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This checklist can help you gather everything you’ll need to buy a new car before you jump into the process of buying a new car at the dealership. Check it out:

Your driver’s license.

You should be carrying it with you no matter what, but the dealership needs to see that you’re a licensed driver before you drive off in your new car. Make sure it’s valid and not expired.

Proof of insurance.

Before you put the keys in your new car’s ignition, you’ll need proof of insurance when buying a new car. After all, it’s required in most states. You can speed up the purchasing process and avoid delays at the dealership by calling your insurance agent beforehand. Ask them how you can prepare to remove your old vehicle and add your new vehicle to your policy. Be sure to bring your current proof of insurance card to the dealer, too.

Form of payment.

Whether you’re using a check, cash, or a loan to make your purchase, you’ll want to have your payment ready. If you’re getting a loan with the dealership, prepare to be there a while to handle all the relevant paperwork. Be prepared to pay a down payment at the dealership, too. Call the dealership before you go and speak to the financing department to see what documents they require — and ask about pre-approved financing.

Recent pay stubs.

If you plan on getting a loan through the dealership, they may require you to show proof of your recent employment. Bring a couple of your most recent pay stubs just in case.

Credit score and history.

While the dealership will be able to pull your credit score and history, check it yourself, review it and bring it with you when you plan to buy your car. Beforehand, check for signs of unpaid or late bills and resolve them.

Discount information.

If you’ve got a discount coming from your credit card company, the dealership, the manufacturer or anyone else, make sure you have all the necessary information with you so you don’t miss out on the deal. Walk through the fine print of the deal slowly, too, so you fully understand the promotion.

A list of references.

If you don’t have great credit and are applying for a loan through the dealership, you might also have to supply a list of references who don’t live with you. Have this on hand with the names, business address and contact information of people who can vouch for you.

What to Bring to Trade in Your Car?

If you’re going to trade your current vehicle in when you buy your new car, you’ll need a little extra paperwork and preparation to make sure everything goes smoothly. Bring these things to make your car buying and trading process easy:

Current certificate of title.

The dealership should help you prepare to transfer your car’s title to them. If you can’t locate your title, contact your local DMV to get a duplicate, but be prepared to pay a fee.

Current vehicle registration.

Unless your current car is going to be junked after you trade it, you need to provide the current registration. You should be able to trade it in with expired vehicle registration, but the dealer will probably give you less for it since they’ll have to make it current themselves.

A clean vehicle.

You don’t have to get the car washed and detailed, but you’ll want to pull out all of your personal belongings so you don’t get caught up in the deal and forget something that matters to you. You also don’t want to be rude to the dealer and hand over a car full of food wrappers and cups, so do them a favor and tidy it up a bit.

Service records.

Have all service and repair information ready, as the dealer will want to know of the vehicle’s previous maintenance beyond the vehicle history report they’ll pull.

Benefits of Buying a New Car

Freedom of Choice

When you buy a new car or truck, you're the boss. You can consider a wide variety of vehicles in the size and price class you want. You can test-drive them all. You can select your favorite color. You can equip it with whatever features you need and want. You can choose between leather and cloth upholstery. You can upgrade the audio system. You can add high-tech gizmos such as a communication, entertainment or navigation system.

Better Finance Rates

While a used car may initially cost less than a new one, the interest rate you pay likely will be higher. To begin with, you wouldn't get the low-interest financing or cash rebate that usually is offered as an incentive to new-car buyers. Furthermore, financial institutions generally charge a higher rate of interest on loans for used cars — usually a full percentage point or two. However, some of the automakers' certified pre-owned programs offer discount financing.

Available Features

When you buy a new car, you get the state of the art — of the year of the used car. Every model year, manufacturers add and adopt technologies and features to vehicles either as standard or optional equipment as a way to lure buyers to new cars. Those technologies may be safety breakthroughs or they may just be convenience gadgets. The only way to get the most advanced technology and the latest convenience features is with a new vehicle. Automotive electronics are evolving so rapidly that unless you buy a new car, your vehicle's technology is already outdated.

• Made to Order — Chances are, you can spec a new car just the way you want it, or at least have the dealer search for one with the right combination of options and interior and exterior colors.

  It’s Not Used — Well, duh. A new car hasn’t been in any accidents, hasn’t been mistreated by unknown evildoers, doesn’t smell funny, has seen no wear or tear, and comes with a clean history that includes only being driven off the line, onto a transporter, and around the dealer’s lot.

  Warranty

  — Like the rest of it, the new car’s warranty is untouched. You can buy warranties for used cars or go the certified pre-owned route, but the best warranty you can get—without paying extra—will be the one that comes with a new car from the manufacturer.

  Latest Gizmos

  — The newer the car, the more modern the geeky tech that’s packed inside. Multimedia and navigation interfaces are constantly evolving and improving, so if you have to have the latest in gadgets (and don’t want to add them yourself post-factory) the selection will be better in the new-car showroom.

