Are you looking to buy a new car? Do you have a plan for your next car purchase? Getting a new car is an important financial decision. You have to plan for your car purchase ahead of time. One of the important decisions to make is to decide how you want to pay for your new car. You may choose to seek a loan from your bank, other financial institution, friends or family to finance the purchase of the car. However, if you have saved enough money towards the purchase, you may choose to pay for the car outright, without contracting a loan.
Whichever option you choose, you can save money on your next car purchase by keeping the following tips in mind:
1. Research your car ahead of time
Before you head out looking for a car to purchase, make sure you know the market value of the car that you want. The easiest way to do this is to research the price for each make and model you are considering. You may check out some reviews on YouTube and other car review websites.
2. Choose used over new
Buying a used car could get you all features and specifications you want at a lower price.
3. Try to skip the loan and pay from your savings
If it’s possible, paying for your car from your savings to save you a significant chunk of money that you would otherwise spend on interest alone. Additionally, the dealership may offer you discount on payment in full.
4. Compare prices at multiple dealerships
If for nothing else, shopping around at several dealerships would at least give you an idea of what you can expect to get for your price range – and an advantage when negotiating, too.
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 buying from both car dealerships and private individuals.
6. Use your old car for trade-in credit (or sell it for additional money)
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. If not, sell your old car for some money to top up your savings for the new car.
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 packages
Just like different dealerships will have varying prices on their vehicles, you will find financing packages 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.