10 Ways To Save Money When Buying A Car

On average, spending on transportation is a family’s second-biggest expense after housing in the USA. Whether you need a new car or just want an upgrade, there are several ways you can cut auto bills and put more money toward savings or other expenses.

Only Pay Cash

Financing a car may be your only option if you don’t have the cash to pay for a car in full. If you can do so, however, perhaps by going for an older model, your monthly outgoings will be hugely reduced. This can often more than offset any extra maintenance repairs for older vehicles.

Pick the Right Time of Year

February and August are often excellent times to buy a car. Sales usually are slow following Christmas and January, and at the height of summer, so dealerships slash prices to offset this. The end of each quarter can also be good times to buy, when dealers push to hit their sales targets. Buying certain types of vehicles in unpopular seasons, such as convertibles in winter and four-wheel-drives in summer, are also good ways to make this work
for you.

Pick the Right Time of Day

When negotiating, sometimes even the time of day can have an effect. This is particularly true toward the end of the working day on Fridays when salespeople are keen to make up for any deficits in weekly sales targets.

Buy Used

This one may seem obvious, but with depreciation remaining the largest expense for owners, and new cars often costing tens of thousands of dollars more than used models, the financial advantages are huge. Going for mid-2000s models can strike a good balance between not being too old and not being too expensive.

Wait to Buy New

If you must buy new, then at least wait for the initial excitement of a brand-new model to die down for a few months. There’s no more expensive time to purchase a car than immediately after release, when press and consumer attention on a model is at its highest, and dealerships can get away with charging more.

Be an Informed Negotiator

Before you even enter the showroom, ensure you know what type of car you’re looking for, and do research to see what the average selling prices are. Consider which specifications you truly want and need, and don’t allow yourself to be upsold useless features. It’s also a good idea to negotiate on the basis that you’ll be paying on finance, even if you’re not. Better deals can be struck that way, and you can decide to pay in cash at the end if you go for it.

Factor in Insurance Costs

Insurance costs differ due to many factors, including age, driving experience, and specific model of car. Ensure you’re well-informed on how much the insurance costs will be for the vehicle you’re looking for by shopping around online, so you can be realistic about how affordable your new car will be overall. It’s also usually better to avoid purchasing credit life or credit disability insurance from the dealership itself, who can often try to hard-sell you these. Stick with individual or
employer policies.

Research Potential Maintenance Costs

While buying used is usually a great way to save thousands of dollars, educate yourself on potential maintenance costs for the model you’re shopping for and factor that into your budget. Some cars can be notoriously reliable even if they’re older, and going for these models can save you a lot in the long run.

Also Factor in Fuel Economy

As well as insurance and maintenance, fuel economy is another factor which can massively influence the total actual cost of a new car on top of the payment for the vehicle itself. If you want to save money, going for four-cylinder engines rather than six-cylinder and manual transmissions rather than automatic are two ways you can maximize fuel economy in the long-run.

Consider if You Need a New Car Now

Finally, it’s worth considering if you truly need a new car right now. By taking an honest look at your budget and deciding to delay buying a new car, you can massively reduce the amount you’re spending over the years, easily tens of thousands of dollars over the course of a decade.

There are many aspects to buying a new car. As well as deciding on a model, factors such as buying new or used and the way you negotiate a sale can collectively have an enormous impact on the amount you spend on auto bills. By considering at least a few of these factors when purchasing a new car you can easily save a lot of money in the years to come.