Buying the right car is a huge decision.
“Buying a car is a big deal,” says Sarah Brennan, a Member Advisor at AAA Car Buying in Phoenix, Arizona. “But that doesn’t mean it has to be stressful. If you know what to expect and follow a methodical process, you can find a car that meets your needs and budget.”
In this guide, you’ll learn everything you need to know for your next car purchase: how to buy a new or used car, how to finance a car and how to get the best deal.
The first step for a stress-free car buying process is to define your budget and needs before beginning your search.
To determine how much you can afford, take a look at your overall personal financial situation. How much do you have in savings? Are those savings already allocated to other goals? How much could you set aside for a down payment?
You’ll also want to evaluate your monthly cash flow. Knowing exactly what you have coming in can help you figure out how much you can spend on a monthly car payment.
Remember that if you decide to take out a car loan (more on that later), your monthly payment will also include interest costs. Make sure to factor average interest rates into your budgeting.
Many factors influence how much you can afford — and it goes way beyond your monthly payment.
“When it comes to the car’s purchase price, most AAA Members know what they can afford,” Sarah says. “But one of the perks of AAA Car Buying is that we help Members understand the true monthly cost of car ownership and how that fits into their budget.”
A car’s cost goes way beyond the sticker price. That’s because there’s a difference between buying a car and owning one.
In addition to the down payment and monthly installments, you’ll also need to factor in the ongoing maintenance costs.
Since the pandemic, car shortages and manufacturing delays have impacted the market — which can make the car buying experience more stressful and challenging.
Prices and availability can vary when there are supply chain issues or an uncertain economy. That means a more limited selection for buyers like you.
In this environment, many buyers will need to move quickly to secure the right car. No matter what the market brings, AAA Car Buying is here to help you get the car you want.
“If you haven’t purchased a car lately, you’re in for an eye-opening experience,” Sarah says. “It can be off-putting to think about spending $40,000 on a car that you’ve never seen, test driven or touched. We’re here to help you through it all.”
To figure out what you need in your next car, start by considering your current car. What do you love, like and loathe? What are the must-haves and simply nice-to-haves?
For example, drivers in sunny Arizona might find heated seats and all-wheel drive less important than a sunroof and light-colored exterior. For a growing family, a backseat spacious enough for infant car seats (or a few dogs) is a must!
You can take the time to research car options on sites like Kelley Blue Book, Consumer Reports and Carfax. Or you can sit down with a AAA Car Buying Member Advisor like Sarah.
“We take care of everything,” Sarah says. “Our job is to guide you through the whole buying journey so that you get a car you love. We want you to come to us with any questions, big or small.”
AAA Member Advisors will help you understand what you want versus what you need. Luxury vehicle or four-door sedan? Plug-in hybrid or fully electric? AAA is here to help you sort it all out.
“My goal is to streamline the process of buying a car,” Sarah says. “That starts by supporting you to make an informed decision about what’s best for your budget and long-term needs.”
Once you’ve decided on your budget and must-haves, the next step is to determine whether you want to buy a new or used car.
And we’re here to make that decision as easy as possible.
To get the most bang for your buck, consider a used car. You'll avoid the depreciation that comes with driving a new car off the lot.
You’ll also likely benefit from updated features — and more efficiency — especially if you buy a car built in 2016 or later.
Remember that some of these may still be optional features depending on the make and model you choose. But many newer models include:
“We really want our Members to understand the benefits of these new safety features,” Sarah says. “Not only can they keep your family safe, but they can also reduce your monthly insurance premiums.”
A safer car for less money? It’s a win-win.
So, how to actually find your used car?
Car dealers usually have a limited selection of used models. These tend to be listed on sites like AutoTrader or CarGurus.
You can also opt for a private sale on sites like Craigslist or Facebook Marketplace.
If you go this route, be prepared to spend a lot of time browsing car ads and messaging back and forth with what may be multiple options. It’s a significant amount of effort to invest in a process with very uncertain outcomes.
