Buying a car is a crucial financial decision, especially when you have the pleasure of planning out the purchase in advance. The most critical factor to be considered is the financing method you will choose to pay for your car. Moreover, lots of potential buyers get overwhelmed by the numerous best car deals available. We have put a guide on how to save money when buying a car to help you make an informed decision when purchasing your next vehicle.
1. Do Your Research First
Before you go ahead to purchase your car, or look for a suitable dealership, ensure you understand the market value of the vehicle you want. That way, you can know what entails a good deal for yourself instead of taking the dealer’s word.
Use trustworthy available resources such as the Kelley Blue Book app to check a car’s fair value, reviews, and you may find an affordable quality car as low as under $20,000.
2. Buy a Used Car
A new car loses 20% of its value to depreciation once it leaves the dealership. While purchasing a new car may seem like a significant financial flex, it is also a big waste of money. The best-used cars to buy are the previously leased cars that are a year or two old. Drivers driving leased vehicles are expected to maintain the condition of the vehicle while keeping low mileage.
It does not imply that you should lease. Leasing will not make sense financially in the long run. Buying a used car will give you the chance to get more attractive features you desire at a low cost. Before making a final purchase, ensure the vehicle is legitimate. Research the previous owners, usage, and maintenance using the Vehicle Identification Number (VIN).
3. Don’t Be Afraid to Haggle
When you walk into a dealership, get ready to negotiate. Several buyers try to avoid confrontations, even if it means saving them hundreds or thousands of dollars from the final price. If possible, go to different dealers, do your research on the exact car you want, and carry proof to give you an upper hand during negotiation.
Negotiate the unwanted fees, such as ‘key insurance,’ window etching, and delivery. The hidden costs can all be waived at the dealers’ discretion, and you’ll end up having saved a few thousand bucks.
4. Consider Buying with Cash
It is a desirable goal to set on your own, right? Maybe you don’t like the idea of paying down payment for a car and subsequent monthly charges. Buying with cash is a good idea due to certain benefits. You will use less if you pay upfront. By skipping the financing process details, you will save yourself lots of money in interest payment throughout servicing the loan.
Chances are you will get a rebate if you pay in cash, which unlocks discounted prices. If you buy a used car with cash, you have the leverage to negotiate for a lower price. Companies also randomly give discounts, such as for recent college graduates or even an ex-military.
Finally, buying with cash forces you to make critical decisions. You will be forced to prioritize your spending. The reason is you will be self-debating the importance of certain features of your vehicle.
5. Check Your Credit
You will come across different financing programs with varying terms. You should have at least three options with you for comparison before you settle on the better one. Most financial programs will require a credit check to determine your eligibility for the loan.
Please go through the loan agreement’s fine print, since it is vital to ensure the financer will not subject you to paying off your vehicle faster.
Where to Get a Free Credit Check
A credit report displays your current debt and any other financial information. The higher your score, the lesser your interest rate will be for your car loan or credit card. Get a free credit report annually from TransUnion, Experian, Equifax.
The report does not entail your credit score. If you need a free credit score check, take a look at your credit card statement. You can also purchase it from a credit reporting bureau. To increase your chances of getting a higher car loan, you should improve your credit score.
6. Choose an Appropriate Time with Special Deals
The best time to purchase a car is in December or January in the States. By fall, new vehicles for the following model year are manufactured. Consequently, dealers remain with previous year’s cars that they are looking to dispose of their lot. Purchasing a car in January or December can save you almost a 7.7% discount.
When Spring comes, prices increase since buyers consider enjoyable road trips and are looking to spend their tax rebates.
It is wrong to start your research with the mindset that you will drive off the dealer’s with a new car, especially if you are trying to save money. It will lead to impulse buying, which will deny you a chance to enjoy rare special deals. Check with dealers regularly for special used car deals that will save you loads of money.
7. Resist from Trading In
It is not convenient to trade in your value car as a down payment since you will be losing lots of money from your current car’s value anyway. Selling the car on your own, on the other hand, will give you extra dollars higher than the value of using the trade-in as a down payment. Once you sell it, you can use the extra cash as a down payment for your car, and you could be left with more money to offset the first few monthly installments.
Above all, please do not consider your car as an investment, since it is a depreciating asset. You want to buy the most affordable, efficient, and roadworthy vehicle you can find. Do your research at home before you visit the car dealers. Keep in mind the available and most suitable financing options. Once you get your car, proper maintenance is also crucial to avoid regrets and loss.