September 6, 2012
How to save money on a new car purchase
Buying a new car is one of the more expensive purchases a consumer can make. Aside from a home or paying for college, perhaps no purchase requires a bigger financial commitment than a new car.
While purchasing a new car can be intimidating, there are ways buyers can take control of the car-buying process and save money as a result.
• Shop online. Much of the fear associated with buying a new car can be traced to the dealership. Consumers fear being taken advantage of by aggressive salespeople who work on commissions and are motivated by selling the car for the highest price possible. However, shopping online removes that fear and has made it easier for consumers to save when purchasing a new car. Unlike traditional automobile salespeople, Internet department sales staff often earn their bonuses on how many cars they sell, and not how much they sell each car for, which motivates them to get consumers the best price. Shopping online also removes the hassle of visiting the dealership and the often awkward and uncomfortable back and forth of the negotiating process on the dealer’s turf.
• Get preapproved for a loan. Another way to save is to shop around for the best financing deal before shopping for a car. Many people seek preapproval for a loan before shopping for a home, and the same can be done when buying a car. Shopping around enables you to get the best deal, which isn’t always the one you’ll find should you rely on the dealership to arrange for the financing.
• Negotiate everything. One of the more agitating things about buying a new car is the seemingly endless list of add-on fees that suddenly appear after the buyer and dealer have agreed on a vehicle price. Dealerships often want buyers to think such fees are non-negotiable, but that isn’t actually true. Even if the contract has already been drawn up and includes the fees, until you have signed on the dotted line, those fees are negotiable.
• Shop in a buyer’s market. Near the end of the year is typically the best time to buy a current model vehicle. Between August and October is a great time to find a deal, as dealerships are looking to move inventory to make room for next year’s models.
Some consumers, however, find it difficult to shop for a car at the end of the year, as the costs associated with the holidays make it tough to afford a new car. If that’s the case, consider shopping for a vehicle at the end of the month, when salespeople and dealers might be motivated to sell cars to meet a monthly quota.
• Shop around your current vehicle. If you have a trade-in, don’t simply assume you’ll get the most money for it via a trade-in. You might earn more money selling it privately, or you can shop the vehicle around to several dealerships as a straight sale. Getting the best price for the vehicle, whether that’s through trading it in or selling it privately, can lessen the financial blow of buying a new car.
Buying a car no longer has to be an intimidating process where the consumer is fearful of getting fleeced. Nowadays, there are a variety of ways the consumer can take control of the process and make out financially.