Fall is a great time to buy a car, the body styles for the next year have been announced and if there is a change in sheet metal that usually means HUGE discounts for people looking to buy. In addition to the fall being a great time to buy, it’s also a time that families are left looking for new cars, whether it’s kids going off to school and taking a car with them, or high school students wanting to drive the family car to school the fall is definitely a time of year that leads people to their local car lots. In this post we’ll cover 7 tips that you can follow to save money as you head out car shopping.
First, always buy used. A brand new car depreciates by hundreds of dollars for just driving it off the lot. By the end of the first year, you’ve often lost a couple thousand dollars on the vehicle. By the end of the second, you’ve lost even more.
The first couple years of paying off your car (assuming you got an auto loan to help purchase it) are spent simply paying extra for something that likely isn’t worth as much as you owe on it. It’s called being upside down in a vehicle. That’s just not worth the hassle. Not to mention the fact that if you end up needing to get an auto title loan sometime in the future when your vehicle is paid off, that’s a lot less equity you’ll have available to use.
Purchase your cars used instead. Getting a vehicle that’s 2-3 years old will depreciate less quickly and only have about 30,000 miles on it. You could easily own the car for the next ten years, allowing you to completely pay off the loan (which was significantly cheaper) and enjoy the vehicle without debt for a while.
The quality of the car is generally still very good, even if it is used. There’s no question that it’s a more affordable purchase.
Second, determine how much you can afford to spend before you begin shopping. Take a look at your budget. How much can you afford to comfortably spend monthly? How much do you have saved up right now for a down payment/taxes/registration? Write these numbers down and commit to yourself that you won’t go over them. It’s easy to get enthralled with the look and feel of an out-of-budget vehicle and justify the loan. Those that do that though suffer for the coming years and often regret the decision when they can’t afford things they want.
Third, shop around for a loan and insurance. Don’t feel like you have to stick with a certain insurance company or bank. If you can get cheaper prices elsewhere without reasonable restrictions go to them. Fully investigate the company for quality and reliability before signing. You can often lower your total financial responsibility at the end of the day by shopping around.
Fourth, don’t settle for long-term, low monthly payments if you can afford it. The longer it takes to pay off the loan (at softer monthly payments), the more you’ll end up paying in interest. The short-term loans will require a bigger chunk of your paycheck every month, but they’ll get you out of debt faster, and you’ll spend less in interest than you would have otherwise.
Fifth, talk to insurance companies about what aspects of a car will raise or lower their prices. Insurance companies charge more to insure cars that are stolen a lot, are newer, are more expensive, etc. Each company has its own price range for these kinds of things. Ask them what kinds of cars are the cheapest to insure. Find out those characteristics and begin searching your local listings/car lots for cars that meet those descriptions. This will save you money in the future.
Sixth, always check the Kelley Blue Book rating on a car before you purchase it. Ole Kelley can give you fair estimates on a vehicle no matter its condition. Learn the values for the vehicles you’re looking at and bring that price up in your negotiations. If the seller isn’t willing to meet Kelley Blue Book’s price, seriously consider walking away from the deal. There are so many cars on the market that you could get just as good of a car for a fairer price.
Seventh, look for rebates and incentives. Car lots abound across the United States. If they didn’t offer incentives to get you to come to their lot, they wouldn’t sell nearly anything. It’s a buyer’s market so look for good deals.
If the dealership has what you’re looking for but no incentives, continue shopping around. If you still can’t find what you’re looking for, consider something else or waiting for an incentive to show up. Most companies run specials 2-4 times a year. Often you just have to wait for the right time to purchase. According to press.autotrader.com, some of the best times to shop could be at the end of the quarter/month (when salesmen are trying to reach goals), end of the day (when they want to go home), or days with bad weather (when no one else is shopping).
Do your homework when it comes to buying a car. You can save yourself a lot of money by following each of these steps. Don’t overpay for any part of your vehicle. Save yourself money by shopping smart.