More than 80%Links to an external site. of car buyers pay above the sticker price for a new car. This is unfortunate, and it mostly happens to first-time car buyers or college students with little industry knowledge. You can save a lot of money when buying your first car if you do certain things right. Here are four tips to help you spend less on your first car.
Identify the Car You Want
Ask yourself why you need a car and how you intend to use it. Do you need a vehicle to commute to work or school or will it be just for weekend adventures? Do you have a family? Do you need a new car or will a used one be okay? What are the pros and consLinks to an external site. of buying a new or a used car?
Answering these questions will help you determine the size of the vehicle to buy, the budget, and the overall cost of owning the carLinks to an external site.. Evaluate your lifestyle and find out the car features you need.
Set a Budget and Get Pre-Approved for Financing
Calculate how much you can afford to spend on a car and stick to your budget. Know your income and decide how much you can pay monthly for the car without straining. While setting your budget, factor in recurring costs like vehicle registration, car insurance, and maintenance.
Understand your financing options before walking into a dealership. Know your credit score and ask your bank about prequalify for auto loanLinks to an external site.. Your bank is most likely to give you the best interest rates than any dealership.
Shop Around
Once you settle on a car and set a budget, visit different dealerships and compare prices. You don’t need to drive around shopping for a car. Instead, you can check out your options on the internet from the comfort of your home.
Consider things like shipping costs, the price, and the return policy as you shop. If you’re buying a used car, ask for the vehicle history report and have it inspected before you pay. Only buy a car from an authorized car dealerLinks to an external site..
Negotiate the Price
Negotiating the car priceLinks to an external site. will save you hundreds or thousands of dollars if you do it right. Because you’re a first-time car buyer, familiarize yourself with car-buying lingoLinks to an external site. before you engage a car seller. Do this whether you’re buying from an authorized dealership or a private seller.
Ensure you know the car’s current market value and keep your options open. Know what you can negotiate over and what you can’t. Also, focus on the out-the-door price and not the monthly payments. Quote your price so they know what you can afford. And be prepared to walk away if you don’t get a good deal.
Buying a car for less requires a great strategy. Research your dream car and set a budget. Shop around and compare prices and the available offers before paying for a vehicle. Know your financing options, but pay in cash if you have the full amount. Also, negotiate the price and do not hesitate to walk away if you don’t get a good deal.
