The following is a post from staff writer Crystal at Budgeting in the Fun Stuff, where she writes about finding the balance between paying your bills, saving for your future, and budgeting for the fun stuff along the way.
I have bought two cars in the last six years and helped friends and family buy three others. These are the five tips I would suggest to anyone in the market for a vehicle:
1. Narrow Down Your Choices
If you don’t know exactly what you want, figure it out before you ever head into a dealership. You do not want a huge financial decision influenced by the people who profit based on how much you fork over, right? I would personally suggest that you narrow down your choices to two to three cars at the most. The longer you stay at the dealership test driving cars, the more time they have to wear you down. Reading car reviews will definitely help narrow down your choices.
2. Research the Price
This is the most important advice whether you are buying new or used. Never enter a sales transaction without knowing what a fair price really is or you will not leave with a deal that makes you happy. I personally use Kelley Blue Book and Edmunds.com to research vehicle values before I ever go to a dealership or look at a used car ad. Once you know what the car you want is worth, you’ll have more power in the negotiating process.
3. Research the Options and Warranties
I won’t judge anyone who wants heated seats or an extended warranty, but please look into their actual values before you leave your home. Everything is negotiable in a car sale, even all of the extras. If you know that the extended warranty you want should be $1000-$1400, then you are more likely to say so when the finance manager tries to talk you into it for $2300.
4. Research your Financing Options if Necessary
If you are financing your car, get quotes from banks and credit unions before taking a look at the dealership’s offer. Don’t mention these outside quotes unless the dealership’s quote is worse. If their quote is a higher APR than you’d like to pay, simply let them know that you were already pre-approved by an outside bank at x rate. Many times the dealership will re-examine their initial offering and beat your rate. Every dealership works with 10 or more lien holders, so they often can find you some awesome deals when they are motivated.
5. Stay Strong at the Dealership
All of the research in the world will not save you if get gooey-eyed and weak-willed around sales people. If you can’t hold your own and defend your stance, you will get talked into a billion little extras and end up paying way more than you would ever want to spend on a car. In short, if you may give in, buy your next car on the phone or through the Internet. I personally love the Internet sales departments of car dealerships since they don’t like to get their hands dirty with hard sales.
Am I missing any great car buying tips?
Aside from researching about the important factors above (price, warranty, etc.), car buyers can look also for incentives and rebates to be able to save money and find more convenient ways to pay for the purchase. Find out which models are eligible for these incentives and rebates. Also, there are cities which offer additional incentives for specific car models.
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