10 Ways to Save Money on Your Next Car Purchase
Are you in the market for a new vehicle? Do you have a plan for your next car purchase?
Getting a new car is an important financial decision – even more so when you have the luxury of planning out your car purchase ahead of time.
A crucial factor that must be fully considered is the method that you will use to pay for your new car.
For example, some people choose to finance their vehicle through the dealer, while others apply for a loan through their credit union or bank.
Alternatively, some car buyers prefer to pay cash in full so that they can own their vehicle outright while avoiding monthly car payments.
Save money on your next car purchase by keeping the following tips in mind:
1. Skip the loan and pay in cash
If it’s possible, paying in full for your car using cash can save you a significant chunk of money that you would otherwise spend on interest alone.
Additionally, some dealerships also offer cash discounts to customers, as well.
2. Compare prices at multiple dealerships
If nothing else, shopping around at several dealers will at least give you an idea of what you can expect to get for your price range – and an advantage when negotiating, too.
3. Research your car ahead of time
Before you head out looking for a car, private party or dealership, make sure you know the market value of the vehicles that you want.
The easiest way to do this is to research the Kelley Blue Book price for each make and model. You may also want to check out the Consumer Report for the car, as well.
4. Choose used over new
Buying a car that is several years old will give you the opportunity to get more of the features you want at a lower price.
5. Don’t be afraid to negotiate
It never hurts to negotiate the price of the car, especially if you notice any minor flaws. Most of the time, you can lower the price at least several hundred dollars by simply knowing the value of the car and being willing to walk away if the price isn’t right.
This applies to both car dealerships and private individuals.
6. Use your old car for trade-in credit
Many dealerships will allow you to trade-in your old vehicle for a credit toward the new vehicle sale – some will even accept a trade-in for the down payment.
7. Be aware of the entire cost
In order to save money when buying a car, it’s very important to make sure you factor in the entire cost.
This includes the interest rate, extra features, insurance and registration. Although it may seem you’re saving money when you look at the monthly payment, you may be getting charged more once the interest rate is factored in.
8. Remain patient in your search
Starting your search with the mindset that you’ll drive home in a new vehicle that same day is one of the worst things that you can do when it comes to trying to save money when buying a car.
It can lead to an impulse purchase, which is almost always synonymous with spending more money.
9. Compare financing programs
Just like different dealerships will have varying prices on their vehicles, you will find financing programs that are better than others.
Plan on having at least three options to compare before settling on one.
10. Read the fine print on the loan
It’s crucial to make sure you won’t be subject to penalties for paying off your car faster.
On a final note, it’s also important to go to the dealership with a plan. Know ahead of time the type of upgrades you’re interested in so that in the excitement of buying a new car you don’t allow yourself to agree to unnecessary up-sells and add-on packages.
You will find it easier to save money when buying a car if you already have a well thought out plan in place.
Do you have a plan in place when heading into your next car purchase?
Photo credit: Lawrence Whittemore via photopin cc