Buying a car is one of the most significant financial decisions that you’ll make in life, and because it is so important, you want to make sure that you are getting the best deal possible! With the abundance of options and models available, the prices are just as varied.
When you are in the market for a new vehicle, there are several ways to ensure you get the perfect car for the best price possible.
For tips on how to save money while shopping and buying a car, keep on reading.
1. Determine What You Need in a Car
Before you start your buying journey, it’s important to determine what elements are essential in your new vehicle so you can shop within those constraints. Consider all the options, and make a checklist of what you require based on your budget and lifestyle. Ask yourself the following questions:
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- How much room do you need in the vehicle?
- Do you need the car to do anything specific?
- Is this car for work applications or for personal use?
- Will you use the car for short metropolitan drives or longer highway travels?
- Is gas or diesel a better option for you?
- Do you or your passengers need special requirements, such as space for sports equipment, pets, or mobility aids?
- What is the weather like where you live— would a 4×4 or a convertible be more suitable for the climate?
- Do you want an eco-friendly car, such as an electric or hybrid vehicle?
2. Decide on a Budget
One major mistake that many people make is getting wooed by the appeal of a car just slightly over budget. Ensure that you do not fall into this trap—determine your affordable budget and stick to it! Don’t let yourself get talked into paying more.
Experts recommend shopping between 10% and 20% less than your actual budget. So, if you budget $5,000 for a car, tell the dealer that you have $4,000 to spend to give you some wiggle room for any accessories or extras that may not be included.
3. Choose Between a New or Used Car
While driving a shiny, new vehicle might be tempting, you can often get better deals on a used car. Don’t stress too much about a used car’s condition —especially if you buy from an accredited dealership. Cars there go through rigorous quality testing.
4. Be Aware of All Costs
On top of the vehicle’s overall price, make sure that you understand all the hidden charges that come along with it. Between closing costs and depreciation, being aware of any extra fees will help you budget accordingly and save you money in the long run. For example, some older vehicles might require more maintenance than newer models. So weigh the maintenance costs with the price of a new vehicle and determine which is best for you.
It’s important to make a checklist of all the possible costs to supply yourself with as much information as possible, so there are no hidden fees. Some of the expenses to add to your list include the following:
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- Any Upfront Costs
- Car Insurance
- Commute Route Tolls
- Fuel Prices
- Parking Permits
- Repayments
- Servicing
- Various Other Costs
- Maintenance Costs
5. Shop Prime Discount Times
Many large car dealers have a 60-day stocking policy—they keep cars on the main lot for a couple of months before they either move them into the back or pass them onto a car auction to sell. If you shop around that 60-day timeframe, discounts are likely.
Like the 60-day rule, shopping at the end of the month typically yields larger savings on cars. Because new stock tends to arrive at the beginning of the month, dealers want to make room for the new ones. That means major vehicle discounts!
6. Compare Prices
Potential car buyers should always shop around before making a final decision. Compare prices, deals, and any additional discounts that dealers are willing to make. You can take a proposed price to a competitor to see if they will match the offer.
7. Compare Financing Programs
Like how different dealerships will have varying deals and prices for buying a car, compare multiple programs if you go down the financing route. You can land great deals or lower interest rates when you shop around.
Experts tend to recommend having at least three final options for financing programs to compare before you settle on the winner. Look for additional perks, limited-time offers, and ask for a better deal if you’ve been quoted a lower price elsewhere.
8. Be Brand-Flexible
When shopping for a vehicle, it’s essential not to be too fixated on brands. Instead, you should look for all the things you want most in a car, such as size, engine, and color. This can save you money, especially if you opt for a less popular or lesser-known brand.
But if the brand is important to you, research the ones that hold the most value after purchase. Even if you plan to keep the vehicle for several years, a brand that keeps its value will be good when it comes to selling. Top valuable brands include:
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- Mini-Cooper
- Audi
- Volkswagen
- Lexus
- Ford
9. Downsize
Another way to save money on a new car is to downsize. This doesn’t mean you have to buy a tiny 2-seater, but perhaps an 8-person minivan is not the right choice for you.
This also applies to accessories—opt for less luxurious extras to save some cash. Getting a vehicle with all the bells and whistles would be nice, but keep your budget top of mind. While you might want seat warmers, getting a model without them can be cheaper. Plus, you can always purchase a third-party seat heater from Costco or Amazon later!
Determine which extras are essential and which are luxury. There’s no issue with adding accessories to your vehicle, but if they drive the cost up too high, it may be time to say goodbye for now. Floor mats and trunk liners are more practical than a car movie system.
10. Consider a Reputable Dealer
You can often find cheaper vehicles for sale by private sellers, but consider buying from a reputable, AAA-approved dealer. By trusting your car purchase to an accredited dealer, you remove the possibility of caveat emptor. (Caveat emptor is a principle saying a buyer purchases a product at their own risk, meaning they are responsible for checking the quality of a product before the transaction occurs.) You can still get some great deals from car dealerships, and the vehicles will be thoroughly checked and vetted, even if they are used. Opt for peace of mind!
11. Learn How to Negotiate
Experts encourage all car buyers to negotiate the price—it doesn’t hurt to try! If you know the model’s value and its condition, you can often lower the cost by a couple of hundred dollars, particularly if you’re willing to walk away if the price isn’t right.
And when it comes to extras and accessories, haggling is a great way to keep your costs down. Barter for services or care packages and dealer-fitted extras. It will be worth the end purchase price of the car for the salesman, and you get some freebies.
12. Cash In on Your Current Car
Either by selling your old car privately or trading it in for credit, you can knock some of the price off a new vehicle. Some dealerships even accept a vehicle trade-in as the down payment on a new car.
13. Get Gas Smart
One cost that you won’t be able to avoid is paying for fuel. Research petrol prices to determine whether it’s cheaper in the long run to buy a gas or diesel vehicle. Find local gas stations with rewards points for filling up your tank or cash-back credit cards.
Additionally, some smaller engine cars can be cheaper. The choice between 1-litre and 2-litre engines is not solely about horsepower—larger engines tend to burn much more fuel than a small engine, so economizing your engine size can save you fuel fees.
The market for used cars is great for sellers right now, so if you want to sell your ride, now is a perfect time. But remember when you purchase your new ride to keep these items in mind to save you time and money.