Buying a car at least once in our lives is the possibility we all can face. And one of the biggest concerns for anyone while buying a new car is how to save as much money as possible. At that moment, we are desperately in need of new car buying tips.
On top of that, there is a lot of stress attached to buying a new car. Indeed, talking to hundreds of people to find the perfect car and making sure you have the best deal for yourself and your family’s comfort is too much for one person to take.
But you are not alone in this – we will help you!
Below are the tips for buying a new car that will help you save money, and hopefully, these pieces of advice will help you stress less and be satisfied with the procedure.
1. Set up a budget
If you show up at a car dealership without having a price to spend in mind, you can easily be talked into paying a much higher price than you can practically afford, with a possibility that your new car doesn’t even cost that much.
On the other hand, conducting proper research about current rates and setting up a budget (based on the car model you are hoping to get) is something that will help you save a lot of money; it is a solid new car buying tip.
2. Do your research
A lot of people make this mistake: buy a car in a hurry because they need it urgently. Is your urgency greater than the significant amount of money you are losing in that deal? If not, then don’t make a rash decision.
Arriving at the car dealership without what kind of car you are exactly looking for is a rookie mistake.
Therefore, the best way to buy a new car is to do your research beforehand. There are a lot of online places you can go to look for the currently available car models within your price range.
While you are doing your research about car prices, “invoice” price is what you need to focus on, because that’s the cost price of a dealer. This will help you negotiate the car price when you are buying it.
3. Get pre-financing
Buying a brand new car isn’t easy, some people need financing. However, avoidable mistake buyers make is getting financing from the dealership, not knowing that financing from a car dealership is not fiscally responsible nor do they offer fair interest rates.
Banks or credit unions are your best options to look for financing options. Search your loan rates, which are always lower than dealership financing. Moreover, you can get “relationship discounts” from banks and unions, something you won’t get anywhere else.
Once you obtain financing, so you can show it to the dealership and just say no to them when they offer you their own financing.
4. You can’t always get a good deal
If you are at a car dealership and you aren’t 100% satisfied with the deal, don’t bother being there anymore. People make the mistake of paying a slightly higher price than they originally intend to because “the dealer is so nice,” “so much of his time is taken,” and “we have to make this deal work.”
Well, it’s the dealer’s job to give his time to potential customers, but if you don’t think that you are getting a good deal, no one is forcing you to buy it. Don’t hesitate to walk away.
5. Reassess your affordability
If you are buying a new car when your old vehicle isn’t paid off yet, you should reassess the fact of whether or not you can afford a new vehicle. You don’t want to be trapped in huge amounts of car loans.
So, it is advised that you wait for your current car to be paid off completely and you have complete ownership over it before you buy a new car.
A much more sensible option would be to at least wait for a year to get a new car after your current is paid off. In the meantime, you can put the money you used to pay your monthly payments in an interest-generating account.
So, after one year, you will enough money to afford a new car after selling your old car.
6. Negotiation is important
One of the most important points of this buying a new car guide is this: you need to negotiate with whatever you have when you are taking a car loan. Secondly, you need to be the last person to say “Okay, I will take this deal” when you are negotiating terms at a car dealership.
Don’t hesitate to start with a ridiculously low amount and work your way backward.
If you are obtaining financing from the car dealership, negotiation becomes even more important. For instance, if the salesperson offers you a 60-month loan option, ask them you want the same price in the 48-month payment option.
You need to be confident with whatever you are negotiating. And remember, again, don’t feel bad to walk away from any offers that aren’t satisfactory for you.
7. Don’t negotiate the payments, do the price
Car dealers will offer you installments that will go for forever, but you don’t need to be fooled by that. It is misleading. They are basically charging you a lot extra by making it look like a set of small payments.
For instance, get a 60-month payment if you have to, but if the offer is standing on a 72-month loan, it’s not a good deal, because then you are paying much more price.
So, remember, negotiate the “full price” you will be paying, not the months you will be paying the amount in.
Moreover, don’t forget to ask for the breakdown for whatever you are paying. They can charge you for hidden costs, various taxes, delivery charges, and such ridiculous payments. And you will never know it unless you ask.
8. Don’t take add-ons
Add-ons are another thing that dealers make money off and they aren’t really necessary for you. When the car deal is done, a dealer would offer you add-ons, such as a car alarm, car mats, and other things.
These small things will easily cost you a couple of grand.
Just say no to them. If you need them in the future, you can always buy them at a much cheaper price from the market.
Buying a car is one of the most important expenses that occur in your lifetime. To make sure you just hand over your hard-earned money to a car dealer on some made-up cause, it is important that you keep the aforementioned tips in mind and be careful about the financial facts when making a purchase. Good luck!