Buying a new car can be a complicated process that many people find intimidating. This is especially true if you are trying to save some money and don’t want to spend more than you have to. In these situations, it can be a big help to know how to save as much money when buying a car as possible.
Understanding some of the cheapest ways to buy a car can help you get a vehicle that meets all your requirements and doesn’t cause too much financial pressure. Being able to sustainably pay for your vehicle is the best way to keep car ownership easy and stress-free. By knowing how to keep your purchase price low, you can get a great deal on a car that will serve you well for many years.
Here are our 14 top tips for getting your next car for cheap:
1. Pay Cash
One of the best ways to save money on a car loan is to not get a loan at all. If it’s possible for you to pay cash for your car, it’s highly recommended. Since you won’t be charged any interest, you will end up paying the least amount possible for the car in the long run. Getting all the payments out of the way up front can be a big help.
It may be difficult to save up the amount of money needed to purchase a new car at a dealership. However, there are plenty of used car dealers that have cheap vehicles well within a lower price range. If you can wait to make your car purchase until you have saved up the entirety of the asking price, you can save yourself a lot of money.
2. Get Pre-Approved
If you want to purchase a new vehicle at the best price possible, it is a good idea to get pre-approved for a loan. Get pre-approved by your bank, credit union, or another financial institution, and bring that pre-approved loan to the dealership when you go shopping. This will give you something to compare with the rates being offered to you by the dealer.
Oftentimes, if you show up to the dealership with a pre-approved loan from a lender, you can leverage that when negotiating terms. You can also get a loan with terms that you will feel comfortable with. It is recommended that your loan is for no more than 48 months and that your monthly payment shouldn’t be more than 15 percent of your income.
3. Improve Your Credit Score
The best thing you can do if you want to get a good deal on a new car is do your best to improve your credit score. Many dealers and banks will take your credit score in to account when deciding on down payments and interest rates. The better your score is, the less you will pay overtime on your auto loan.
One of the best ways to improve your credit score is to keep the balance on your credit cards low. It is recommended that you keep your credit use below 30 percent if you want to keep your credit score as high as possible. You should also limit the number of hard inquiries on your credit, which happen when you apply for new cards.
4. Choose the Right Time of Year
If you want to get the best possible deal on a new vehicle, it is a good idea that you wait until the time of year is right. Many dealerships will try to make room on their lots for the new models and will offer deep discounts and incentives for the previous model year’s vehicles. If you can wait, you should look into shopping during that time.
Most dealerships start to try and make room for new cars between September and November. During this time, you will notice that interest rates at the dealer and sticker prices will be much lower for the older models. The holidays can also be a great time to search for a new car because there are many deals and discounts happening to try and get people excited about new cars.
5. Buy a Manual
While they may not be as common as they used to be, vehicles with manual transmissions are still being made every day. You can benefit from this by purchasing a manual vehicle at a lower price. Whether you are looking for a new or used car, the standard version is almost always going to be cheaper than the automatic version.
This price difference is due to the fact that fewer and fewer people know how to drive a manual transmission. Manual cars also have several advantages including better gas mileage and a lower cost of maintenance. If you don’t know how to drive a manual, a cheaper car could be a good incentive to learn.
6. Don’t Do a Trade-In
Getting the best price for the car you are getting rid of is a great way to take some money off the price of your new car. While it may be very convenient to simply do a trade-in at the car dealership, you will most likely not be getting the full market value of the car. The best way to get a good price for your old car is to sell it on the private market.
There are all kinds of options available to you for selling a car privately. Online marketplaces like Craigslist can help you get the word out about your sale and get it in front of the car-buying audience. To increase your chances of a sale, get the car washed and detailed and take high-quality photos to go along with your listing.
7. Try Auctions
If you are not picky about the kind of car you want to buy, auctions have some of the best car prices available. Whether they are police auctions or government institutions, you will be able to find incredibly cheap cars. Many of them will be name-brand economy cars by automakers like Toyota, Honda, and Hyundai.
Search the web for car auctions in your area. In most cases, you can bid on vehicles online, so you don’t even have to go to the auctions in the first place. Many of these vehicles will be relatively high mileage but will have also been well-maintained, especially if they were used by government agencies.
