Money Saving Tips for Buying a New Car
The purchase of a new car is a major financial undertaking and it is important that you have all the available information to hand before you make your decision. This article provides some practical tips and advice to enable you to negotiate the best possible deal and ensure that you have considered all the available options.
Before you can save money on your next car you need to first understand what exactly you want. Itís worth taking some time to think about what is and isnít important in your next vehicle and what you are willing to compromise on. Consider some of the following;
a) Will it be used primarily for city driving our longer journeyís. City driving might require a more compact car choice to enable you to find those tight parking spaces and get good fuel efficiency. Long journeys might require more comfort
b) Is it a working car or is it just for fun? In which can consider whether you are willing to trade speed for fuel efficiency.
c) Will other drivers use the vehicle, and if so how will this effect insurance premiums?
Good research is the key to saving money on your next car. Get a copy of the most recent vehicle trade handbook. This varies from country to country but it contains a comprehensive guide to the values or car types and models depending upon the mileage they have accrued and their age. You can also now find information online.
Try some of these links which list virtually every make and model of car manufactured and what you should expect to pay for them.
Refer to this information when you see a car you are interested in to ensure that you are not paying over the odds.
3. Where to look
Three primary sources for finding a car are dealerships, via private sales through an individual and online.
Some of the most popular places to pick up a good car and save money include;
You can save significant amounts on car sales through online traders because very often they donít have the overheads of traditional high street dealerships. Buying new cars can see you save anywhere between 15-20% through such online traders as those listed above. However also consider buying a used car online as these can often bring about the most lucrative savings, particularly through auction sites like eBay.
A friend recently bought a pick up truck with a guide price of £1000 for £200 on eBay and it turned out to be excellent. . However, the major drawback is that not seeing the vehicle may leave you open to buying a dud.
Traditional high street dealerships usually add a mark-up of between 15-25% to cars that they sell, so be willing to haggle.
Private sales are where the best bargain are to be found because individuals may not be so aware of current market prices, therefore enabling you to pick up the perfect vehicle at a reduced price. Look in the classified sections of local papers and specific car trade magazines.
4. New Versus Used
Whilst owning a new car may be important to some individuals, some of the best bargains can be found through used car sales.
Some dealerships often accept used cars in trade for new models that they sell in order to smooth the sale. Very often dealers donít have the space to hold onto these used vehicles and are keen to secure a quick sale to get them out of the showroom. This especially true where, for instance, the dealer is tied into one car company like, Chrysler, but accepted a Ford in part exchange. They wonít be permitted to advertise it in the showroom and will want to sell it off quickly. Itís worth checking out the used car section of your local dealer to see if some bargains can be had.
As mentioned previously most dealers and also those who sell privately, will add a mark-up of between 20-25% on the cars that they sell.
Never pay the ticket price always take time to inspect the car and see if there are any minor marks that you can use to build an argument for a price reduction.
Some useful questions to help you save money include;
a) Whatís your best price?
b) I really want this car but not at this price, what can you do for me?
c) What discount can I get for paying cash?
Always ask for their best price three times before you give in, persistence pays of! Be prepared to walk away or say no if you are unhappy about the price, itís amazing what an effect this can have on the price!
Also try to purchase your car towards the end of the month, ideally in the last 2 days. Most car dealershipís sales targets run from the beginning to the end of a month and if they are desperate for a sale to increase commission rates, they are more likely to give you the best possible deal.
Finally always see what other extraís you can get thrown in, ask a question like ďIíll accept that price if you throw in a free tank of gas/petrol.Ē
6. Inspect the vehicle thoroughly
A sure way to save money on your next car is to get it inspected before you buy. Take a mechanic friend with you to give the car a once over and always take it for a test drive. The test drive often reveals underlying problems with steering, suspension or unusual squeaky noises if they exist.
Most motoring countries now offer a comprehensive checklist that you can get a free copy of to help those with little knowledge of cars spot any immediate problems.
There is a superb car buying checklist that can be applied to any vehicle in any country, you can view it online at;
7. Decline finance deals
Most car dealers make huge sums of money on finance deals that they talk you into getting in order to purchase your car. Whilst it is tempting to get a car on credit, avoid it wherever possible or shop around for a low interest loan from a bank instead. Most car finance deals have high interest rates of between 15-25%, which on a £10,000 car will add between £1500 and £2500 to the final price of the vehicle during the term of the credit agreement.
8. Associated costs
Before you make your final purchase think about other costs associated with your car once you have purchased it.
a) Buying certain types of cars will push up your insurance premiums and may also make it more attractive to car thieves.
b) Diesel engines are much more fuel efficient that gas/petrol engines, saving your lots of money on fuel. Also, many diesel engines can be converted to run on bio fuels like cooking oil, which can save you even more money on fuel in the long term as well as helping the environment.
9. Avoid Impulsive Shopping
Many buying decisions are made on impulse and occur because of how we are feeling. Sales people play on these aspects because our body language or what we say often give away clues about our feelings at the time. If we are in a bad mood sales staff may try to convince us that we need to make a purchase to make us feel better, if we are feeling happy, then sales staff may convince us that we deserve a new car because of our hard work. Because purchasing a new car is an expensive business make sure that you choose the best time to go searching and avoid buying decisions that are based on how you are feeling. Before you leave the house you should have done some basic research and be clear about what you want, that way it is unlikely that you will be talked into buying a car that is unsuitable.
The importance of good research when buying a car cannot be over stated and will undoubtedly save you money in the long term. Ensure that you take into account all of the possible factors including the cost of insurance and finance deals, as an impulsive buying decision can prove more costly overtime with rising payments. Remember that whilst sales staff will be keen to pressure you into buying, you are under no obligation to do so and donít be afraid to walk away, make sure that your head rules your heart and not the other way around!
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