5 Ways to Save Money on Your Next Car Purchase
You can always take out a car loan if you want to buy a new car but are short on funds. This is particularly helpful if you’re in dire need of a vehicle but still doesn’t have enough savings in the bank. However, financing a car also requires a down payment. The bigger your down payment, the lower your monthly repayment becomes.
There are easy to save money for a car purchase or car loan down payment. The five most helpful ones include:
1. Doing your research
Knowledge is power, so they say. The more knowledgeable you are of cars and the car industry, the easier it becomes for you to find the ideal vehicle and the best dealerships, as well as to negotiate with salespeople and avoid tricky promos.
Knowing the market value of the vehicle you intend to buy is essential. This will help you figure out a good price and, if you’re taking out a car loan, get a good estimate of the total cost of your loan.
Do your research before visiting dealerships or negotiating with salespeople and lenders. Start by reading about the car market trends and the car you intend to buy. There are a lot of online resources that not only discuss a car’s features and specifications but also shares reviews about its performance on the road.
Do not skip the comments section when checking out car reviews. Various feedback from car owners will provide you with a better idea of the car’s actual performance in real-life conditions.
If you’re taking out a car loan, check for a comparison of interest rates in your area. Various websites provide comparison tools and car loan calculators for free.
2. Negotiating smartly yet nicely
Negotiation is an important part of the car buying process. If you’re not a natural haggler, boost your negotiating power with knowledge of vehicle prices and financing.
Some car experts suggest negotiating over the phone or by email and not in person for more flexibility. You can do this by visiting dealerships, asking for a test drive, and then asking for the seller’s card before leaving. Doing so will throw the salespeople off their game. At dealerships, they come in prepared every day with the answers to all your questions. And you probably can’t think much of good questions to ask, especially if you get overwhelmed by the car’s impressive presentation of the great words of the seller. If you wait a day or two before calling them back and haggling, you can do your research and strategise.
Don’t forget to be nice at all times, no matter how good you are at negotiating. People inherently desire to treated with respect and dignity. Salespeople are driven by the desire to sell cars, hit their sales quotas, and earn commissions but that doesn’t mean that they are heartless and selfish.
If you keep it light, non-confrontational, and professional at the negotiation table, they might be in a mood to give you a better rate and some extra perks.
If you’re not confident of your negotiating skills, bring a friend or family member with you to the dealership. They can do the haggling for you.
3. Not focusing on the brand
Focusing on the car’s brand instead of the important features may not only leave you penniless but also remorseful of the vehicle you drive home. This is simply because some car brands’ reputations exceed or fall short of their demonstrable product attributes.
To get the best value for your money, focus on the top features you want in a vehicle, not on its brand. Start with the most important features that you do not want to compromise, like model year, safety features, engine power, and towing capacity. Then, make a list of your secondary wishlist, like smartphone mirroring, heated steering wheel and seating, and sunroof. Once you have all these considerations in mind, see if they are available in a less popular yet affordable car brand.
You can also compare the best cars available under affordable price ranges. If you want to save a lot of money, buy a less popular vehicle that shares most of the features of a high-end vehicle.
Generally, the base models of popular car brands have fewer features yet pricier tags. If you want to cut cost on your car purchase, you may want to sacrifice owning an entry-level Ford Ranger for a top-spec Isuzu D-Max.
4. Buying on the “best times”
There are certain times of the year when car prices are at their lowest. These include the end of the year and EOFY.
The last week of December is particularly favourable for car buyers because most dealerships offer discounts on their soon-to-be-old car models to “get rid of them” and make room for the new ones.
Most salespeople also have annual sales quotas to meet. If that means lowering the prices of the cars that they need to sell or offering more perks just to hit their quotas, you’re in luck.
The same is true for the End of Financial Year when many automotive manufacturers and dealers in the country launch EOFY car sales, special deals, and optional extras for free to achieve better sales before closing their books for the year.
5. Getting a car loan pre-approval
You'll want to feel confident that you can get a car loan at a great rate. It’s easy to get pre-approved for financing at home.
Most people start with a bank they're already doing business with. There are lots of other great options out there, like Positive Lending Solutions.
Use our car loan pre-approval form to find a car loan at the lowest interest rate may save you hundreds or even thousands of dollars.