NOV 25, 2017 AT 02:42 AM
Are you thinking about getting a new car?
We all know the intimidating prospect of buying something that will last you for years, because you do not want to make a grave mistake when purchasing and end up stuck with a car that you do not like or it causes you problems. What is worse, you buy a car that is so expensive, and you regret purchasing it.
In the age of the internet and information, do not be left behind. Here are some tips you can apply when searching for your dream car at a lower cost.
1. Budget first
Know that the purpose of advertisement budgets is to make very enticing offers to you so that you can purchase something on that offer, and this is no different for cars. Being sucked in is so easy because of the enticing leasing and buying offers on different cars, yet this is only the start of your journey to owning a car. You will go to the car dealer and receive all the exciting add-on offers like dealer-installed accessories and warranties, and if you are not careful, you can end up spending so much more than you anticipated because you lost focus of your financial plan. The advice: set a monthly budget, taking into account all the figures, and never take on more than you can handle.
2. Make sure to fully research what you want before going to buy
One of the worst mistakes you can make is being unsure of exactly what you want when going to the dealership. When you do full research, you will know the car type you want as well as its alternatives, its specifications such as color, the mileage, the interior cabin dimensions, and the price.
If you know more than the salesperson, which is the case most of the time, you instantly gain an advantage in looking like “you know what you are talking about” aura, which means you can easily negotiate for the car you want. When the salesperson sees you know about what you want, you can even get the car at lower prices because of your confidence in negotiating a deal!
3. Remember the cycle of models
If you do not need the latest car model, the best time you can get a car is around the time the next year’s model has started showing up on dealers’ lots. The rationale behind this is when planning of new models happens; the dealer wants to sell off their current models quickly, to make space for the new ones coming in. It is very easy to figure out the time for the turnover of your desired car - it is not classified information - then just go to the dealer at the right time. This is advantageous for you, especially when the next year’s model is a full redesign of current models, so prices will be cheap.
4. Consider selling your old car instead of trading it in
One of the lessons I learned from my dad was that before you buy a new car, sell your old one first. Yes, we live in a busy society where people do not have time to advertise their car on a classified advert and answer interested strangers’ questions. That makes people resort to trading in their cars whenever they want to upgrade.
However, even though this option will save you time, it will not save you money in the end. The appropriately named “private party” values, that is the price you anticipate to get when you sell the car, tends to be significantly higher than trade-in values, that is if you were to trade in the car. This money can run into thousands of dollars. So instead of taking the seemingly easy trade-in option, take a few photos of your car and sell it.
5. Bargain as much as possible!
The thought of arguing and negotiating with a dealer over a car can seem unappealing to many, but the truth is it is necessary. Make sure that you are fully aware of the facts when going to haggle - you will not offend the dealer by negotiating for a better deal, or if it does not feel satisfactory, by walking away. Remember to keep your maximum budget price in mind, and you will be on your way to getting a good deal.
6. If you cannot pay cash, avoid that car, or get pre-approval
This may sound harsh, but it is better than paying for that car with interest, when you may already have so much on your plate, and are losing money in two ways - the loan and depreciation costs. You are better off buying a lesser model or postponing the purchase altogether until you have the cash necessary to buy the car.
If you feel however, that you cannot let your desired car go, the least you can do before going to the dealer is to get pre-approval for a car loan. This will allow you to compare interest rates of different dealers before buying, and will help you to focus on the sales price when bargaining, instead of the monthly payments.
One thing you should watch out for - do not attempt to take car loans that last more than 48 months (4 years). Because cars depreciate, the longer the loan is, the worse the recipient pays the money back. Your monthly car payment should also not go beyond 15% of your monthly pay, assuming you do not have consumer debt to pay.
7. Avoid unnecessary features
When going to purchase a car, do not be mesmerized by extra car features that are not necessary. These extra gimmicks translate into a more expensive car, and all they are good for is for the salesperson to make some extra commission. They can sound like music to your ears, but when you scrutinize them carefully, you realize you do not need them in the first place. Keep in mind that basic models tend to have bigger discounts because of their excess number.
8. Purchase at the invoice price or lower
A false assumption many car buyers make is to presume the dealer’s vehicle price and the quoted invoice price re the same thing, so you should offer more money for the car.
The truth of the matter is some dealers get offers of various incentives to sell certain vehicle models that are still profitable even when sold at or below the invoice price. Because of this, do not shut out dealers who insist on their invoice price.
9. Stay away from most options and big wheels
Most car options unfortunately do not keep up well with time, even during resale - especially technological options that become outdated quickly and require subscriptions mostly. The higher chances are you will not use most of them at all.
Avoid non-factory cars. To increase their profits, dealers can add supplementary features to new cars. They can include fabric protectant, undercoating, pin striping, or anything else that can make the car seem like a very high-tech vehicle. Even extended warranties from other shops can come cheaper than what the dealer is offering you.
Big wheels can seem very fancy, but they come with two inherent problems: the price of replacing the tires is high because they are rare, and they also cause the fuel economy of the car to suffer. In this case, the smaller your wheels, the better.
10. Confidence is key!
Remember to be polite to the salesperson, even as you bargain for your dream car - they can help you score an amazing deal for your budget. Whenever possible, negotiate with the manager as opposed to the salesperson, because the manager usually has more authority to make extensive deals.
11. Look for older inventory
The cycle of selling off older models so that new models come in applies. The longer the stock sits on the parking lot, the more the dealer will want to get rid of it. The dealer will want you to leave with the car, so there are some tips to make sure you get the best deal. The sticker on the driver’s side door gives you the manufacturing date of the car, which will help you get a good deal. Another sign is around the car edges where a typical car wash can miss spotting dust accumulation, therefore indicating that the car has been there for some time.
Remember that a car is supposed to last you at least ten years, so do not just purchase something because it looks good on the outside; buy something wisely and one that will not cost you an arm and a leg when you use it. Having an open mind is important so that you avoid bad deals, and keep several alternatives in mind instead of one make or model so that you have a rewarding experience. Study what other shoppers are buying and take the time to make a solid decision.