We’ve all experienced that urge for your next vehicle purchase. You’ve probably spent countless hours looking at options available to you and gone back and forth between which exterior color you’ll choose.
However, all of the above are the easy decisions regarding purchasing your next vehicle. What’s likely holding up the process is the financial commitment of the vehicle. Buying a car is probably one of the most expensive purchases you’ll make, and you wouldn’t mind figuring out how to lower the price of a car.
Let’s dive into some strategies that can help you save some of your hard-earned money at the dealership during your car buying experience.
The Car Buying Experience: 6 Tips to Becoming a Pro
You’ve likely closed a car deal in the past, but you probably felt lost during the process. Car buying can be a frustrating and challenging process, but it doesn’t need to be. If you prepare yourself and have confidence during the process, you’ll come out on top.
#1 – Do Your Research
The very initial step in buying a car is doing your research. Being that this is such a big decision, you’ll want to be certain you’re making the right choice for not only aesthetics but also taking practicality into account.
What kind of car fits your lifestyle in this season of your life? Do you need more space that a minivan or SUV would provide? How much are you driving daily or on a weekly basis? Is efficiency important to you?
There are many factors to take into consideration, and the first way to save money is not making a bad decision. The worst-case scenario is finding yourself needing a different vehicle because the one you chose doesn’t check all the boxes.
#2 – Don’t Overbuy
Yes, you might want that dream car you’ve been looking at for years. However, does is make financial sense? Payment calculators are key when deciding if the math works in your favor. What can you afford each month? It’s best to stick to a certain budget. There are many helpful budgeting tips that can prove to be helpful during such a big decision.
Always consider the amount of money you’ll save for a down payment so that you’re able to factor that into the numbers when figuring out the monthly payment and have a very clear understanding of what you can afford.
#3 – Good Credit Means Savings
It’s no secret: Good credit will seriously affect your bottom line. Today, rates are at all-time lows. If you have a good credit score, you’ll be able to snag a great loan rate, giving you more opportunity to pay more money toward the principal.
Start planning your next purchase now and increase your credit score with a good payment history, keep your credit utilization low, and always review your credit reports for pockets of opportunity to build your credit.
#4 – Rebates and Incentives
Dealerships are not obligated to pass on current rebates to consumers. Yes, this is the absolute truth. It is your responsibility as a buyer to understand the current rebates and incentives before stepping foot into the dealership. Rebates and incentives can sometimes mean some deep savings, so always keep an eye out for these offers from manufacturers.
#5 – Timing Is Key
It is not a myth when you hear about the last day of the month luck. Often, dealerships have targets from manufacturers. A dealership can be one or two cars away from hitting its monthly factory objective. These factory objectives provide incentive money for the dealer, creating a quick sale and passing along savings to you.
#6 – Trade-in vs. Private Sale Value
You can use an actual cash value calculator to understand your current car’s value and what it’s worth both on the street and in trade-in value. Selling your current vehicle privately versus trading it in to a dealership is not always going to put more money in your pocket; this is traditionally the belief of consumers.
You’ll need to take into account the higher sales tax rate that will be applied should you sell privately vs trading in. You might be able to sell a vehicle at a higher price on the street to a private buyer. However, you’ll pay higher sales tax. Always consider this and do the math so you understand your gross profit.
Carla Hughes writes and researches for the car insurance comparison site, CarInsurance.org. Carla’s husband has worked in the car industry for over 20+ years, giving her a wealth of knowledge in car buying.
