Buying a new car is a pricey decision to make – but your next new car doesn’t have to completely break the bank. If you know how to shop smart, you could actually save significantly and pay less.
Try these tips before buying your next new car. They could score you big savings.
1. Shop Around to Get the Best Value for Your Trade-In
One way to save money off the total price of your next new car is to hand over your old car as a trade-in. The dealership will automatically deduct the value of your old car off your total purchase price. However, when you’re trading in a car, the dealership may not give you what it’s actually worth
Dealerships are in business to make money. So, while the dealership will sell your trade-in, their goal is to make as big a profit as possible. That’s why a dealer is likely to lowball the value of your old car – they want to pay less and make more money.
But you don’t have to trade your car in at the dealership. While that’s a common option, you can – and should – shop around to get the best value for your vehicle. You can contact other dealerships and used car lots to see what others will pay you for your trade-in.
Before you agree to trade your old car in at the dealership where you’re buying your new car, do some research. Check out your car’s value on sites like Edmunds, Kelley Blue Book, TrueCar, and CarMax to determine how much it’s worth. You can take the money you make right to the dealership with you when you’re buying your next car.
2. Don’t Mention Your Trade-In Until You’re Ready to Buy
Here’s another trade-in tip: keep the fact that you have a vehicle to trade in quiet before you’re ready to buy a new car.
Scoring savings on a new car requires negotiation, and dealerships like to haggle. If they know how badly you want a car, or how much you’re willing to spend, they’ll push harder to try to get you to pay a higher price. The less they know, and the more firm you are during negotiations, the more likely they are to offer a better deal.
And if a dealer knows you have a trade-in on the table, they might use that information against you. For example, if you’re trying to negotiate a car’s price down to $20,000 from $24,000 and the dealer knows you have a trade-in, they may offer you a price of $22,000 and shave $2,000 off with the trade in. However, if the dealer doesn’t know about your trade-in, they may be more willing to hit the rock-bottom price of $20,000 before the trade-in – giving you a total price of $18,000.
That’s why you should keep quiet about your trade-in until you’re ready to make the purchase official.
3. Search and Compare Online to Find the Best Price
In order to save money on a brand-new car, you need to know your market. It’s important to know the MSRP, or sticker price, of the make and model you’d like. But it’s also important to know what different dealerships and sellers are pricing the vehicle at.
Before you settle on a dealership to buy your car from, make sure you search online and compare pricing. You can search for the year, make, and model you’re interested in and easily see what packages and pricing different sellers in your area are offering. This allows you to get all of the most important details before even speaking with a salesperson.
And you’ll also be able to see who’s offering the best deal. Armed with this knowledge, you’ll be ready to head to the dealership and negotiate a fair price. But in order to do this, you’ll need to spend time comparing prices and finding deals.
4. Ask for an Itemized Price List
Once you’ve found dealerships that have the vehicle you want at a price you like, it’s time to get even more information. Dealership pricing can be complicated and confusing, so you’ll want to visit the lot and ask for an itemized price list.
An itemized price list breaks down every little detail that a dealership is charging you for. From the actual sale price of the car to added packages and extra features to taxes to the title and tags, the itemized price list will have it all nicely laid out. And this will let you see if the dealership is adding any extras you don’t want – or markups you don’t need to pay for.
If you see anything on the itemized price list that looks like a markup or an extra, unnecessary fee, you’ll be able to point it out and negotiate with the dealership. This could save you from paying hundreds of dollars that you don’t need to.
5. Secure Your Financing Before Heading to the Dealership
It’s common for anyone buying a new car to worry about financing after they’ve picked out their vehicle and where they’ll buy it. After all, financing is available at every dealership, making it convenient and straightforward.
However, if you secure your auto loan through the dealership you’re buying your car at, you could wind up spending more money. If you get a loan with a high interest rate or a long loan term, it could become quite costly with interest and fees over the years. Typically, dealership loans come with higher rates and zero discounts.
Do yourself a financial favor and make sure to shop around for financing before you’re ready to buy. Check out your bank, other local banks, credit unions, and other potential lenders online. These external lenders might offer better, more affordable loan terms, like lower interest rates.
6. Wait Around for the Year’s Best Sales
Finally, once you’ve done your homework and are ready to buy, you might be able to save even more money by waiting until there’s a big sale. Throughout the year, auto dealership mark cars down – and waiting for one of these discount events could net you bigger savings.
According to Bankrate, the best months of the year to buy a new car are October, November, and December. During these months, dealerships need to meet monthly, quarterly, and yearly sales goals, all at the same time. And that makes salespeople more incentivized to lower prices and make a great deal.
In addition to the later months of the year, you can also find deals and sales on:
- President’s Day
- Memorial Day
- Black Friday
- New Year’s Eve
Ultimately, no matter when you shop for your next new car, make sure you do your research before heading to the dealership. Taking the time to search online, compare prices, and look for specials and sales can result in big savings. It could get you a new car for much less.