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» How to Buy a New Car

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Learn how to save money on a new car in our how to guide.
Learn how to save money on a new car in our how to guide.
It’s exciting whenever you buy a car, but when you buy a new car the excitement goes to a whole new level. It can be daunting, but getting a good deal on your new car can also be a fun challenge if you have the right frame of mind and know the ins and outs of the new car sales game.

Your first new car purchase can be smooth and worry-free, but as with any other major purchase, you can get scammed if you’re not smart.

Play it safe and follow these simple steps when it comes to your new car search and find the right new car at the right price on your own terms.

1. Select the Right Time to Buy

If you can plan your purchase ahead of time, choose the right time to buy and you’ll save money. You can get the best deals if you buy a new car in late December or from July through October.

At the end of December, dealers are trying to break their year-end sales records, so prices are at a low. Starting in July, dealers are looking to clear out space for new models, so sale prices start popping up then. So it’s in your best interest to plan ahead and start shopping before your current car is on its deathbed. If you wait until you’re in desperate need of a new car, you probably won’t get the best price possible.

Try to time your new car purchase at the very end of the month, when dealers are trying to meet their quota and may be more willing to negotiate prices!

2. Take the Time to Research

Once you know what kind of car you’re interested in, take the time to research it online. Find out their Kelley Blue Book value, and then look up actual sales prices from online car sales websites such as Cars.com, Yahoo! Autos, Edmunds.com, and Autos.com.

Print out the best prices and put them in a folder to take with you when you go to the dealership. This gives you bargaining power for your visit. If the dealer can’t beat the prices you have from the online vendors, then you have the choice to order online.

It’s also a good idea to research the dealership. See if you can find a dealer that pays all of its employees a salary rather than a commission. You’ll be more likely to get a better deal.

3. Consider Your Credit Score

Credit scores can keep you from getting the car of your dreams or increase your car payments astronomically. Many of the terrific prices that you see in commercials are only valid for “qualifying customers,” and in most cases that means customers with pristine credit. When you’re getting ready to buy a new car, get a copy of your credit report.

Take the opportunity to check it over for any mistakes, and if you see something on there that’s not right, take care of it immediately. But even more importantly, take a copy with you. If your score is low (usually under 680), you may want to apply for a loan in advance from a place that specializes in high-risk auto loans. This will save you a lot of headaches and loan refusals.

Your other option is to pay with cash if you have low credit, but that robs you of the ability to pay on time and improve your credit score.

4. Think Through Your Trade-In

Trading in an old car can certainly save you cash, but you should take as much time preparing for the trade in as you do for the new purchase. Know how much your current car is worth and how much money, if any, you still owe. If the amount owed is relatively little, it’s in your best interest to take the time to pay it off before you trade it in. Yes, the dealership may be willing to pay it off for you, but remember that the loan is still your responsibility. If they don’t pay on time (and what incentive do they have to do so?), the late fees are yours to pay.

5. Order What You Want

If your dream car isn’t on the lot, you can have the dealer order one to your specifications from the factory. You might think that this would cost extra, but there’s no reason that it should. They’ll just integrate your car into their weekly order, and the car won’t be sitting around on their lot taking up space and generating interest fees for the dealer.

Generally, you’ll have to pay a deposit. It’s a good idea to put this deposit on a credit card. That way, if you’re unhappy with the car when it arrives, or if the dealer attempts to increase the amount of the deposit after the car arrives, you have some protection from the credit card company. If you’ve paid with a check, you’re probably out of luck.

6. Check Your Warranty

When you buy a car, you want a good warranty. If you buy it from the dealer, you will almost always pay more, because not only are you paying for the warranty package, but you’re also paying a markup from the dealership.

Consider getting a warranty direct from a vendor that has an A rating from Standard and Poor’s or A.M. Best. Carefully check the deductible to make sure that you won’t be charged per part repaired rather than per repair. And make sure there’s a money back guarantee in case you’re not happy.

7. To haggle or Not to Haggle

For some people, negotiating is easy, but for others it’s like pulling teeth. The best thing that you can do to protect yourself and get the best price possible is to walk into the dealership with copies of your research from Step 2. This allows you to prove that you can get a better price elsewhere. If the dealer won’t meet or beat the price, then you can just leave. No haggling required.

Watch this video tutorial on buying a new car for more great tips on getting the right car and the best value for your money:

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