There is a better way. AAA has a large inventory of used cars available.
“Many of the used cars we sell were driven by fellow AAA Members in and around Phoenix who typically drive short distances and don’t rack up mileage,” Sarah says. “We also offer haggle-free pricing and are clear about all fees upfront.”
When buying a used car on your own, you can still get blindsided — no matter how much research you do,
A car’s Carfax report isn’t necessarily the whole story. There are ways to hide accidents and other problems from insurance companies. What seems like a clean report now could cause trouble for you later.
That’s why AAA Car Buying includes a four-page inspection report for the used cars in its inventory. It’s an extremely comprehensive inspection to give all buyers complete peace of mind.
In addition to cosmetic issues like dings, dents, and scratches, AAA’s inspection report checks for red flags like:
AAA also checks the functionality of mechanical parts like:
This is all information that AAA Member Advisors like Sarah will provide to you upfront — without any extra digging.
If your heart is set on a certain make and model in a specific shade of sky blue with less than 100 miles on the odometer, then a new car may be right for you.
With new cars, buyers can be ultra-specific about customizations. From car color to trim to audio systems, everything is up for grabs with all the latest technology and features.
Just be prepared to wait. As we mentioned earlier, the pandemic caused residual shortages of new cars and parts. So you may not be able to purchase your new car and drive it home on the same day — or even in the same month.
If you’re in the market for a new car, start on the original equipment manufacturer's (OEM) website. On sites like Toyota.com, you can browse the newest models and even build your dream car, with details on estimated cost and availability.
All those customization options can be overwhelming, especially if you’ve never bought directly from the OEM before. It’s why AAA Car Buying Advisors are here to help you make sense of it all.
“When a member wants to buy a new car, we’ll build the car together,” Sarah says. “We can answer questions about the technical features and discuss if they’ll meet your needs.”
There’s nothing simple about new car pricing.
Typically, each new vehicle has three different numbers associated with it: the invoice price, the MSRP price, and the Fair Purchase Price Range.
The Fair Purchase Price Range (or True Market Value) is what the car is actually worth nationwide, based on real sales from sites like Kelley Blue Book and Edmunds. This price is based entirely on transaction data and updated weekly.
Of all three options, the Fair Purchase Price is the one that flexes according to market conditions and can give you the best picture of how much a car will cost.
And just to make things even more confusing, the price you pay may not be any of these.
If you order a car from a dealer, they may not be able to honor the original price quoted to you when you placed the order. It’s not unheard of for bidding wars to break out among buyers at dealerships due to low supply. This can result in you having to pay thousands of dollars more than planned if you don’t want to lose out on the car.
AAA Member Advisors are well versed in this process and will work on your behalf to minimize this as much as possible.
To make the process even easier, AAA Member Advisors can run nationwide searches on new car inventory to ensure you get the car of your dreams.
For AAA Members, it’s a great option.
Once you’ve decided what you need in a car, it’s time to think about how you’ll pay for it.
There are three options to pay for a car:
The best one for you will depend on your budget, lifestyle, and how long you intend to use the car. Let’s walk through the options.
Leasing isn’t actually purchasing a car — it’s more like renting a car. With leasing, you pay a set monthly fee to use the car over a determined period of time, usually two years.
Your regular monthly payments typically don’t cover basic maintenance costs, depending on the leasing agreement. And because you don’t own the car, you’ll have mileage limits.
Buying in full is exactly what it sounds like: you pay for your car upfront. If you want to own your car and intend to use it long-term, this may be the best option for you.
With no contract hanging over your head, you can drive as much as you want or sell your car anytime if your circumstances change.
Buying your car outright also means you avoid paying extra money on interest.
Dealerships may receive incentives from lenders, so financing your car purchase is often more profitable for them than a cash sale. They might try to steer you in that direction so keep an eye out!
“If you have the cash and are willing to spend it, buy your car outright,” Sarah says. “You’ll potentially save thousands of dollars in interest and won’t have to worry about financing.”
