The average amount of auto loans borrowed hit a record high of $33,739, with new car buyers in the first quarter agreeing to an average monthly auto loan payment of $569, according to CNBC. Jodi Furman, a personal finance blogger, says that understanding what monthly payment entails and negotiating for the best car prices is critical. Furman has bought 12 cars in 20 years, and she says, “ultimately, vehicles are a commodity. And the truth is that whatever model you want, you will likely find vehicles that are decent alternatives.”
According to Furman, you can save a considerable amount if you have time to research. For example, a four-hour trip to a distant auto shop is worthwhile if you can reduce $1,000 off the vehicle price. Below are useful car buying tips that will help you save money when visiting a dealer.
Define Your Travel Needs and Budget
Before you can visit the dealership, determine what you are looking for in a car, and how much you want to spend. Start with a list of features you want in your vehicle, depending on your transport needs and lifestyle. Then create a car budget that covers the buying price, insurance rates, fuel, and maintenance costs. Having a detailed financial plan helps you highlight cost factors you are willing to compromise without overspending. You’ll also have an easy time describing to a salesperson what you want and, in turn, land the best deals available.
Research Different Models
If you are shopping for a pre-owned or new vehicle, you need to educate yourself about different automobiles. The internet is a great place to gather useful information about different automobiles. Even if you know your options, take time to identify the type of car models available in showrooms and their current value. When you have an idea of vehicle prices, negotiating for good deals becomes easy.
However, consider using finding credible auto-related websites because not all information circulating on the internet is valuable. JD Power asserts that the views of verified car owners are key to a good review. Reliable automobile sites offer insights about price, mileage, automobile features, fuel efficiency, model, and quality. Some websites even provide reviews shared by verified vehicle owners to help you buy dependable cars at low prices.
Find The Best Time to Buy
Once you’ve figured out your perfect car, make an effort to find out when is the ideal time to purchase a vehicle. It is important to note that car prices fluctuate from time to time. There are days and months when vehicles cost less than usual and auto dealerships offer huge discounts on various models. For instance, you have more chances to enjoy big car bargains on Memorial Day because most dealers offer generous incentives, especially on SUVs and trucks.
Experts also recommend shopping for cars during long holiday weekends, Black Friday, and Labor Day. This is because car sellers tend to offer cost-saving programs like cash-back offers, special financing rates, and zero percent loans. October through to December are the best months to enjoy the best car deals because dealers are eager to clear outgoing models and bring in a fresh lineup of automobiles. If you are looking to purchase on a weekday, Monday is the best day.
Pay in Cash
Although it might take you months or a year to save money for a car, the time investment is worthwhile. Purchasing a vehicle with cash helps you save a considerable amount that you would spend on loan interest. Additionally, paying in cash eliminates the need to splurge on an expensive car because you are focused on making a one-off payment within your means. You also get to enjoy high discounts at dealerships. Nonetheless, be cautious when paying with cash to ensure you get the most value for your investment.
Experts suggest you should not mention your payment option until the sales representative offers a written quote that fits your budget. That way, you’re likely to save a lot on your dream vehicle.
Negotiate For The Best Deals
Negotiating for the best car prices should be on top of your list when you visit a dealership. But for you to enjoy positive outcomes, you need to have reliable information about your preferred models. In most cases, you can reduce the marked price by several hundred dollars if you know the car’s market value. So, make sure to gather details about the current pricing beforehand. Also, be willing to walk away from showrooms if dealers insist the sticker price on a car is correct. Most dealers will lower the cost and offer reasonable deals.
You can also win suitable deals if you call an auto dealer in advance and ask them for prices. If you are fortunate, your potential seller might give a cheaper quote than the sticker price over the phone or via email. Shop around for auto loan rates and apply with your bank or credit union. Then take the loan approval with you to an auto shop. This move will help you strike a better deal.
Be Friendly at the Dealership
As odd as it sounds, being friendly with salesmen is beneficial. Sales representatives at auto shops are always looking to build rapport with customers. If you engage them in a friendly conversation, they are more likely to help you get the best deal based on your needs. Nonetheless, there are specific things you should not tell a salesman no matter how friendly you wish to be. To score better deals, don’t inform the dealer you’re a cash buyer until they can give an ideal price.
To ensure you purchase the ideal vehicle, do your due diligence, and strive to negotiate for better prices. Also, know the best time to buy a car and opt for cash payment if possible. For instance, if you wish to buy the latest car model avoid buying when it first hits the showroom. Car experts suggest waiting for a few months or settle for the second most recent model.