Tips for Buying a New or Used Car
Whether you’re in the market for a new or used car, there are ways to save on your purchase.
Do Your Research
With most car dealerships offering online pricing and a virtual dealership, it’s very easy to research all there is to know about a vehicle class, make and model. Be sure to do your research in these areas before heading to the dealership.
- Check Dealer Ratings. Be sure to read the online dealership reviews. Customer ratings and reviews are a great glimpse into how accommodating a dealership may be and how willing they are to work with buyers.
- Check the Carfax. When a used car arrives at the dealership, the dealer will run the Carfax for that vehicle. When you’re checking out a particular vehicle, check to see when that report was run. If it’s more than 60 days old, you likely have a little more leverage in negotiating the final sale price, as the dealer will be more likely to want to move the car off the lot. The Carfax is also great because it gives insight into the vehicle’s history, accidents and repair records.
- Look at Used Cars in the Same Model. If your dealer has 1-2 year old used models of the car you’re considering buying new, be sure to consider them. In some cases, these are either models that were initially leased and turned in (and thus have low mileage) or may just be new cars that weren’t quite what their previous owners were looking for when they made their purchase. In either case, it could mean big savings for you if it fits what you’re looking for in your new car.
Timing is everything
If you are after a new car, making your purchase toward the end of the model year or right after the newest model has been released may save you thousands. Dealers are interested in moving out new cars that are 1-2 model years behind the latest one, and they are willing to reduce prices to avoid paying for inventory that has been on the lot for a while.
Waiting to purchase later in the model year often allows you to cash in on year-end incentives from both the dealer and the car manufacturer. In addition, statistics show waiting until the end of the month will score you a better price, since salespeople are looking to make their month end quota on sales and are willing to give you more incentives and a better price in order to do so.
For used cars, be sure to check out Certified Pre-Owned cars. You may pay a bit more than non-certified cars, but you may get many perks like an extended warranty, free service and attention to detail on repairs prior to the sale.
Take a Test Drive
Taking a test drive is crucial when choosing a new car, even if you know everything about it from reviews and your own research.
- Be sure to do your test drive under real life conditions. Nothing will tell you more about how the car will fit into your lifestyle than a test drive with all your kids in the back seat!
- Take the car home. Make sure that new car will fit into your garage or driveway.
- Test all the bells and whistles. Are you a big music fan? Be sure to plug your music into the car’s stereo system to test it out. If you’re paying extra for certain amenities, be sure to test them to make sure they are operational and are exactly what you are expecting.
Making the Deal
You’ve found the car and done your research. Now it’s time to close the deal and take it home.
- Get Pre-Approved for your Auto Loan. Getting pre-approved for your auto loan puts you in a great spot for negotiating the final terms of your car purchase. It allows you to know the terms of your financing, including your interest rate and the amount up to which you are approved, giving you a maximum to spend on the new vehicle. It also allows you to shop around at different lenders ahead of time to get the best deal on a loan on your own. Finally, you may be able to leverage your pre-approved loan against financing the dealer is offering to you, which may or may not be a better deal.
- Look at the Deal in its Entirety – Not Just the Price! Make sure to not get hung up on the final price of the vehicle. You can also negotiate with your dealer on things like free oil changes and maintenance, free upgrades or other dealer incentives, as well as the price you may receive on your trade in (if you have one).
For additional car-buying articles, check out our financial fitness resources. Questions? Call 503-588-0211.