Whether you are considering a new or used car for your next vehicle purchase, this costly investment is one that should last you for years to come. Cars however are also one of the few investments that are guaranteed to lose value over time, with the biggest depreciation occurring within the first few years after purchase. For this reason it is very important to get the most value for your dollar by knowing how to save money during the car purchasing process. Here we look at several tips that can save you hundreds perhaps thousands of dollars when buying a car.
Best method of payment
In an ideal world, you would be able to pay for all or part of the cost of the vehicle in cash. In reality, this option is not available to most people, especially when purchasing a new or relatively new car. With this in mind, the bigger the down payment, the less money you will have to finance in order to pay for the vehicle. When financing the remaining balance, do your homework to find out where you will get the best interest rates and terms. This may be through the dealer if incentives are offered, or in other cases through a bank or credit union. Make sure the monthly payment amount is something you can handle within your budget and do not be tempted to extend the length of time you finance the vehicle in exchange for a lower monthly payment. This will only result in paying more for the vehicle over time.
Shop early, buy late
Unless you find yourself in a situation where your car purchase must be made immediately, allow plenty of time to shop around to compare prices as well as individual vehicles. When you have found the car the best suits your needs and budget, wait until the end of the month or the end of the year to make your move. This is a time when dealers are interested in moving vehicles quickly to meet their quotas or make room for the next model year. With the added incentive to make more sales, you will likely find the best deal at this time.
Do not discount pre-owned vehicles
Buying a car is an experience that requires plenty of research and comparison. In some cases buying new makes the most sense financially and emotionally, however it is not the only option available. Buying used, especially when the vehicle has passed a certification process is another option to consider; one that could save you a significant amount of cash. Depending on the make and model of the car you are considering, a two year old version may have depreciated in value 30-40% from the time it was driven off the lot originally. Nevertheless, the same vehicle when driven under normal circumstances will still have plenty of life remaining at a fraction of the cost of buying new.
Considerations for buying a car
It is not only important to consider these tips that will save you money when buying your next vehicle, but also to remember long term expenses. Research how much it will cost to insure, repair and maintain specific models to determine if the long term expenses will be feasible within your budget. Believe it or not, but in some cases if you know the right way on how to lease a car, you can save, too. It doesn’t make sense to get a great deal on the purchase price, only to discover you can’t afford to operate the vehicle in the coming years.