Personal Finance

Car Buying Money Saving Tips

If your family car is on its last leg, you’re probably in the market for a new car. And with the multitude of other family obligations you likely have, keeping the cost affordable is a priority. Of course, this is much easier said than done. A car salesman may recommend vehicles outside your budget, and if you allow yourself to be up-sold, this can create a financial hardship.

Fortunately, there are a number of ways to buy a car and save money in the process. With just a little knowledge and a bit of fortitude, you can help ensure that you don’t overspend when you go to visit the local car dealerships. Consider the following five effective money saving tips:

Go Used

New isn’t always better. Several car dealerships have an excellent selection of well maintained used cars. Check out www.priority1cars.com pre-owned specials and search for vehicles in your price range. Used cars not only cost less, they also hold their value longer. This helps avoid an upside down car loan.

Consider Vehicle Maintenance

Even if you can afford a luxury or more expensive automobile, it is important to consider long-term vehicle costs. Parts for a luxury car are often more expensive, as is routine maintenance such as oil changes and new tires. Additionally, it can cost more to insure these vehicles. Think beyond the car payment and consider other expenses.

Compare Rates

Don’t only focus on the price of the car. Your interest rate is equally important, as this plays a role in your monthly payment. Negotiating the price of the car is only one aspect of financing. Get an auto loan quote from local banks and credit unions, and compare these rates with the dealer’s finance package. You have some control over your interest rate. A good credit score, a down payment and choosing a three or four-year finance term typically justifies the best rates on a car loan.

Wait

Consider waiting until the end of the year. Patience can have a tremendous impact on your pocket. Postpone buying a car until the latter part of the year and you can save money. This is typically when dealerships receive shipments of the newest car models. In an effort to free up space and unload the previous year’s models, dealers host year-end sales. Granted, the selection of vehicles may be limited if you wait. But if you’re flexible and not looking for a particular car, this is an excellent way to save.

Sell Your Car Yourself

Trade-ins are convenient and easy. But if you’re expecting the dealer to give the highest value for your trade-in, you’re sadly mistaken. In most cases, you’re better off selling the car yourself. A dealership might offer $9,000 for your trade-in, yet the private party value of your car may be around $11,000. The more cash you get for your old car, the more you can put toward your new car.

Don’t let a new car purchase break the bank and take all your extra cash. This is a three, four or five-year commitment. And before signing your name, it is important that you assess whether you can afford the monthly expense.

1 thought on “Car Buying Money Saving Tips

  1. A good friend of mine is in a very bad life/financial situation and needs a new car. She has about $3,000 saved and wants to only put a down-payment of about $1,500-$2,000 for another used car. She’s not being realistic about her options, though. She thinks she’ll be able to get a decent car with a monthly payment of $150 or less (and has – shock, shock – been turned down by several dealerships so far). The problem is that she can’t seem to find a middle-ground between cars that are used but too new for the payment she wants; and cars that are super-old and will need work. I think this is because more people are holding onto and repairing their cars these days. Very tough situation.

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