1. Don’t buy a car using credit.
Why you might ask? Because you cannot afford the car if you don’t have the money for the car and it puts you at a disadvantage when talking with the car salesman and will put a dent in your credit report as they will perform a hard check on your credit.
2. Don’t buy a car using a large loan.
If you want a $60,000 car and you don’t have $60,000 in liquid income then that is something you cannot financially afford to have or maintain. Save up for big purchases and include the estimated cost of maintaining that purchase. This should be things like what the cost per gallon will be, regular maintenance on the vehicle, depreciation and how much paying for the car will take away from other bills you have to pay.
3. Don’t go in and pay the sticker price for the car, if your walking in without a cash in hand you will have less to bargain with in negotiating the price you want to pay. It is very hard for a car salesman to turn away real money for the full amount of the car right now, then someone that will be making little payments over time that might not actually finish paying.