Saving money should be one of your constant priorities. This is why you’re budgeting, tracking your money and checking your credit report. A car purchase can be a drain on your budget, especially if you weren’t able to save for it. So, you need some strategies for saving money on your car purchase.
7 Secrets to Saving Money on Your Car Purchase
Timing is Everything
You might see sales advertisements throughout the year, but most of these are not really sales. However, there are certain months during the year when retailers seriously markdown prices. For the car industry, prices tend to drop during the months of December and January. If it’s not an emergency, try to wait until the end of the year to make your car purchase. The new year’s models have already arrived on the lots and dealerships are anxious to make space.
Saving Money on Your Car Purchase Requires Research
The internet is a great resource for doing advance research on any product you purchase, including cars. Before you head out to your local dealerships, do some research online. Check out the reviews on the models you are thinking of purchasing and look into reputable online resources, such as Kelley Blue Book and Car Gurus that provide reviews and market prices. Then you will be armed with tools for negotiating (see below). The more information you know ahead of time, the more money you will save.
The internet is also great for finding dealerships in your area. Once you’ve done your advance work and know what kind of car you want, check out the prices offered by the dealerships near you. You can even screen capture their pages to take with you when you go out to buy. Sometimes the dealership will advertise a different price for the same car on their website and their lot. You want the lower price. Saving money on your car purchase requires you to be proactive and assertive.
Don’t accept their price offer. The way to save money on your car purchase is to negotiate. If you do your research first, you will be in a position of power to negotiate the price that works best for you. This includes dealer fees, which are not fixed like title and registration fees.
Don’t be afraid to look out for your own financial interests. At the end of the day, the agents want to make a sale. They’re trying to get as much money from you as possible. You want the best deal for your budget. You have competing interests, but haggling is not going to turn them off. This tip could save you thousands of dollars on your car purchase.
Go for Used and Only Buy What You Need
A new car is not a necessity. It may look great and impress your friends, but why waste the money? And don’t forget, your monthly car expense includes more than the car payment. You also have maintenance, gas, and insurance.
A better option is a one or two-year-old leased car or a slightly used car from a reputable used car dealership. The advantage of a formerly leased car is that you know it will be in good condition and the mileage will be low.
Get Your Financing Ahead of Time
It’s better to show up at the dealership with financing in hand. Before applying at your bank or online, you should check your credit report. You don’t want errors or identity theft to keep you from the best financing terms. If your credit score is not so good, you might want to wait and work on repairing your credit score. We’ve got lots of tips to help you with this.
When you go to the dealership, you will already know what kind of financing you can get. See if the sales staff can do better.
Watch Out for Those Fees and Add-Ons
Before you agree to anything, check the small print. Ask for an itemized bill of all the transaction costs. The fees such as conveyance charge, dealer prep, and advertising are negotiable even if they tell you they are not. Stand your ground and threaten to leave if they don’t show flexibility.
The same goes for the various add-ons. The sales agents will try to convince you that these add-ons are vital, such as tire protection plans, extended warranties, paint protection plans, and gap insurance. Even though each item is presented to you as a small monthly charge, collectively, they add up. Ultimately, more money will be going from your monthly budget than you can afford. This is another reason you want to do all your research ahead of time, including finding the most affordable insurance coverage.
Bottom line: Do your research, prepare, be assertive and take advantage of all money-saving opportunities.