So here’s the list:

1. The first is obvious. These days you can start shopping online. Don’t visit a car dealership without prior information of average price of new or used car that you are considering. Go online and find the car you want to buy. This will save you lot of time as you will not have to go from one dealership to another. Moreover, you will not be swayed by emotions and pay far more than you could have.
2. If you are getting car financing, you must know your credit score. This will help you find the right lender and also let you know the APR you qualify for. Some reputable websites provide new car buying tips online as well as excel sheets for calculating monthly payments on the basis of your credit score.
3. Avoid third party loans at all costs. There is never a free lunch and if you let the salesperson arrange a car loan for you, you are going to end up paying higher monthly payments. Just as car shopping can start online you can also get a car loan approved online.
4. Get your old car evaluated before you offer it as a trade-in. There are websites where you can get to know how much your trade is worth (like Kelly Blue Book). However, remember that all assessment of old cars is only indicative of book value and not set in stone. The actual value depends upon on how well you have maintained the car. The car dealership is buying your car for reselling and you are likely to get a lower trade-in value than if you sell it yourself.
5. Almost all the car sales scams take place when it comes to settling payment. There are lots that the finance department will do to extract more money from your pocket. Apply your mind and decide whether you really need extended warranty, GAP insurance and other products that they are offering.
6. Always keep affordability and cash flows in mind and never let excitement get the better of you.
7. Get insurance quotes. Factor the insurance cost before you finalize the deal. You may not know how much your monthly payments will be until you get an insurance quote.
8. Learn car buying negotiating tips from online sources. MSRP is only a recommendation and not necessarily the price that car dealerships will agree to sell at.
9. One of the biggest mistakes that buyers commit is on add-ons. Use your negotiating skills here also to get the best deal on these as well.
10. Choose add-ons that you must have and discard the ones you can do without. Add-ons are a lot cheaper in the open market.

Anything to add to the list? Have a car buying horror story? Let us know in the comments!

There are of course a few common problems that you need to look for when test driving a car.

The first stage of your used car test drive should involve testing all of the functions of the car:

You need to test the head lights, heater, A/C, radio, interior lights, mirrors, brake lights, turn signals, defrost, safety belts, windshield wipers and seats for how they function.

Plus, you want to check out any additional options like electronic seats, seat warmers, GPS etc.

Starting the car:

Before you start the car, be sure to check if the car is already warm. If it is, the owner may have pre-heated the engine before you arrived so that the car will start easier… if this is the case, be aware that the car may have cold start problems.

Open the hood before starting the car. Check to see if there are any wet parts of the engine, this will tell you if there are any leaks.

Start the car and pay attention to whether the engine strains at all when starting. This may mean the battery or electrical system is on it’s way out.

Once the car has been started, go back to the engine compartment and check again for any wet engine parts. Some engines will leak only when running.

Put your hand on the fender of the vehicle to check if you feel any harsh vibrations. The car should run fairly smooth and not shake the vehicle.

Finally, if the car has power steering, make sure that the steering wheel can be moved smoothly back and forth and there are no strange noises when you do this. If there is a loud whine when you move the steering wheel this may mean the power steering pump is fried.

Test Driving the Car:

Finally it’s time to take this car on the road! Through the entire test drive process, be aware of the sounds of the car. Does the brake pedal make noise? Does the engine make a strange noise at a certain speed? Does steering the car make a strange noise? These are questions to be asking yourself the entire time you are test driving the car.

The first thing you want to notice about the car is how the transmission shifts:

If you’re test driving an automatic car, you should almost not even feel the shift when driving slowly. If the shifting takes longer than 3 or 4 seconds this is a major problem.

If you’re test driving a standard car, the shifts should be smooth and easy. If the car grinds into the next gear then the synchros are probably in need of repair.

While driving down a quiet street, take your foot off the gas and let go of the steering wheel (CAREFULLY!). If the car pulls one way or the other, there is most likely an alignment problem. Also, push the brake lightly and if the car pulls left or right under braking there is most likely a problem with the braking system.

Make sure you take the car both up and down hills. Does the car shake when braking down a hill? If so, the brakes need service. Does the car handle accelerating up a hill? Or does it cough and lose power? This could mean a number of engine problems that need to be checked out.

Finally, you need to take the test drive to the freeway:

This step is really important. Any major problems with the car are going to be very apparent when riding on the freeway.

Here are some things to look out for:

• Does the car pull to the left or right?
• The brakes pulsing or shaking when applied.
• Excessive wind noise when all of the windows are closed.
• Does the car seem to “float” around? There may be suspension problems.
• Does the engine sound normal?
• If you stomp on the gas pedal does the car cough or hesitate before accelerating?

If any of the problems above are apparent during your test drive, you should have the car checked out by a mechanic before purchasing.

Also, be sure to check out our articles on car dealer scams so that you can protect yourself when buying a used car.

Have anything to add to the list? Seen any weird problems during a test drive? Let us know in the comments below.

Sometimes, there are so many fees that it can be confusing to know which ones are really legit.

One such fee is the dealer prep fee.

The dealer prep fee is a scam… plain and simple. Here’s why:

The dealer prep fee is supposed to cover the dealer’s time for things like removing the cardboard carpet covers… the plastic on the windows… and taking the car for a test drive.

And even though the dealer will charge you something like 400-500 bucks for this service, it seems pretty expected that they would want you to pay for their service, right?

WRONG!

The thing is, most manufacturers already pay the dealer for this service by including this service in the price of the vehicle!

So where is that extra 500 bucks going? Straight to the pockets of the car dealer.

The manufacturer wants the vehicles to be delivered in the same way for each customer. That’s why they include this service in the price, so that they can get the dealers to follow their steps correctly.

Though the dealer prep fee isn’t necessarily common practice, it is out there… and you should know about it.

If you do run into a situation where a dealer wants to charge you the dealer prep fee, tell them to remove it from the invoice. If they refuse, then you can let them know that you’ll find another dealer that wants your money. After all, just think about how many other scams this dealer is trying to push on you if they are willing to try and pull the dealer prep fee off on you?

If you’ve had any experience with a dealer prep fee, let us know in the comments below.

While you’re at the dealer, don’t forget to try and get as many car insurance discounts as possible too. Check out a few of the most common discounts here.