Tuesday, August 13, 2013

How to Save Money on Your Next Car

Car dealership
Car dealership (Photo credit: Wikipedia)
If you are in the market for a new car, you may think that there are simply no ways for you to save money on your purchase. However, this cannot be further from the truth! There are countless ways for you to save money on your next car, and we are going to examine a few of the top methods here.

Conduct Some Research First

The fact of the matter is, not all car dealerships are equal. Some of them have higher prices than others, and some offer better deals. With that said, it definitely pays to shop around and conduct a bit of research before you step foot on a dealer's lot.

There are many websites where you can discover the average selling prices for various cars. In this way, you will know whether or not a dealership has overpriced its vehicles. Additionally, by accessing the Internet, you can shop around for the cheapest and best vehicle of your choice. 

Obtain Your Own Financing

Before you begin shopping for a car, you need to determine just exactly how much money you can afford to spend on one. In short, what size of a payment can you fit into your monthly budget? Contact your bank or local credit union and apply for a pre-purchase loan. If you qualify, you will be better prepared to determine what you can afford.

Try to save up as much money as you can for a down payment. This will help significantly in lowering your monthly payments or the term of your loan. Once you have been pre-approved for a loan, you will have about two months to find a car you wish to purchase.

Use the Power of Negotiation

After you have obtained financing and determined what you can fit into your budget, you will then be prepared to visit a few dealerships. Keep in mind, though, you should always stick to what you want to spend. In other words, never let a dealer take advantage of you. Additionally, make sure that the price you are offered includes everything.

By “everything,” we mean the price of the car, taxes, the cost of the title, tags and any other applicable fees. All of these expenses added together equal what is known as the "out of door" price for the car. Furthermore, never conduct negotiations over the phone or Internet--always negotiate in person. 

Get the Most for Your Trade-In

If you want to use your old car as a trade-in for the down payment, be sure to find out its Kelley Blue Book value before visiting any dealerships. Furthermore, do not mention your trade-in to the dealer until after you have negotiated the price of the new car. In this way, you will get a much better deal for both the old and new cars.

Never Give in to Pressure

The best tip when shopping for your next car is to never give in to pressure. A dealership is going to try to pressure you into buying one of its cars right then and there. The salesperson does not want you to think about your purchase because you very well may change your mind. However, remember that it is your money, and you have every right to walk away.

There are other dealerships that may offer you a better deal. If you do not like a price or need time to think about a deal, ask the salesperson for their business card and tell them you will call after you have thought over your decision. When you use these valuable tips, you just may be able to save hundreds or even thousands of dollars on your next car.

Bill Akintoye works at Shabana Motors in Houston, TX. They buy used cars and provide appraisals in fewer than thirty minutes.

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