Outside of purchasing a home or choosing a college, buying a car is arguably the biggest financial commitment a person will make. For first-time car buyers, the process can prove as intimidating as it can fun.

Most auto buyers will be looking to finance or lease their vehicle rather than buy it outright. But even those buyers who aren’t planning to finance will likely look to negotiate the final cost of the vehicle in the same way buyers hoping to finance or lease will negotiate the terms of their purchase agreements. Before any negotiations can begin, there are things buyers should know about the process that can help or hurt them at the negotiating table.

* Know your budget. A buyer’s budget extends beyond the sticker price of their new vehicle. Auto insurance and fuel should also be considered when buyers are creating their vehicle budgets. The cost of auto insurance can vary significantly depending on the type of vehicle purchased. For example, the latest sports car to hit the market will cost more to insure than a typical sedan. The same goes for fuel costs, as an SUV will clearly cost more to gas up than a compact car. Each of these costs should be factored into a buyer’s budget.

* Know your credit score. Buyers who hope to lease or finance a vehicle should know their credit scores before visiting a dealership. The interest rate a buyer hoping to finance receives will largely depend on the individual’s credit rating. If a buyer’s credit score is low and a new car isn’t entirely necessary, it might be a good idea for buyers to keep their current vehicle, re-establish their credit and then revisit the buying process once their credit score has recovered. Men and women hoping to lease a vehicle should know that many lease agreements require a minimum credit score and individuals whose score is not high enough are not eligible to lease.

* Know the factors that determine an interest rate. Interest rates can be low and they can be high, and it’s not just a buyer’s credit score that determines the interest rate. The type of vehicle, the amount of the down payment and the length of the finance agreement all help determine the interest rate a buyer will receive. When negotiating an interest rate, buyers should ask the lender what they can do to reduce their rates. A bigger down payment, which should also result in a shorter financing agreement, will likely lead to a lower, more manageable interest rate.

* Know the value of a co-signer. Many buyers would prefer to go it alone when buying a new vehicle, but for some buyers a co-signer can greatly reduce how much they will end up spending. Younger drivers, for example, often have limited credit histories, which makes them riskier in the eyes of lenders. While a lender might still agree to lend such drivers money, it’s often at the expense of a significantly higher interest rate. Drivers with limited or checkered credit histories might want to ask someone close to them to co-sign a loan, which could greatly reduce their interest rate, saving them substantial amounts of money over the course of the loan.

* Know what you’re buying. The most flashy car on the lot is not necessarily the most reliable. Because a new vehicle is such an expensive investment, buyers should do plenty of research before visiting a dealership. Compare vehicles being considered for a host of factors, including safety ratings, average insurance costs, fuel economy, and maintenance history. When a make and model is settled on, visit several dealerships and shop around for the best price. This research will take some time, but effective research will pay off in the long run.

Buying a vehicle can be an intimidating, fun and sometimes stressful process. Buyers should know what to expect ahead of time to ensure the process goes as smoothly as possible.

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