7 Tips to Save Money on Car Buying
1. Create a budget.
How much can you afford? Before you start the car-buying process, create a budget. It will give you a realistic picture of what you can afford (or not afford) to spend on a new car. You may want that brand new truck, but your budget says that's not a good idea, at least not right now. When creating your budget, look for ways to cut expenses such as limiting your spending where you can. Also, don’t forget to include other car-related expenses such as insurance, maintenance, and gas that goes along with car ownership in your ‘new car budget’.
2. Do your homework.
Take the time to look for the vehicle that best meets your needs and budget. It will be time well spent. Research the market value, car dealerships, and compare prices to help you narrow down your choices. Pay attention to the suggested retail prices and the invoice prices of the cars you think would be a good fit. Also, look for incentives, discounts, and rebates that car dealerships offer to entice customers to buy. If special discounts aren't advertised, ask about them anyway. Check out our Auto Dealership Locator to find a local dealer in the Midlands.
3. Best to time buy.
If time is on your side, consider purchasing at the end of the month. This is usually an excellent time to buy because salespersons are trying to meet their quotas. They're likely to reduce fees and maybe add a few extras to close the deal.
4. Don't be afraid to haggle.
Be willing to negotiate the sales price. Knowing the car's value may give you the leverage to ask for a price reduction by several hundred dollars. Doing your homework first will certainly help you during the negotiation process (refer to item #2 again in this list). If you're not satisfied with the price, be willing to walk away.
5. Financing options.
Shop around for the best financing options. There are many financing programs available through financial institutions and car dealerships. Apply at several to compare interest rates before you settle on one. Also, make sure to apply within two weeks so the inquiries can count as one transaction on your credit report.
6. Avoid extra add-ons and fees.
Do you really need a luxury package with the sunroof and leather/heated seats? Probably not. These add-ons are nice, but they can quickly skyrocket your final cost. Consider the base model with limited features to help keep your cost down. Don't allow yourself to be tempted by unnecessary upsells and add-ons. Also, carefully review the itemized bill for dealership fees. You may notice different fees such as paperwork, advertising, delivery, or dealer prep. Don't hesitate to negotiate or request a waiver of any unnecessary charges.
7. Think outside the box.
Car rental agencies like Enterprise, Alamo or Hertz not only rent cars, they sell them too. They usually offer deep discounts to purchase their rentals cars after one to two years of service. These cars are usually in good condition because the companies take careful measures to maintain them for the safety of their customers. And are often sold online with little room to haggle.
To buy or not to buy? You may be skeptical about purchasing a car during a pandemic, and rightfully so. However, you could save money and comfortably enjoy your new ride with proper planning and the willingness to take a different approach to your car buying experience.