Earlier this year when my van was totaled, we had no substantial savings built up to make a new (to us) vehicle purchase. In the past when we’ve purchased a new car, we had some buffer time to plan and make the purchase. This wasn’t the case and so we needed to determine our course of action.
We haven’t had any consumer debt in a while, which means we haven’t had a car payment in more than a year. The thought of adding a new car payment wasn’t something I was willing to even consider as an option. Especially since Paul had been a stay-at-home dad since October (more on that one soon, I promise).
Shopping for a car is on the list of my least favorite things to do. Knowing that it’s a game is very annoying to someone like me who likes to straight it shoot and skip the song and dance of going back and forth. The entire process can be extremely frustrating if you’re not prepared.
Here are a few ways to save more money on your next new care purchase and save your time in the process:
1. Determine whether buying a new car is right for you. Ensure that a new car purchase is the right fit for you, your lifestyle, your family, and your budget before you spend the money. If your current car is in good shape, you may want to keep it for a while and save yourself the money.
You may be able to find a used car that’s in great shape for a lot less money. It’s not as glamorous or exciting, but it might be the wise choice for your pocketbook if you find a great deal.
2. Shop online and shop around. Yes, online. We purchased our van by searching online. A great site to use is CarGurus.com (thanks to Bargain Briana’s hubby for sharing that resource). This site was great because it not only tells you the Kelly Blue Book (KBB) value but it tells you the average sales for other similar vehicles. Sometimes the prices were BELOW the KBB, as was the case for our van.
I also went searching for used cars on Ebay and was nearly ready to pull the trigger until I found the great deal on our van through CarGurus.com. There are many other sites out there to search online, even the dealership themselves so definitely do a search first. Many times if you go directly to the dealer online you will get a small incentive.
Also, shopping online gives you leverage for other dealerships too. With another vehicle purchase, we were able to use the other dealership’s pricing to our advantage and get the absolute best deal. Whether you are shopping around in-person or online, there are definite advantages to checking several dealers, and even private sellers first.
3. Pay cash if possible…maybe. We went to a local dealer and asked them if they had any incentives for paying cash. Their response: we get our cash somehow and we don’t care if it’s from you or the bank. Well, alrighty then!
We have never paid cash for a vehicle before so that was a shock, especially given Dave Ramsey’s mantra of always paying cash. He is wrong with this one (sorry all the Dave devotees). In fact, I spoke with a friend who is also a huge Dave Ramsey fan and she agreed with me. They got a loan because the incentives were far superior over paying cash. Then, they just paid the car off with the first payment.
In hindsight, we would have done something similar had the rebates and incentives been motivating to us. They had nothing in February though (worst time to buy a car). So, cash it was for us this time.
4. Take your time. Car sales people tend to make you feel pressured to make the deal right then and there. With a huge purchase like a vehicle, I would never do it. Take their card and tell them you will call them back when you have made a decision.
We were a one-car family for nearly a month. I was NOT going to rush into purchasing a new car. Honestly, we needed to save the cash in order to pay for a new vehicle (along with the insurance money we received).
5. Sleep on it. When you find the car you want and you’re ready for purchase, go home and sleep on it overnight. In the morning, after having a night to think about the terms and the other options you’ve seen, you may feel differently about the choice than you did in the heat of the moment of shopping.
Since we found our van online, we had a few days to sleep on it. In fact, I would have probably rushed the purchase had my friend not been visiting from out of town. I’m glad we waited because we found the better deal through CarGurus versus the van on eBay.
6. Be wise about your trade-in. If you’re trading in your old car, take steps to get the highest value possible for your vehicle. Mention the trade-in to the dealer only after your negotiation for the purchase price of the new one is complete. Often, you’ll be treated more fairly by the dealer this way and get more for your old car.
When you discuss your trade-in, let the dealer know that you’re going to ask for bids from other deals to ensure you get the best value. The bid you receive will likely be a bit higher, and the amount you receive for your trade-in can vary widely from dealership to dealership.
Don’t discount the special features you may have added to your vehicle too. When we were doing the paperwork for our van, we overheard another negotiation (it was hard not to hear since the cubicles are so close together). The man had a special rack on his vehicle that cost several thousand dollars. The dealer was going to short him on it but eventually met him closer to his request. Don’t give them anything unless you get a fair value in return.
7. Go shopping when the next year’s models first come out. In about September every year, when the new car models come out for the following year, dealerships often have great incentives and sales to get rid of their inventory of the old models. This can mean great savings on a brand-new car that’s perfect for you.
When we have control of the timing, we will definitely make a purchase in the fall. Unfortunately with our past two car purchases, that was out of our control. Since you know, time your purchases right and you can get a better price.
8. Negotiate. Never take anything at face value. When we called to inform the dealer we would be coming to look at the van, I didn’t even start to negotiate there. I wanted to do this in person. After we looked at the van (didn’t even test drive it because it was nearly the same as our other van), I started the dialogue.
They came down another $1,000. That may not seem like a lot but since the van was already drastically reduced, I was satisfied. During the negotiations, I did mention that the van had been sitting on their lot since October and used the timing (in February) to my advantage. People wanted brand new models more than used vehicles. I think that helped.
By using the tips above, we were able to save around $7,000 on our recent car purchase! The biggest factor for us was shopping online and being patient. Had the timing been in our favor, I think we would have saved even more!
How have you been able to save on your car purchases?
Comment and help other people find ways to save money on a car purchase!