While you'll save on interest, buying your car means you will be responsible for everything: maintenance, repairs, all of it. Unless you buy a warranty — see below for more on warranties — you’re on the hook for any broken parts or replacements.
Buying a car is also a lot of money to spend at once. It’s common that other savings goals may prevent you from buying your car outright. It’s why many car buyers opt for financing.
Car financing allows you to buy a car by borrowing from a financial institution like a bank or credit union.
Each month, you make payments towards the principal amount and interest. When the loan is paid off, the car is officially yours.
The details of your loan will vary depending on general lender terms, your credit score, and whether you’re financing a new or used car.
On average, the typical car loan length is five years, and interest rates are currently between 6 and 10 percent. You may also be able to take advantage of special financing deals from manufacturers.
If there are no active manufacturer deals, check with your local bank or credit union for financing options.
Finding the right financing on your own is a lot of time and effort. But with AAA Car Buying, members can take advantage of AAA’s large network of lenders to shop for competitive rates quickly and easily.
Cons of financing a car
Car warranties can help you avoid unexpected expenses down the line. They typically cover broken parts or defects, but not normal wear and tear.
With car part shortages and rising labor costs, warranties can lock in today’s rates and help protect you from unexpected expenses.
The cost of a car warranty will depend if you opt for a new or used vehicle, along with the year, make, model, and the miles it has on it (if pre-owned).
For a new car, manufacturers typically provide a warranty that covers all or part of the car for a certain number of years or miles. Extended warranties are also available for new cars to protect the purchase after the original warranty expires.
For used cars, consumers can purchase an extended warranty at the time of purchase. If you pay cash for the car, you’ll also pay cash for the warranty (typically $2,500 - 5,000). If you finance your used car purchase, the cost of the extended warranty will typically be added to the total amount and included in your monthly payments.
In the event of a covered repair, you normally pay a low deductible.
Just like the car itself, the warranty should meet your needs.
For Top Tier peace of mind, Members can choose a AAA warranty for their new car.
Backed by CNA National in Scottsdale, the warranties cover 100% of parts and labor on all covered repairs, at any mechanic, for any used car sold by AAA.
And if it’s in the shop for more than 24 hours, you’ll be covered for rental car reimbursement.
When you’ve found the right car for you, it’s time to seal the deal.
Part of what makes car buying intimidating for people is the fear of being talked into something they don't want, or even need.
Most buyers are so focused on their monthly payment amount, they don’t double-check what goes into that number. But if you look a little closer at your final cost breakdown, you’ll find line items for all the other ways dealerships profit from the sale, including:
But what are these exactly? Let’s break down the differences.
Most of us are familiar with commissions. This is the cut a salesperson gets when you buy something from them. Car dealers are no different.
At a dealership, compensation can be heavily or even entirely commission-based; Salespeople don’t always receive a base salary. The car price also usually includes commissions for the manager, sales manager and general manager.
Dealer add-ons are the extra bells and whistles on a new car, like window tints or floor mats, sold to you at a markup.
Here are some common examples of dealer add-ons:
While some of these products may be useful, you may be able to get these items elsewhere — and at considerable savings if you put in the time and effort.
Market adjustments are the difference between the MSRP (the manufacturer’s suggested retail price) and what the dealership actually charges for the car, based on current market demand.
With recovery from the pandemic and ongoing supply chain issues, more costs have had to be passed onto consumers with market adjustments, often added as extra line items to your final car bill.
To avoid those surprise fees, make sure you shop at a reputable dealer who will be transparent about including market adjustments in the price.
If you’re purchasing a car from a dealership, ask to see your purchase agreement — with a full cost breakdown — before you sign or shake on anything.
This way you ensure you can afford the monthly payment and out-the-door price, but also that all the numbers are to your liking.