  Safety

  — As vehicle safety laws become ever more stringent, automakers are forced to change the way vehicles are built and the safety systems with which they are equipped. Some form of tire pressure monitoring is now mandatory on all vehicles sold in the U.S., and by 2015, stability control will be, too. Other technologies that are not mandated, like blind-spot monitoring systems, side curtain airbags, adaptive cruise control, and brake assist are becoming more prevalent on less expensive vehicles as their associated costs come down.

  Higher Fuel Efficiency and Lower Emissions

  — Again, partly thanks to Big Brother, cars are largely getting more fuel efficient, even while simultaneously getting more powerful. The newest crop of diesels is cleaner than ever before, and choices in the hybrid segment are growing, too, if that’s your thing.

  Financing

  — Banks offer lower financing rates on new vehicles because the vehicles are inherently worth more and have not already been hit by depreciation. Keep in mind that, when the lower APR still applies to a larger sum, your payments or total cost may still be higher. But if you plan to finance, check your deals before buying. The cheaper car might not turn out to be the better deal in the long run.

  Maintenance

  — Some new cars, mainly those from luxury marques, include free scheduled maintenance for a certain amount of time or mileage. This built-in cost saving should be considered in the final price analysis if applicable.

The following are the main categories of fees charged by dealers.

Vehicle Registration Fees

: This is the amount charged by the state to register the new car, assign a title (legal proof of ownership) and cover the cost of license plates. The dealer provides this service for you, saving you a trip to the DMV or registry. Usually, the more expensive the car is, the higher the registry fees.

Sales Tax:

Sales tax on a new car amounts to more than most people expect. For example, at 8 percent, sales tax on a $20,000 car will cost you $1,600. Cities and counties frequently add a quarter of a percentage point, so the amount you pay can vary within a state.

Documentation Fees:

Dealerships charge car buyers a documentation fee, or "doc fee," to cover the cost of preparing and filing the sales contract and other paperwork. In some states, the doc fee is limited by state law. In other states where doc fees are unregulated, dealerships may sell a car at an attractive price but then add a high doc fee to the contract. Review the chart below to see how your state handles doc fees. If your state does not limit doc fees, find out early on in the buying process what the dealership charges. If the doc fee is substantially higher than your state's average listed in the chart, negotiate the car's price more aggressively to offset this fee. And keep in mind, as tax expert Magyar points out, that dealers also charge sales tax on the doc fee.

In the chart, you will see the estimated average doc fees dealers charge in each state, based on figures supplied by the thousands of dealers participating. We've taken the data provided by those dealers, averaged it and rounded it up or down to the nearest $5. When you go car shopping, these estimates are a valuable guide to determine if a dealership is charging close to the average doc fee in your state.

Keep in mind that the doc fee is one of a number of factors affecting your shopping experience and your choice of a dealership. For example, if a salesperson is giving you especially good customer service, then a higher doc fee might be acceptable to you. If a dealership is giving you a very low purchase price, even after the higher doc fee, it would still be a net savings for you.

Taxing the Sale

While fees directly affect what you pay, taxes also affect your out-the-door cost. Here is how different states handle the taxes.

Rebates

: Customer cash rebates reduce the purchase price of the car. But Magyar says most states charge sales tax on the full purchase amount before the customer cash rebate is applied. For a $25,000 car with a $500 rebate that reduces the sale price to $24,500, you'll pay tax on $25,000. In the chart below, look at the column labeled "Are Incentives Taxed?" If there is a "Y" in this column, it means the sales tax is based on the car's price before rebates.

Trade-In:

In many states, if you trade in your old car, you can get a nice tax break. If there is a "Y" in the "Trade-In Sales Tax" column of your state, you are only taxed on the difference between the new car and your trade-in. So, if your new car costs $25,000 and you are getting $10,000 for your trade-in, you will only be taxed on the difference, or $15,000. If sales tax in your state is 10 percent, this will save you $1,000. If there is an "N" in the column, it means that you will pay tax on the full amount of your new car purchase, and the trade-in has no bearing on the sales tax you are charged.

Other Car-Buying Fees

There are two other car-buying fees that frequently arise and that buyers should know about:

Dealer Fees:

Some dealers write other fees into the contract and give them official-sounding names: "S&H" or "Dealer Prep" or even "Shipping." Find out early what fees you will be charged and negotiate accordingly. Before you sign the contract, ensure that no additional dealer fees have been added.

Advertising Fees:

Sometimes buyers look up invoice prices this is an actual charge made by the manufacturer to the dealer and you should pay it. However, some dealers will add an unofficial advertising fee into the sales contract, perhaps claiming they are offsetting the cost of their own advertising efforts. If you encounter this dealer-added advertising fee, you can challenge it or negotiate a lower purchase price on the car to offset the additional charge.

While this chart helps estimate fees, don't expect to calculate your final cost to the penny. This information as it is made available. Let us know if you come upon any changes.

How exciting is it to walk into a car dealership and drive out in a brand new car? That excitement can dwindle, though, if you don’t have the right paperwork and information with you. Avoid that roadblock and read our overview of what to bring when buying a car so you’ll be prepared and ready to drive off the lot.

Buying a New Car? Bring These Things

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