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How to Save Money on a Car

How to Save Money on a Car

Shopping for a car can be tough since the dealer usually has all the advantages. Usually, the buyer feels like the deck is stacked against them. Sometimes you might be better off repairing your car before you go into debt to buy a new one. If the amount of repairs are out of the question, here are some tips on how to save money when purchasing a car.

Get Your Financing in Order

Although we all wish we could pay cash for cars, it is not always possible. Many people don't realize that shopping around for financing can save you a great deal of money. The dealership is certainly not the only place where you can get new car financing. Shop around and know your credit score before you start. This way, there are no surprises when you are trying to get a low interest rate. Your APR will be determined by your credit score, so make sure your credit report is accurate before you shop.

Never Negotiate Based on Monthly Payment

Do not fall into the trap of negotiating your car price based on monthly payment. This will extend the length of your car loan. The dealers can get the monthly payment down to just about anything using this method, while hiding the fact that you are being overcharged for the car. Always negotiate based on the interest rate of the loan and the actual price of the car, without extras being stuffed into the deal without your permission.

Negotiate your Car Purchase

Shop around using internet sites for car prices that are considered fair for the make and model you are interested in buying. Once you have determined the price of the car that you are interested in buying, ask the dealer for the out-the-door cash price excluding rebates, incentives or trade-ins. The price should include all dealer-added fees. At the beginning of the negotiation, don't let them use your trade-in or financing as part of the negotiation. Tell the dealer that you prefer to pay cash and that you have decided to sell your current vehicle on your own. You can change your mind about the trade-in and negotiate that part, as well as the financing later in the process.

Start shopping around at other dealerships for similar cars. Mention the price you were offered at the last dealership. Do this until you are satisfied with the price and quality of the vehicle you are interested in buying.

Beware of Fees

Finally, beware of any add-on charges or fees from the dealership. Also, look over your paperwork and make sure your trade-in price is correct. If you see a discrepancy or wish to question any ambiguous fees, tell them before you sign any paperwork associated with your purchase. Have them correct any discrepancies before you sign.

And there you have it. These tips should be very helpful to you when purchasing your car. Remember, never be afraid to shop around, and use the information to your advantage, which is the key to success in car negotiations.

Image by: Emilio Labrador