8. Lease a Vehicle
A great way to drive a new car without all the hassle of getting a loan is to lease a vehicle instead. Leasing is a good option for those who like to drive newer cars and don’t want the responsibility of owning them. Many leases are available for 24 or 36 months and will have a certain number of miles that are allowed on the terms.
Leasing offers some of the best rates for drivers and while you will still have to make a payment every month, it will most likely be less than a standard car payment you would have to make if you owned the vehicle. You also don’t have to deal with things that car owners have to deal with, like depreciation.
9. Search for 0% APR Financing
It may not make sense at first, but 0% APR financing does exist and can be found at many different dealerships. Dealers will sometimes offer no interest on their financing if they are trying to make room on their lot or are trying to get rid of vehicles that haven’t been selling. If you can find a 0% APR deal, it will be the cheapest possible deal you can get.
Dealers make money on 0% APR financing by forgoing things like discounts and rebates that they might otherwise offer car buyers. Because of this, you may end up paying more on the sticker price, but over time, the total cost of the car will be much less. It might take a lot of shopping around but if you can find a deal like that it will be well worth the wait.
10. Stay Flexible
The most important thing to do if you want to get a good deal on a new or used vehicle is to keep your mind open. If you have a specific car in mind that you want to buy, this will severely limit your options when it comes to what you might need to pay. It is always best to stay as flexible as possible when shopping for a car on a budget.
One of the ways you can keep your options open but also get the car you want is to shop for vehicle types instead of brands. While you might want a Ford or Kia, you may be able to get the same kind of vehicle made by another automaker. The wider you can keep your search, the more likely you will be to find a great deal.
11. Understand the True Cost of Ownership
It is important for any car buyer to understand that buying the car is not where the expense stops. In many cases, it will be more expensive to insure and maintain the vehicle than it was to buy it in the first place. Because of this, keep the true cost of ownership in mind when you are shopping.
Look up the yearly average maintenance cost of any car you are thinking of buying. This will give you a good idea of what you can expect to spend to keep it running. You should also get a quote from your insurance company for that specific model to see how much it will be to insure before you decide that it is the right vehicle for you and your budget.
12. Ask About Old Inventory
In order for a dealership to stay profitable, they have to constantly be turning over their inventory. If they have a car that has been sitting on the lot for a long time, they will be much more likely to haggle with you and give you a good deal just to get it moved. Ask about any older inventory a dealership may have before you start looking at newer vehicles.
There are also ways that you can spot some of the slower sellers on the lot. If the car has a spoiler, look underneath it for dust. You can also look for vehicles that have an unusual color as these will not be as popular as some of the more common colors. There will also be a sticker with the car’s manufacture date on the inside of the door. If this date is more than six months prior, you will be much more likely to get a good deal on the car.
13. Try a Warehouse Membership
Warehouse retailers like Sam’s Club and Costco have auto buying programs that offer their members deep discounts on new cars. Even if you don’t already have a membership, you can end up saving money on a car by signing up. In most cases, the discount will end up being much more than the cost of the membership.
While these auto buying programs can get you a good deal, they will also limit your options when it comes to cars that are available to you. With these programs, the retailer will negotiate prices with dealers that you can take advantage of. This makes them a great choice if you want to get a good deal but don’t like the idea of haggling or negotiating.
14. Avoid Upgrades
When shopping for a new car, a salesperson may offer you upgrades including things like anti-theft devices, all-weather mats, or other add-ons that they will claim will boost the resale value. The truth is that these things are usually unnecessary and will add quite a bit to the final price of the vehicle. If you are buying a good car, you should not need any of these expensive upgrades.
The most important thing when buying a car is to make sure that you take it for a test drive and, if it is used, that you get a full picture of the vehicle's history. Anything else that they will offer will most likely not be worth the money.
Buying a car can be a stressful process, especially if you are on a budget, but it doesn’t have to be. There are so many ways that you can save money on the price of a car as long as you keep your options open and are willing to be flexible. By knowing some of the best ways to get a good deal on a car sale, you can drive away with a vehicle that will suit your needs without having to spend more money than you can afford.