The Ultimate Car Buying Checklist: Everything You Need to Buy a Car in 2025

by Justin Fischer | Last updated Feb 6, 2025 | Car Buying, Finance & Insurance, New Cars, Trade-in, Used Cars

Buying a car is a big decision, and preparation is key. Whether you’re purchasing a brand-new ride or hunting for the best used car deal, having the right documents, financing, and negotiation strategy in place will save you time, money, and stress.

So, what do you need to buy a car? From essential paperwork to must-have research, this car buying checklist walks you through everything step by step. Let’s dive in.

New Car Buying Checklist: What You Need to Buy a Car

If you’re buying a brand-new car, you’ll want to ensure you have the right documents, financing, and tools before heading to the dealership.

Documents & Information You’ll Need

Before you buy a car, make sure you have:

◻ Valid Driver’s License – Required for test drives and financing.

◻ Proof of Insurance – Most dealerships require insurance before you drive off the lot. Call your provider to add the new car or get a quote beforehand.

◻ Credit Score – It’s smart to check your credit score before heading out to buy a car. Higher credit scores qualify for the lowest interest rates. Check yours for free with tools like Credit Karma or Experian.

◻ Proof of Income – Many lenders require recent pay stubs or tax returns, especially for lower credit scores.

◻ Proof of Residency – A document with your name and address, such as a utility bill, lease agreement, or bank statement, may be needed for financing approval.

◻ Trade-In Documents (If applicable) – Bring your vehicle title, loan payoff amount, and extra key fobs if you may be trading in your current car.

◻ Pre-Approval Letter (optional but recommended) – Getting pre-approved for an auto loan gives you negotiating power and prevents last-minute surprises.

Research & Preparation Checklist

Before signing the dotted line, do your homework:

◻ Set a Budget – Know the total cost of ownership, not just the monthly payment. Don’t forget insurance, maintenance, and fuel costs.

◻ Compare Prices – Use tools like CarEdge Insights to see what others are paying for the same model in your area.

◻ Check Manufacturer Incentives – Automakers frequently offer 0% APR, cash rebates, or lease specials for select models. See all of this month’s best offers at the CarEdge Deal Hub.

◻ Request an Out-the-Door Price Quote – Always get a detailed breakdown of pricing, including dealer fees. Wondering what to expect? Use this free OTD calculator to run the numbers. 

◻ Review the Warranty – Know what’s covered and for how long. Some warranties are better than others. Consider an extended warranty for added peace of mind. 

◻ Shopping EVs? Know What to Expect – EV ownership is different. Review our free EV Buyer’s Guide for all of the details.

✅ At the Dealership: What to Watch Out For

◻ Beware of Markups & Add-Ons – Dealerships often add unnecessary extras like nitrogen-filled tires, VIN etching, and “protection plans.” You don’t have to agree to these add-ons!

◻ Negotiate the Out-the-Door Price, Not Monthly Payments – Dealers love to talk in terms of monthly payments to hide extra costs. Don’t fall for it! Focus on the total out-the-door price instead.

◻ Review the Loan Terms Carefully – Avoid 84-month car loans that keep you upside down for years. Even 72 month loans increase your risk of negative equity, which can make it hard to sell your car in the future.

◻ Don’t Sign Until You Understand Everything – Take your time. Have a close look at any contracts and agreements. Ask questions. Walk away if needed.

Used Car Buying Checklist: What You Need to Buy a Used Car

Buying a used car requires extra steps to avoid hidden problems and costly surprises. Here’s everything you need to check before making a purchase.

Documents & Information You’ll Need

◻ Valid Driver’s License – Required for test drives and financing.

◻ Proof of Insurance – You’ll need to insure the car before taking it home.

◻ Credit Score & Pre-Approval (If financing) – Be familiar with your latest credit score before shopping. The best credit scores qualify for the lowest rates. Compare rates from local banks and credit unions before you head to the dealership. Big banks rarely have the best auto loan rates.

◻ Method of Payment – Have a plan for how you will make your down payment if you decide to purchase a vehicle. There are limits to how much you can charge to a credit card, usually less than $5,000.

◻ Trade-In Documents (If applicable) – Have your title, loan payoff amount, and registration ready.

Used Car Research & Pre-Purchase Checklist

Don’t get burned by a bad used car. Do this first:

◻ Check the Vehicle History Report – Use Carfax or AutoCheck to check for accidents, title issues, and odometer fraud.

◻ Look Up Market Value – Use tools like CarEdge Insights to compare prices and see negotiability.

◻ Verify the Car’s Title – Avoid cars with salvage, rebuilt, or lemon titles.

◻ Get a Pre-Purchase Inspection (PPI) – Have a trusted mechanic inspect the car before you buy.

◻ Review Maintenance Records – A well-documented service history is a good sign of a reliable car. This is especially useful when buying from a private seller. 

◻ Check for Recalls – Use NHTSA.gov to check for unfixed safety recalls.

Used Car Test Drive & Inspection Checklist

Test driving isn’t just about comfort – it’s about catching problems:

◻ Check for Odd Noises – Listen for knocking, grinding, or whining sounds.

◻ Check for dashboard warning lights – Never buy a car with warning lights on. This indicates that repairs are urgently needed. If tire pressure is low, make sure the warning light turns off once air is added. 

◻ Test Acceleration & Braking – Make sure the car accelerates smoothly and brakes firmly. Brake replacement costs hundreds of dollars.

◻ Inspect for Rust or Frame Damage – Look under the car and in wheel wells for rust spots. Once rust starts, it’s hard to stop it.

◻ Check Tire Wear – Uneven tire wear may indicate alignment or suspension issues.

◻ Test All Features – AC, heat, lights, windows, seat adjustment, infotainment system – make sure everything works.

◻ Remember to get a Pre-Purchase Inspection with an independent mechanic before you buy. It’s a hassle, but could save you thousands of dollars in unexpected repair costs.

✅ At the Dealership or Private Sale: Final Steps

◻ Negotiate the Out-the-Door Price – Use market data to get the best deal.

◻ Review the Bill of Sale – Ensure it includes price, VIN, mileage, and all seller details.

◻ Complete the Title Transfer & Registration – Each state has different requirements. If you’re buying a used car from a private seller, consult your state’s DMV website for instructions.

◻ Double-Check for Fees & Add-Ons – Avoid unnecessary dealer “processing fees” or bogus charges. These are the only legit dealer fees.

◻Finalize Financing & Insurance – Ensure loan terms are correct before signing, including the APR and loan length. Even during the final steps of the car buying process, it’s not too late to correct mistakes or tricky dealer add-ons.