Buying a new car can be exciting! But it can also be overwhelming to consider what vehicle and financing plan is right for you. How can you be sure you’re getting the best deal?
To help with the process, we compiled some expert car buying tips to save you money and get you the best possible deal on your next vehicle.
Car Buying Tip #1: Get Pre-Approved
Getting pre-approved is an essential first step for saving time and mitigating stress in the car-buying process. Just like with a home mortgage, lenders can offer you a pre-approval loan amount that allows you to know what cars you can afford.
But it’s not just about the information. Getting your financing through a third-party lender such as a bank, credit union, or online company is going to get you a much better deal than using the dealership’s financing department. Having your financing locked down before you visit helps you have the upper hand in negotiations.
Car Buying Tip #2: Watch Your Loan Terms
Don’t finance your vehicle for any longer than what is absolutely necessary. While a seven-year loan may sound tempting due to the lower monthly payment, it’s not worth the headache in the long run. If you can afford a larger monthly payment by making your loan repayment period shorter, go for it! You will save money in the long run on interest and feel good knowing that your car is paid off and truly your own.
Car Buying Tip #3: Fix Your Credit
Simply put, the more you can fix up your credit before it’s time to go car shopping, the better the financing deal you will obtain.
Your credit score directly affects your monthly payment, total price paid, and other loan terms by reducing or increasing your interest rate. The better your credit score, the lower the interest rate you will be offered. Even delaying your purchase by a month or two to work on your credit can make a massive difference in financing terms over the lifetime of your loan.
Car Buying Tip #4: Don’t Get Your Emotions Involved
If you get your heart set on one particular car too soon, you may find yourself signing on the dotted line for a deal that is not the best one for you. If you decide it’s the only car for you, and especially if the salesperson can tell how badly you want it, you will be tempted to spend more than you can afford.
Don’t allow yourself to become emotionally attached, and keep your budget in mind. Know what you want upfront, be prepared to haggle, and don’t let yourself be pressured into any last-minute add-on packages that you don’t really want.
Car Buying Tip #5: Consider the Long-Term Costs
A car that is cheaper upfront may not be the best deal if you are going to end up paying more in the long run on service, maintenance, or repairs. You have to consider the long-term costs, so you’re sure you have the best deal now and in the future.
If you are buying a used vehicle, make sure you look for a certified pre-owned vehicle. Also, check the car’s ability to hold its value by looking at the Kelly Blue Book price, and consider having the vehicle inspected by an independent, trusted mechanic before you buy. Don’t forget to consider other factors such as insurance and fuel costs that can be significantly affected by the make and model you choose to purchase.
Holding out for a dependable car that will hold its value well is the ultimate best deal.
Car Buying Tip #6: Shop Around
You shouldn’t buy the first car you like at the first lot you visit. Shopping around is key to getting the best deal!
Look at different dealerships to find the best deal on incentives, add-ons, financing specials, and other savings. Don’t forget to consider dealers outside your preferred brand. You may find a vehicle that ends up meeting your needs better than the make and model you had in mind. Also, try looking for other deals such as discounts for students, veterans, and members of certain organizations.
Car Buying Tip #7: Knowledge Is Power
Knowing the basic facts about the vehicle you plan to buy is essential. For example, knowing the “invoice” price in addition to the suggested retail price will help you in negotiations by telling you how much wiggle room the dealership has before they stand to lose on this deal. Dealerships often rely on their customers not being educated on specific issues, so be sure to empower yourself and avoid getting ripped off!
Also, if you are going to trade in your current vehicle, make sure that you are educated on your car’s current value, so you get offered a fair price, and be prepared to sell your current vehicle separately if necessary.
Final Car Buying Tip? Start With ALEC!
While following the tips outlined in this article will help you get the best deal possible on your next car, you will ultimately need to find a lender that can offer you the best financing. Contact us today to get started!