If you’re looking for a new car, here are a few tips that will help you well before you even set foot in a dealership or complete your online purchase.
Before you think of buying a car, know that knowledge is power. It’s a huge mistake to arrive at a car lot without researching the car you want to buy. If you are considering a new car, your goal should be to find the ‘invoice’ price of the car, which is what the dealer paid the manufacturer for the car. This will help in further price negotiations.
Many people get financing from the car dealership, but this often isn’t financially attractive. Dealership interest rates typically run much higher than loan rates from banks and credit unions, even in low-rate environments. Your bank or credit union is a great place to start researching car loan rates, and you can even obtain ‘relationship discounts’ that you won’ find anywhere else.
Ensure you get a written confirmation of the quote from a financial institution, You can present it to the dealership and use it to negotiate a lower interest rate.
New and Used Cars
Often, investing in a gently used car is seen as the best way to save money when buying a vehicle. New cars always depreciate the moment they leave the dealership.
Utilize the Internet
It’s much easier to buy a car online instead of from a dealership. You avoid the hassle and the online option is a benefit for many car buyers, helping you avoid a misstep that could result in you paying more than you should.
Buy Something You Can Afford
If you are considering shopping for another car before your current vehicle loan is paid off, you should reassess if you can really afford to buy another car. You could choose the better option, which is to wait until your current vehicle is paid off. Once that is done, you could continue driving your old car and set aside your usual monthly installment amount, saving it for when you invest in a new car.
Purchase Price Over Monthly Payments
Ensure that you always negotiate your interest based on the price of the car, instead of the monthly payments you will be making to the lender.