by Susan Paige
Are you planning to buy a new car? Are you searching for ways that will help you save up?
Sometimes, saving for a car means finding the right deals. Sometimes, it involves making smart choices before you even reach the dealership.
When it comes to the payments, there is always the option to apply for a car loan. Statistics show that Americans owed over $1.16 trillion in auto loans in the first quarter of 2019. Unfortunately, millions end up struggling to settle their monthly payments.
On the flip side, there is the option to pay in cash. If you are looking to take this route, you need to learn some tips and tricks that will help you lower down your car purchase.
Continue reading below as we discuss some effective ways of getting a new ride for less money.
Determine How Much You Can Afford
Saving for a car starts with honesty. You need to know how much you can afford. This will help you come up with a budget that you will follow.
Always remember that the less you spend on a vehicle, the more money you will have for upgrades and other improvements. Moreover, some dealerships will try their best to entice you to buy the most expensive option you can afford.
But if you know how much you can truly afford, you can avoid this pitfall.
Cash If You Can
If you have the option to choose between paying in cash or through a car loan, you should go for the former if you have the means. You need to understand that a vehicle is not an investment. The moment you take it out of the dealership, it begins to depreciate.
Thus, it is better to pay in cash for a depreciating asset. Moreover, paying in cash keeps you away from soaring interest rates. By paying in cash, you can use the money you saved from interest and spend it on other things.
Additionally, go for a dealership that offers discounts on cash payments.
Research and Due Diligence
Before signing any deals, make sure to conduct your research and due diligence. Start by researching on the car that you want. Your goal is to find out how much the car’s current market value is.
Several websites provide market values for all kinds of vehicles. Moreover, you should check on the track record of the dealerships you are considering.
Keep in mind that the internet is your friend. With just a few clicks, you can verify the prices of the vehicles. You can also get an idea about the reputation of various dealerships.
When buying a car especially if it is your first one, going for a brand new vehicle is not always the best option. Consider buying pre-owned vehicles. This will give you more flexibility as far as getting the features that you want.
Moreover, you will get pre-owned vehicles at much lower prices. Make sure you inspect the vehicles carefully before buying them. If you are looking for quality pre-owned vehicles, you can try to shop here.
Negotiate and Consider Trade-ins
Since you are going to pay in cash, you will have the opportunity to negotiate for a better deal. This is crucial especially when you see some minor flaws in the vehicle.
Make sure to compare the prices of different dealerships. You can use the information to lower down the prices for at least a few hundred dollars.
Furthermore, if you already own a car, you can offer to trade it in. Several dealerships accept trade-ins. By trading-in your old vehicle, you can significantly lower the cost of the new car.
Some dealerships even accept trade-ins as down payments.
If ever you are going to offer your old vehicle, make sure to check for major issues. If you find some, fix them first before trading the vehicle. Dealerships will reject your offer if they find major problems in your vehicle.
Clean your car before taking it to the dealership. Don’t forget to bring all the important documents concerning your vehicle.
Determine the Entire Cost
Before parting with your money, make sure you know the exact amount of the entire cost of the vehicle. This means determining all the additional expenses that come with the base amount of the vehicle.
Find out the cost of the interest rate. Ask for a breakdown of the extra features including the registration and insurance costs.
Your goal is to find out the things you are paying for. Ask the kind of repairs they cover. Find out if they will pay for the parts or labor.
Does the warranty include routine maintenance? Will the dealership perform the maintenance?
Go through the documents. Read every page and go over the fine print. If you have any questions, do not hesitate to ask.
Avoid Extended Warranties
Try to avoid third-party extended warranties as much as possible. Generally, these warranties do not have the backing of the car manufacturers.
Some dealerships offer warranties that you can do without. Some of these warranties even overlap with the manufacturer’s warranties.
Take a Test Drive
Last but not least, before finalizing your decision, make sure to give the new car a test drive. You need to get a feel of the vehicle. This is crucial especially if there are any issues that the dealership overlooked.
Learning about existing issues will keep you from paying for a car that will only make you spend more on repairs.
Saving for a Car Is Easy!
Saving for a car is doable as long as you make the right decisions from start to finish. Practice patience and don’t settle for mediocre deals. Compare at least three dealerships before deciding.
To help get the best deals, we invite you to check our other articles. We provide numerous consumer tips and tricks you can take advantage of today!