Purchasing a car is something most of us have to deal with from time to time. A car is one of the largest purchases we need to make and it does not appreciate in value. Because a car depreciates in value, it is extremely important to get the best deal possible. There are things that we can do when purchasing a car that will help save thousands of dollars. Here are some ways to do that:
Always buy a used car– A new car depreciates as soon as you drive it off the lot. This results in a loss of thousands of dollars out of your pocket within minutes. This is not something the average American can afford. Let someone else take that financial hit and buy a used car that has already lowered in depreciation.
Buy a car on the last day of the month– This is a great strategy for putting you ahead of the car salesman. Chances are you don’t need a car today, but the car salesman probably needs to make their quota for the month and you are one of their last chances. Because of this, the dealership might be more willing to make a deal with you than other times of the month.
Don’t say more than you need to the salesman– This is sometimes hard to do but one of the most important things. He who speaks first loses, especially in sales. The salesperson is aware of this as well because it is a basic principal for any type of sales. Only say what you need and don’t give the salesperson a lot of information to go on. The more they know about you, the more fuel they will have to pick at your emotional side to get you to buy. If you make an offer, don’t say a word after that. Let the salesperson speak even if it goes into an uncomfortable awkward silence. In this case, silence is golden on your part and more money in your pocket.
Consider the total price of the car– Chances are if you are really buying a car you can afford, the monthly payment will be in your budget. What you need to look at is the total cost of the car and not what you want to pay monthly. Why? The car dealer can simply add another year or two to the time of the loan to make the payment lower but keep the price the same. When the salesman goes back to talk to their manager that’s what they are doing. Not reducing the total price of the car. When you negotiate the total price of the car they have to actually reduce the price if they want you to buy it.
Do your homework and shop around– Get onto websites like Edmunds and Kelly Blue Book to find out the value of the car you are looking for to learn what it’s worth. Then check private and retail to see how much the car is selling for in your area. Believe it or not, there might be a difference. Once you know how much the car sells for on average you will know if you are getting a deal or not.
Finance on your own– Shop around yourself for financing and get pre-approved before you look at cars. Chances are you will be able to find a better deal than what the car dealer can offer especially if you belong to a credit union. This will also help you stick to your budget.
If you are patient when purchasing a car, chances are you will know a good deal when you find it. My husband and I used these techniques and managed to purchase a vehicle at 90% of its value from a retail car lot. We spent the time researching the vehicle we wanted, test drove different versions, and shopped around both private and resale. When we found the car we knew we wanted we told the salesperson exactly how much we wanted to walk out the door for the total price including tax and title. We didn’t budge with our offer and got the deal we asked for.