6 Ways to Save Money When Buying New Car
Monday, June 10, 2013, 1:00 AM | Leave Comment
There comes a time when you have no choice but to purchase a new car. Whether you are simply tired of your old car or have to replace it because it keeps breaking down, a new vehicle is the best (and sometimes, only) solution.
Before you go to a dealership and start looking at what is available, make sure that you are well-informed.
Knowing how much your current car is worth and being aware of the pricing on the vehicle that you are considering purchasing are the best ways to give yourself some negotiating power.
You do not want to simply pay the sticker price for your new car.
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Trade in your old car
Depending on the age and condition of your car, you can get enough money on trade-in to take out a good chunk of the cost of the car that you are purchasing. If your current car is old and rather beat-up, wait until you see a dealership running a special that guarantees a certain amount of any traded in car, regardless of condition. This way you can get the most money possible for your old car, which automatically comes off of the cost of your new one.
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Pay cash (if you can)
This is hard to do, as not everyone has a random 20 or 30,000 dollars sitting around in the bank. But, if you do, paying cash for a new vehicle is a great way to negotiate the price down. There may not be a lot of “wiggle room” as dealers have to make money on the sale and the manufacturer sets the base prices. However, you may be able to negotiate a certain percentage or flat-amount off.
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Look for a new model from the previous model-year
The model years of cars run differently than calendar years. That is to say, the newest model years show up at dealerships in the fall of the previous year. This makes autumn the best time to buy a new car, as you will find brand-new vehicles from the previous model year sitting in dealerships listed at a discount. The dealerships want to get rid of these cars in order to make room for the new model years. By waiting until this time of year to buy a new car, you will be able to take advantage of these sale prices.
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Do not be afraid to negotiate
Many people are afraid to negotiate the price of the vehicle that they want to buy. This is mostly due to the fact that society no longer really bargains for anything – the prices in stores are set and we are used to paying them without question. However, a car dealership or sales lot is one of the few places where you are negotiate, so don’t be afraid to counter the salesman’s prices with better ones.
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Have a good credit score
The number one thing that drives up the cost of a car is the interest rate. Over time, you will end up paying far more than the car is worth based on this alone. However, if you have a good credit score, your interest will be lower, or even non-existent, if the dealership is running a special.
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Know the competitions’ prices
If you know how much a competing dealership is asking for a particular model of car, you will have some leverage when negotiating the sales price of the vehicle that you want to purchase. Why? Because the salesman knows that you can just walk out and go to the other dealership and buy a car from them.
There are many ways to save money on a new car. These six are just the tip of the iceberg!
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The preceding was by author and insurance writer, Terry Wood. She is a personal finance and insurance specialist with the site, http://usinsurancenet.com.
