8 Secrets To Saving Money On A New Car
It’s no secret that cars are expensive. Next to houses, cars are typically the second largest purchase we make. While it’s inevitable that you’re going to spend a large chunk of money when looking to buy a car, we have a few tips that can help you leave the dealership with a little more money in your pocket.
1. Shop Around For The Best Price
When it comes to car shopping, the internet is your best friend. Once you decide on the specific make and model you want, take advantage of online tools like Edmunds, CarMax or CarGurus. All of these sites can help you compare prices and find the best deal near you on the car you want, whether new or used.
2. Look For Manufacturer Incentives
Before heading to the dealership, search the manufacturer’s website for cash-back opportunities off of the MSRP (manufacturer’s suggested retail price). Sometimes these rebates are advertised online or on television, but sometimes they stay hidden so dealers can offer them when trying to close a deal. Be sure to ask about any incentives you come across. Hey, bring it up even if you don’t find any online – you never know! Keep in mind that some offers have conditions such as financing through the manufacturer’s preferred lender.
3. Ask About Other Discounts
There are many other discounts dealerships offer that you might not know about and they might not openly mention. If it applies to you, ask about first responder discounts for police, fire and EMT, military discounts or student discounts. Dealerships also offer discounts for loyal customers who purchase within the same brand, as well as conquest discounts for customers switching from a certain brand.
4. Pay Cash
When buying a new car, it’s best to pay cash if you can to avoid car loans with high interest rates. Of course we know that paying cash for a new car is not ideal for many, so we suggest waiting to buy that new car until you’ve saved up a good chunk of money for your down payment. The more you put down, the lower your monthly payment will be and the less money in interest you’ll pay.
5. Consider Pre-owned or Leasing
If purchasing a brand new car just doesn’t fit into your budget, consider pre-owned or leasing. A pre-owned car in great quality can be just as good as a new one, and significantly cheaper. Keep in mind that when you drive a new car off the lot, it loses 20% of its value. After one year, it loses 30% of its value. You won’t feel this hit until you go to sell that car years later, unless you purchased a used car at that already-depreciated value. Leasing is another option that is typically cheaper – especially if you really want to bring home a NEW car – however you aren’t paying into something that you will own in the end and there are mileage restrictions.
6. Avoid Extended Warranties
Those extended warranties dealers try to sell you really aren’t necessary. The best warranties for your vehicle are the ones offered by the manufacturer on new or certified pre-owned cars. Dealers’ extended warranties usually overlap the manufacturers’ warranties, anyway.
7. Shop Around For Car Loans
Financing offered by the dealer is probably not the best deal you can get. Before heading into the dealership, shop around for loans and try to get preapproved for the best APR you can find. Also take into consideration the length of the loan and the total amount repayable (loan + interest paid in the end). Compare this number to the cost of the car… is it worth it? Although dealers’ financing offers typically aren’t the best, there are instances in which the manufacturer has a special offer going with a low financing rate. Offers like this are usually on a specific model.
8. Go With The Base Package
As cool as it is to have heated seats and a sunroof, is it really worth the extra $3,000? Vehicles today offer all sorts of technology to add comfort and convenience to your car ride, but these features also come with a price. If you’re buying a new car, you need to decide what features are important to you and what ones you could live without. Base packages are usually the cheapest, but don’t think you’re missing out on what new cars have to offer. Many base packages today include features like Bluetooth capabilities, a touch screen display, a backup camera and more.