step 2: Check Your Credit Score

Ever thought of your credit score as your financial report card? Well, when it comes to buying a car, it’s a grade that lenders scrutinize. Knowing your credit score sets the stage for realistic loan expectations and those all-important interest rates. A good credit rating can be the golden ticket to better car loan terms, so it pays to keep your credit report in tip-top shape.

Soft credit checks on our website allow you to explore your financing options without impacting your credit score. This convenient feature lets you see personalized loan offers, ensuring a smooth and stress-free car buying experience.

Not sure where to start? Major credit bureaus such as Equifax and TransUnion can provide you with the numbers that shape your financial narrative. No credit history? No problem. Building credit through responsible borrowing, like using credit cards wisely, can prove to lenders that you’re reliable with money.

Step 3: Research and Choose Your Desired Vehicle

With your finances in check, it’s time to dive into the exciting world of car shopping. Have you considered what you need from your car purchase? Size, fuel economy, and performance are key factors that should drive your decision.

Dive into research mode and explore:

• models
• repair cost averages
• safety tests
• mileage

Knowledge is power, and it might just save you thousands in the long run, especially if you snag a vehicle with great specs and a reliable reputation.

Some of Our Customers’ Favourites

First up, the reliable Chevrolet Silverado 1500 is a crowd-pleaser thanks to its robust performance and exceptional dependability. Known for toughness, this truck is perfect for both heavy-duty tasks and everyday driving.

Next, the long-lasting GMC Sierra 1500 stands out with its combination of luxury and strength. Customers love its advanced features and dependable performance, making it a top choice for those who need a reliable vehicle with style.

Lastly, the versatile GMC Yukon offers a blend of power and comfort, making it a favorite among families and adventurers alike. Its spacious interior and proven reliability make it an excellent choice for long road trips and daily commutes.

Step 4: Get Pre-Approved for a Car Loan

It’s hard to name a better starting point in your car buying journey than getting pre-approved for loans through a full application for credit. Pre-approval for a car loan offers several benefits:

• It helps you stay within your budget and avoid cars you can’t afford
• It gives you confidence while shopping, knowing exactly what you can spend
• It allows you to negotiate with dealers from a position of strength, showing that you’re serious and ready to buy.

Pre-approval can offer several benefits when it comes to financing a car:

• It can save you from dealership financing markups, potentially saving you money over the life of your loan.
• It sets a realistic price range and gives you a benchmark that dealers will have to beat if they want your business.

It can often open doors to better interest rates, as lenders will have already assessed your creditworthiness.

Understand Financing and Payment Options

When it comes to paying for your new ride, you’ve got options. You can pay in full or take out a car loan and spread the cost over time. But here’s the kicker: don’t just fixate on the monthly payment. The total price of the vehicle, including the finance terms, is what really counts.

A down payment can lower monthly payments and the total cost over time, while the right loan terms can save you thousands.

Can You Buy a Car With No Credit?

Buying a car with no credit can feel like climbing a mountain, but it’s not impossible. You might need a larger down payment or face higher interest rates, but there are ways to work around these obstacles. Improving your credit score or finding a co-signer with a solid credit report can make all the difference.

Even if you’re a first-time car buyer, or someone rebuilding credit, car loans are actually a way out! Feel free to ask our finance department for help and information on what you can do to make car loans work for you.

Step 5: Find a Reputable Dealership

The vibe of a dealership, the inventory, and how the staff treat you can speak volumes about the kind of experience you’ll have. Online reviews and social media can also give you the scoop on customer satisfaction, and let’s be honest, word of mouth from friends and family is worth its weight in gold.

A reputable dealership can have a few tell-tale signs but one of them is community involvement. For example, at Summit GM, we’ve taken some of the money from selling thousands of cars to northern Alberta and given back in the following ways:

• Sporting Events
• Scholastic Causes
• Summer Sounds Music Festival
• Festival of Trees
• Wood Buffalo Food Bank
• And More

Advantages of Buying From a Dealership

There’s a host of benefits when buying from a car dealer, also known as an auto dealership or a car dealership. Some of the perks include:

• Flexible payment options and helpful finance departments
• A wide variety of vehicles to choose from several manufacturers
• The peace of mind that comes with a one-stop shopping experience
• Room to negotiate, which can sweeten the deal even further

Step 6: Test Drive and Inspect Multiple Vehicles

The test drive is more than just a joy ride. But there’s more to feeling out a vehicle than just test-driving a GMC Terrain or another model that’s caught your eye. Start with a vehicle history report to uncover any questionable history, like past accidents or liens. You can also consider bringing in a third-party to Summit GM for an inspection.

