When it’s time to buy a new car, you don’t want to spend more than you can afford. By following some simple tips, you can still find the vehicle you want, without blowing your budget or savings.
We’ve all experienced it. You walk onto the car lot and suddenly feel intimidated by the pushy salesman. Before you know it they are throwing all of these numbers at you and you end more confused than ever. When you get home, you really look and it wasn’t the deal you thought you were getting. Enter – buyer’s remorse.
Outside of your home, a car is one of the biggest purchases you will make. It is important that you walk in educated and ready to work a deal that actually is a deal. We’ve got some tried and true tips that you can use yourself to make sure that you get the right price, right vehicle and best loan for you!!
HOW TO SAVE MONEY BUYING A NEW CAR
Know a fair price
Before you head out, do your research. Find the type of vehicle(s) you want and then find out what the average price is close to where you live. You can use online tools such as TrueCar, AutoTrader, Cars.com or Edmunds to find out prices close to where you live. Keep in mind that prices actually vary and you may be more (or less) depending upon where you live.
If the option is available for you to drive a different city where the prices are lower, you might take that into consideration and plan a road trip to look at that vehicle. Doing so really could save you hundreds, possibly thousands, on that next car.
This not only applies to the vehicle you plan to buy but also the trade-in value of your vehicle. You certainly do not want the dealership to give you less than what your old car is worth – as you will end up paying more.
Shop at the end of the month (or quarter)
Salespeople at dealerships have monthly quotas. When the end of the month or quarter comes around, they are more willing to negotiate the rates in order to make the sale and try to reach those monthly goals. Try to shop within the last seven days of the month and you may get a better deal.
New isn’t always better
Many millionaires will admit that they do not own brand new vehicles. They are smart and purchase ones that are at least one, two or even three years old. This not only saves you the initial depreciation costs when you drive it off of the lot but will also save on insurance and personal property taxes (as applicable).
Check insurance rates before you shop
There is nothing worse than purchasing a vehicle to find out that your insurance premiums are very costly. Contact them before you head out with the types you have in mind so that they can provide you with an accurate quote. This may actually sway your decision when shopping for one vehicle over another.
Pass on the add-ons
Sales people will always try to sell you on the extended warranty or upgraded “gadget”. Always say no. These are not worth the cost in most instances and is just a way for you to pay more than you really need to.
Pre-arrange financing (or pay with cash)
Talk to your bank or credit union before you head out and find out if they would be able to provide your financing. You may find that you can score a better rate than what is provided by the dealership. Of course, if you are able to, paying cash for your vehicle is the best option – as you never have to pay a penny in interest.
If you have paid off your car previously, continue making the monthly payment to yourself. That way, when it is time to buy a new car, you can pay cash and skip financing completely.
Watch for rebates
If you are opting for a brand new vehicle, check for the rebates. A great resource for finding out the best rebates and offers on vehicles is Edmunds. You never know what you will find!
Know how to negotiate
Salespeople do not speak in vehicle pricing, but rather monthly payments. They will say things like “this car is just $350 per month!!” — but they fail to share that you will pay that for seven years! That also does not take into consideration your credit score or even your trade-in value (be it negative) — which will absolutely affect your monthly payment.
They may also throw in the rebate or cash back offer into the price, so make sure you do the math and check it out before you visit the dealership. You do not want to overpay for a car — ever!
Don’t allow emotions to take over
When you walk onto the lot, don’t let the fancy bells and whistles come into play. Know your budget and stick to it and don’t let the salesperson bamboozle you into buying something you can’t afford.
Buy the same brand again (at the same dealership)
Sometimes, dealerships reward repeat customers by offering additional discounts when they shop. If you own a Toyota and go back to the same dealer who sold it to you, they may be a bit more willing to negotiate or offer additional incentives as a thank you for your repeat business.
Bring along your ID
If you are a student or military (current or prior), you may be entitled to additional discounts. Check with the dealership before you start looking, as that may be a deciding factor when determining where to shop.
Get a better interest rate
If you didn’t have the time to get financing or want to finance through the dealership, haggle the rate. If you have good to excellent credit, they may be able to cut you a better deal. Check your credit score before you shop through a free site, such as Credit Sesame, so you’ll know before you walk onto the lot.
Now that you have these tips in your back pocket, hopefully, your next car buying experience is a good one…..and you get the deal you deserve!!