Sign On
  • Online Banking
    Sign On Form is Loading

A car is often one of the largest purchases you can make and the more bells and whistles you add on, the more it will end up costing you. Consider taking some time to think about what you really need versus what your budget will allow.

There are a lot of options and some will cost you more than others. Because this is such a large purchase, be sure that your finances are in order before you even set foot on the lot at the dealership.

Here's how to get your financial ducks in a row before buying a car.

Step 1: Decide What You Need

Having a car might be a need for you, but the type of car you get is more dependent on your wants. And dealerships may try to upsell you on extra features, luxury models, or more expensive options. Knowing what you need versus what might be nice to have can dramatically impact the price you pay.

What's important to you? Think about features like safety ratings, gas mileage, available space, or the ability to haul loads. Then research and use resources like Kelley Blue Book or Consumer Reports to help understand which makes and models receive great reviews — and what the value of those particular cars are.

Step 2: Know Your Credit

Many people will finance their purchase with a loan. By doing this, your credit score will determine the kind of financing you can get and the interest rate a lender would offer you. The better your score, the lower the interest rate you can secure on your loan. This is a big deal because the interest determines how much your loan costs over time.

Credit scores range between 350 and 800, with anything under 579 considered "poor" and anything above 670 considered "good." A higher score also makes it easier to qualify for the loan you want. You can check your score by looking at your credit card statements (some cards offer your FICO score monthly as a cardholder benefit), various apps (such as Credit Karma), or by going through the credit bureaus.

If you see that your score needs improvement, you may want to put off a car purchase until you can raise your score into the "good" range. You may also want to pull your credit report to make sure there are no mistakes or issues with your credit history (which could lower your score).

Step 3: Get Loan Preapproval

Once you understand your credit and feel confident that you will receive the financing you want, take your information to a lender. Consider getting financing from a bank or credit union rather than the dealership. While car dealers can help you with financing, they charge a premium for doing so and your loan may cost you more in the long run.

Start with where you already bank. They may offer a deal to existing customers. Then, compare offers for interest rates and terms to quotes from other institutions so you can choose the lender that fits your needs best. You can then request preapproval and take that to the car dealership.

Step 4: Decide What to Do with Your Existing Car

If you have a vehicle already, decide what will happen to it. Will you sell it on your own before buying a car from a dealer? Do you want to trade it in? Look at all of your options and see which one best aligns with your needs and financial goals — will selling your existing car allow you to purchase a new one without dipping into your savings?

Step 5: Set a Budget (and Stick to It!)

Lastly, set your budget! Know before you go to the dealer how much you can spend and commit to it. There are plenty of cars on the market, and you can find one for the dollar amount you're willing to spend.

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

By selecting any external link on, you will leave the KeyBank website and jump to an unaffiliated third party website that may offer a different privacy policy and level of security. The third party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend, or guarantee any product or service available on that entity's website.

Call Us

1-800-KEY2YOU® (539-2968)

Clients using a TDD/TTY device:

Clients using a relay service:

Schedule an Appointment

Talk to a Branch Manager in your neighborhood.

Schedule an appointment now

Find a Branch or ATM