The credit market is tightening every day. Vehicle sales are hitting record levels and buying a car has become no simple decision. The many decisions involved, including budget and running costs, would twist your stomach into knots. However, walking in and facing the dealer, as an informed, empowered consumer will help you save more money. So, on to the tips… here are the 5 ways you can save money when buying a new car:
Buy During the Off-Season
Car sales season begin in May. If you can hold off on buying the car you are eyeing until later in the year, it can pay off in savings. Most dealers prefer to offload the previous year’s cars from November right through to February, and of course at a substantial discount. This is the right time to beat the dealers on their “home advantage” and win the shell game.
New versus Used
If you thought a vehicle is an investment, think again! Vehicles depreciate quickly. When you buy a new car, expect it to continuously decrease in value by 25-40 percent within the first two years. So the trick is simple—let someone else take the initial 40 percent hit and buy a slightly used car that is a year or two old. In the past, there was a good reason to buy new – warranty. Today, it’s possible to find a car with a longer warranty that’s still in effect a few years after initial purchase.
Do Research, Determine a Fair Price and Compare Quotes
Spend some time researching what you want before setting foot on your local car lot. Know the price you are looking for and the type/size of car you want. Go to about ten or so car dealerships to help you compare cars and narrow down to two or three viable possibilities. Remember this only covers the car and how it drives, but nothing to do with the price. This is where you now need to involve Consumer Reports. They’ll probably charge you $20 for a service that reviews pricing for a specific car (new or used), including what add-ons actually cost the dealership, and what the average price per vehicle is in your geographical area. This information will give you an insight into what to expect in your negotiation.
Pit Dealers Against Each Other
The goal here is to start a bidding war for your business. Settle on the make and model you want, and then contact a handful of dealers via the Internet. Let them know what you want and when you want to buy. Be very specific about the car you want – color choices, features, and specifications. Then ask for their price including all dealer fees. If the financing subject comes in, tell them you will deal with this later and are only interested in the price, not monthly payments. Ensure each dealer knows you are talking to the other dealers, and plan to give the sale to whoever cuts you the best deal.
Put Some Payment Down
Buying a car involves a lot of incentives. While it’s possible to put yourself in, and walk out of the car lot with a brand new car of your choice with no money, you had better watch out! Don’t let the joy of owning a car override your decision-making. Remember, vehicles depreciate rapidly. Financing the full purchase price will leave you upside down on the loan immediately. This means that you shall owe more than the car is worth. When you purchase a new car, there are taxes and other fees that go with it. They are often rolled into the loan if you put nothing down, so immediately you drive the car off the lot, you actually owe more money to the dealership or bank than the car is actually worth.
What tricks do you have when it comes to buying a car? Comment and let us know!