“You might have agreed to the final price, only to see a breakdown of the numbers and realize it still includes line items you didn’t agree to,” Sarah says. “Even if the final number is what you expected, you might object to the idea of $2,500 in dealer add-ons.”
AAA Car Buying Advisors aren't paid more for getting you into the most expensive car available. This means an entirely different car buying experience for you as the customer, as there isn't an incentive to the Advisor to offer you something you don't need, in disguise of "want".
“My role is not a traditional sales role,” Sarah says. “I’m a salaried employee. This allows me to be your advocate and work with you.”
Here’s the best part: for AAA Members, the car buying service is currently free to use. You only pay a finder’s fee at the time of purchase. This is a flat fee factored into every car price.
Compared to purchasing from other sources, AAA Car Buying can save you a significant amount of money.
By avoiding dealer add-ons or market adjustments, the cost of the car itself is much lower with AAA Car Buying.
And the cost savings are even greater when you consider the value of your time. Purchasing a car at a dealership can sometimes take upwards of eight hours, most of which are rather stressful.
With AAA Car Buying, signing on the dotted line takes about an hour.
And all that paperwork at the end? We make it easy for you — and even offer home signing services.
“We're not in the business of wasting anybody's time,” Sarah says.
If you have an existing vehicle to trade in or sell, you have a few options: managing a private sale yourself, selling to another dealership, or working with AAA Car Buying.
Selling your car directly means you’ll get 100% of the money you sell it for (minus any outstanding financing) — with no commissions or fees to worry about.
But it's a time-consuming process to list your car and answer inquiries. Plus, since you’ll usually have to arrange a test drive with a potential buyer, Craigslist comes with some risk. Sarah urges common sense when meeting strangers.
Take every caution to ensure all the title transfer, registration, and insurance paperwork is completed properly. If not, you could be implicated if your buyer gets in an accident or commits a crime and the license plate is traced back to you.
When trading in a car with a dealer, patience and reasonable expectations are key.
Be prepared to spend a lot of time waiting around and dealing with several different people, from the mechanic to the sales team, while you try to get your car appraised.
Even after that wait, your trade-in offer can still sometimes be lower than the actual value of the car. This is a trade-off you’ll need to consider before moving forward with a dealership trade-in purchase.
Your AAA Car Buying Member Advisor is your advocate on both sides of this transaction — buying the new and trading in the old.
“Our role is designed to get Members the right car at a competitive price and get them as much money as possible on their trade-in value,” Sarah says.
Because of AAA’s Member network in addition to our relations with other used car buyers, all Members are positioned to get competitive bids on their previous vehicle(s) from our sources with the efforts of their Member Advisor to work on their behalf.
No matter which option you choose, here are a few tips for a smooth trade-in that gets you maximum resale value.
Unless you’re replacing the windshield or need new tires, trade in the car as-is. Not much else will increase your car’s trade-in value significantly.
Even if your car has been totaled, it may still have trade-in value.
“If your vehicle has been totaled and you’re trying to settle with your insurance company, come to us first,” Sarah says. “We can help you determine the value of your car and can walk you through how to deal with your insurance company.”
You’ve signed on the dotted line and now have your keys in hand. Congratulations on your new car — and on making it through the car-buying process!
For your own safety and enjoyment, it’s important to learn how to use every feature of your vehicle. But you may have some questions, especially if you haven’t purchased a car in a while.
But what if you can’t figure out how to sync your phone with the car’s Bluetooth, or what all the lights on the dashboard mean? Here are a few ways to find answers.
As a Car Buying Member, you’ll receive comprehensive support from your Member Advisor as you get to know your new car:
“I have an open-door policy,” Sarah says. “So if you get home and wonder why a button is making that noise, or why you can’t get something to work, write down your questions and give me a call.”
As we’ve said, buying a car can be time-consuming and confusing. But it doesn’t have to be so stressful.
With AAA Car Buying, you have an advocate at your side the entire time:
“Our Members are welcome no matter where they are in the buying process,” Sarah says. “Let’s take this journey together.”
