This article is sponsored by Capital One in conjunction with the new Capital One Auto Navigator® site. All opinions are my own. 

 

I’ve lived in New York City since I was 18 years old. I didn’t even get my license until I turned 20.

As a driver, I’m a mix between NYC road rage and a New Jersey grandma. But I can’t escape cars! And it sounds like my readers can’t escape them either.

It’s one of those milestone money moments I’m always asked about – how to buy a car without winding up with a lemon, leaning on mom and dad or overspending.

Though my driving skills are admittedly a bit shaky, my car shopping skills are on point. Here are 3 ways that shifting your car shopping mindset can help you save money on your next car.

 

Understand the implications of your car shopping choices

 

In America, irresponsible car purchases are among the top reasons for debt.

 

Just like home ownership and college education, the choices you make when buying a car have the power to affect your broader financial picture in some pretty major ways.

 

Because car financing deals are typically broken down into digestible, monthly payments, an extra $50 or $100/month may not seem like much, but those added costs can have a considerable impact on your financial life over time.

 

As one of the biggest expenses of your adult life, your car purchase represents a major opportunity to keep your living costs low, in a way that skipping lattes and brown bagging your lunch each day cannot match.

 

So before you get your heart set on that new Prius (or whatever car speaks to you), consider first how much you can afford.

 

Remember, the less you spend on your car, the more money you have left over to spend on everything else!

 

Speaking of…

 

Know how much you can afford

 

How much car can you afford?

First, you have to decide if you’re going to buy your car outright or finance it.

If you’re going to buy it outright, try to spend less than 20% of your annual income. If you’re going to finance it, plan to put down 20% and finance it for less than four years.

 

Whether you’re financing or paying cash, your primary goal should be to keep your monthly auto expenses below 20% of your monthly take home pay. This includes gas, repairs, registration, insurance and the payment.

 

If you decide to go the financing route, it’s important to be clear on your monthly payment maximum (remember, the 20% rule has to cover a lot more than just your financing payment).

There are so many factors to consider when buying a car – fuel efficiency, insurance costs, repair and maintenance, and the actual cost – that it can be confusing to make smart decisions in-the-moment.

To avoid this, make sure to figure out the kind of payments you can expect beforehand. Capital One’s Auto Navigator® site is an online tool that allows you to pre-qualify for auto-financing with no risk to your credit score before visiting a dealership.

Once you’re prequalified, you can use their filters to review multiple vehicles and various finance terms, including the APR and monthly payment based on down payment amounts and different term lengths.

It will also provide you the chance to view estimated amounts for tax, title and license, and the cost of optional warranty or gap insurance coverage.

The end result? You’ll know exactly what your monthly payment will be before you head to the dealership, and you won’t be blindsided by additional costs or confusing negotiations.

 

Do your research before you test-drive

 

When we think about buying a car, what’s the first thing we do? Head to the dealership. The idea is that somehow the decision-making process needs to happen behind the wheel of the car.

Think about it this way though. If you’re on a diet, do you wait until you’re starving and sitting at the restaurant to decide what to order? Not unless you want to get the pasta with a side of breadsticks. If you want to stick to your calorie goals, you make your decision beforehand, when you’re not hungry and can think clearly.

The same concept applies to cars (or any big purchase). When you get out of your rusty beater at the dealership and slide behind the wheel of some shiny, new car, you’re not thinking about maxing out your 401k or your 10-year financial plan. You’re thinking, this car is badass. I want it.

 

Don’t be the dad that leaves to buy a minivan and comes back with a Corvette. Research potential cars before you test-drive them.

 

If you use Capital One’s Auto Navigator® site, you can view advertised cars at eligible dealerships and see your APR and monthly payment for those cars in real time. Once you settle on a few options, you can bring a pre-qualification certificate to the dealership to finalize your financing (and help avoid some of that high-pressure upselling by the dealer).

Sure, it’s tempting to grab your purse and head out to drive some sports cars. But remember this – it’s the ability to make rational decisions in the face of temptation that makes us adults.