When buying a car in 2018, setting aside some time for research and planning is non-negotiable.
It’s a big purchase that demands plenty of thought. These tips for buying a car will help readers develop effective car buying tactics.
It’s crucial to know the market in order to to get good deals these days. An important and decision like buying a car isn’t something to settle on over a weekend.
This list will help readers build a solid car buying strategy and get the best deals on future car purchases. From research to negotiation tips and many things in between, here are our top tips for buying a car.
1. Doing Enough Research
Knowledge is power when it comes to getting good deals on cars.
It’s a common mistake to show up uninformed to the car lot. Researching the car and dealership of interest before going there is an important piece of the puzzle.
The internet holds all the information a buyer needs to know about cars. Consumer reviews and reports, common issues and how to fix them, and much more.
It’s best to research a few different cars in the desired price range on a few different sites. This will give a better idea of what to look for.
When looking to buy a new car, the goal is finding the car’s “invoice price” rather than the MSRP. This “invoice price” is the price that the car dealer gave the manufacturer.
This information can help a lot when the price negotiations begin.
When looking to buy a used car, it’s important to research what a specific model is selling for. Recent sales prices are easy to find online. There is serious bargaining power in this data.
Buyers who plan to trade in their current vehicles should do the same research on those. Knowing the market value of a trade-in will enable more effective bargaining.
2. Considering Pre-financing Options
What’s next on our list of tips for buying a car?
Another common, big mistake is getting financing from the dealership. This will mean a whole lot more time and money spent paying off loans.
Dealerships have much higher interest rates than banks and credit unions in general. It’s a much better idea to start researching loan rates for cars at the bank or credit union. They may also offer loyalty discounts which you can’t get elsewhere.
While the internet doesn’t always present the best deals, it allows thorough comparing of interest rates. It’s a good idea to look at disinterested comparison sites.
It’s also a good idea to send messages asking the bank or credit union for a quote. It’s important to get this quote in writing. With this quote in hand, it’s easier to negotiate lower interest rates at the dealership.
3. Looking Up All Potential Discounts
This is one of the underutilized tips for buying a car.
Some seller offer discounts and cash-back deals. They’re often highlighted in an advertisement.
On top of this, many automakers have discounts for certain people such as:
- People in the military
- Members of a favored credit union
The best part is that the discounts often stack. And they combine with the car’s cash-back deals. This can reduce the price a lot.
The “current offers” sections of automaker websites are the best place to look for these incentives.
Do all the research in advance, and apply the discounts in the end.
4. Assessing Ownership Costs
It’s wise to estimate the ownership costs of the cars on your list. This lets you make an informed comparison and find out which ones best fit your budget.
Using an auto research website like KBB is a great way to get an overview of local ownership costs. The numbers may vary based on your location and personal situation.
It’s a good idea to calculate the following:
- The distance driven per year
- Gas prices in relevant areas
- The gas consumption of the car you’re interested in
- What you’ll pay for an auto insurance that covers all drivers in the household
Insurance agents can provide a more accurate quote if given the exact model and specifications of the car.
5. Negotiate Terms
Buying a car isn’t a brief event. Thinking about it as such is a big mistake. It’s an important investment which may require payments for many years.
Far too many buyers let the car dealers take them for a ride, making them pay more than necessary. This is one reason you need to know the best tips for buying a car.
The smart buyer makes every effort to negotiate the price and loan size. This shouldn’t be a half-hearted attempt. It’s a good idea to start with a ridiculous number and work toward meeting in the middle.
Another example, the salesperson may offer a monthly payment of “x” dollars for 60 months. It’s wise to ask for the same payment on a 48-month loan instead.
It’s important to stay firm. The successful negotiator arrives with confidence and sticks to the plan. There is no shame in walking away from unsatisfactory offers.
It helps to practice these negotiation tactics in advance.
6. Purchase Price Trumps Monthly Payments
Car salesmen are infamous for their tricks and dishonest offers. That’s why these tips for buying a car can help so much.
It’s easy to be misled by what seems like an attractive monthly payment plan. When considering how many times this payment will repeat, and for how long, it’s not attractive at all.