At our dealership, we handle every step of the car history investigation for you, ensuring a seamless and stress-free experience. Our sales advisors are well-versed in the features of GM vehicles that are specifically designed to drive Fort McMurray’s winters. From advanced all-wheel-drive systems to heated seats and remote start functionalities, they can guide you to the best options for staying warm and safe during the cold months.

While test-driving at our dealership, channel your inner detective. Check everything from the steering to the brakes, and don’t forget to parallel park to find any blind spots. Bring a buddy for a second set of eyes and ears, and remember, if you’re not comfortable with anything, don’t hesitate to speak up! Our sales advisors are always happy to communicate with you about our new and used vehicles.

Step 7: Decide Between New and Used Models

Deciding between a new or used vehicle makes for an interesting choice. Used cars are not to be overlooked, and many times they’re great value. Let’s look at how to decide between the used inventory and new GM vehicles we stock at Summit GM.

Buying a New vs Used Car From a Dealer

New cars often come with enticing warranties and the latest features, but they can depreciate faster than a used model you’ll drive off the same lot. On the other hand, buying a used car can be a more budget-friendly option with a slower depreciation rate.

Used cars might have higher mileage but can offer better value since they’ve already taken the biggest hit in depreciation. It’s all part of the total cost of ownership equation.

New Vs Used Car Total Cost of Ownership

New cars have a higher starting cost but thanks to warranty, service and maintenance aren’t something you need to think about for a while; used cars have a lower starting costs but they may require much higher maintenance budgets in the first five years you own them. You should add everything up to compare apples to apples.

Extended Warranties and Service Contracts At the Dealership

Extended warranties and service contracts are like a safety net for your car. They offer protection beyond the factory warranty and can provide peace of mind for unexpected repair costs. Just make sure you understand what’s covered and what’s not, so you can decide between a used vehicle that’s in warranty and a used one that’s gone beyond.

Step 8: Review Contracts and Finalize the Deal

Contracts are the final step of the car buying process. This is where you need to be vigilant and ensure that everything you agreed on, from the purchase price to the warranty coverage and any extra fees, is in black and white. But our sales advisors focus on being well understood when explaining terms of the contract; you’re in good hands at Summit GM.

Step 9: Preparing for Registration and Licensing

Before you hit the road, there’s one last box to tick in the form of registration and licensing. Driving without a valid Alberta registration is a no-go, so make sure you have all the paperwork sorted before you take off.

Step 10: Take Delivery of Your Vehicle

The moment of truth arrives when you take possession on the lot or receive delivery of your vehicle after the sale’s done. This is your last chance to ensure everything is as it should be before finalizing the vehicle purchase.

Conduct a thorough check and confirm that any agreed-upon repairs have been made. A clean car, a full tank of gas, and a demo of key features should be part of the package. Our dealership is big on presentation when you buy from us.

Visit Summit GM for Help Getting into a New or Used Vehicle in Our Inventory

As we cross the finish line, let’s recap the journey. From determining your budget to understanding financing options, and from the joy of test-driving to the nitty-gritty of contracts, buying a car from a dealership is the gold standard of the car-buying experience.

Armed with this ultimate guide, you’re now ready to navigate the dealership terrain with confidence. Come down to our trusted dealership for everything from test drives with our sales advisors to finance deals with our finance manager. Drive off into the sunset, knowing you’ve made an informed purchase on a new or used vehicle.

Frequently Asked Questions

Should I consider gap insurance for my new vehicle?

Yes, it’s worth considering gap insurance, especially if you have a small down payment when financing or leasing a new vehicle. It covers the difference between the car’s value and the loan amount if it’s totaled or stolen.

Can I only lease a vehicle at a dealership?

While you can lease a vehicle from various sources, dealerships are often the best choice due to their manufacturer-backed lease deals and comprehensive customer service. Dealerships provide a more seamless and reliable leasing experience compared to third-party leasing companies. And you can make the decision between buying and leasing on the lot.

Can you return a vehicle after purchase in Alberta?

In Alberta, you generally cannot return a vehicle after purchase unless the dealership has a specific return policy. You should thoroughly review the contract and understand a dealership’s terms before finalizing the purchase.

Can I drive a car I just bought without plates in Alberta?

No, you cannot drive a car without plates in Alberta. You must have valid registration and plates before driving your newly purchased vehicle on public roads.

How old does a car have to be to need an inspection in Alberta?

In Alberta, cars that are 12 years old or older must have an inspection according to most insurers. Older vehicles go through inspections to meet safety and emissions standards before they can be registered.