Using a calculator if necessary, the buyer should multiply the payment by the number of months in the plan. Showing the sum to the salesman with a firm look will make them reconsider.
Negotiations should always focus on the car’s purchase price, not those monthly payments.
It’s also important to know the full purchase price with all hidden costs factored in. Things like taxes, dealership costs, and delivery fees can add a lot to the final price. The dealership won’t mention this unless you pry.
7. Use Strong Negotiation Tactics
It’s important to remember all research data when getting ready for negotiating. Rehearsing the discounts, tactics, and tips for buying a car will make you a better negotiation.
It’s important to put aside the concept of trading in a car at this time. This is better viewed as a separate matter to discuss AFTER negotiating the price. Having researched the value of the old car before prevents being ripped off.
Salesmen can and will use the trade-in against the buyer if it’s brought up before a price is agreed upon.
Let’s say a car is $22,000 and the salesman has a “rock bottom” price of $18,000. The buyer offers a trade-in worth $2,000. The salesman can offer a $20,000 purchase price and $2,000 for the trade-in.
The buyer could have kept quiet about the trade-in and brought the salesman down lower. If the price landed at $18,000 and the buyer then offered the trade-in at $2,000, they’d only have to pay $16,000.
Keep the two negotiations separate. Trade-in talk comes after the purchase price.
8. Always Testing the Car
Most people test drive a car before buying it, but there is a small percentage of people who don’t.
There are countless reasons for always test driving cars. Comfort should be the highest priority. You’ll be driving this car for years.
Buyers with children should bring them for the test drive. It’s important that they’re comfortable, and they’ll give an honest opinion of the car. This is one of the most valuable but overlooked tips for buying a car.
Other things to test for:
- Do the mirrors provide a great view of everything important?
- Is the car smooth and quiet when idling?
- Is there a good view of all dashboard gauges?
- Do the brakes and handling respond the right way?
- Are the turn signals, AC, and wipers easy to use?
When looking for a used car, it’s wise to have a mechanic check it before finalizing the purchase. Dealers aren’t always vigilant and honest about wear and tear.
The mechanic’s report helps eliminate bad cars. It also helps with negotiating a lower price if something isn’t perfect.
9. Declining Add-ons
The costs of accessories can pile up fast. When financing a car, add-ons will increase overall expenses a whole lot.
It’s better to forget about all that’s not necessary. Salespeople will try to persuade buyers that certain add-ons are crucial. They’re only trying to make more money.
Dealership maintenance plans and rust-proofing are perfect examples of this. They’re not necessary. Remember this as you keep in mind these handy tips for buying a car.
When the purchase price is settled, it’s best to reject any offers for add-ons. Even if something sounds like it might be worthwhile.
It’s better to research all interesting extras at home and contact the dealership after to negotiate better prices. Another benefit of this research is the potential to find cheaper or better alternatives.
When all the prices and fees are settled, it’s wise to go over all details again. This should be a thorough check, ensuring there are no unnecessary dealer fees. All the verbally negotiated terms must also be spelled out in writing.
10. Buying an Affordable Car
This isn’t a redundant repetition of an old saying. Buying within your budget is a lost art.
Many people start thinking of buying a new car before having paid off the previous one. Buyers finding themselves in this situation need to reconsider and determine whether it’s too expensive.
The risk of ending up with an upside down loan needs serious consideration. This should be at the top of your list of tips for buying a car!
It’s much better to wait. Having paid off the previous vehicle in full, it’s time to set aside some funds for the next purchase. It’s best to save all the money that used to pay for the previous car for a while.
As an example, let’s say the old car payment was $400 per month. Saving that for a year would make $4,800. That would make a nice down payment on the next car.
It’s important to always resist the temptation of digging into savings. Taking from an emergency fund to buy a flashy car is a terrible idea.
Always buy within your means.
Consider the Car Maintenance
Whether it’s oil changes or tires, you need to consider how much time and/or money you will need to invest into properly maintaining your car. Consult the dealer or build your own car maintenance checklist.
Final Thoughts on Tips for Buying a Car
Buying a new car is a big and important investment. Car dealerships and loans are designed to make you pay more than necessary. These ten tips for buying a car will help you pay less for your next car purchase.
For more tips on how to save money, keep reading our blog.