Buying a new car can be a huge expense.
For some, it may be the second largest purchase in life, just after buying property.
Doing your homework before you buy is essential to getting a good deal.
The average price of a new car is over $36,000 so it’s no wonder most people go into debt buying one.
But you don’t have to be one of them.
Here’s how to buy a new car without going into debt.
Buy a Used Car
The single biggest way to save a whole lot of money when buying a new car is to buy a used car.
Of course, it’s very easy to still go into debt even when buying a used car.
In fact, the average price of a used car has hit a 13 year high, according to USAToday, pushed up by a crush of late-model leased vehicles hitting the market.
With the average price of over $19,000, up 17.6 percent compared to the same period five years ago, buyers may worry.
However, compare the average price of a used vehicle to a new vehicle at $36,000 and you’re still going to get substantially more bang for your buck when buying used.
Sell Your Old Car
While many people choose to give their old car away, especially parents to their kids when they’re ready for a newer car, instead you should always choose to sell your old car.
No matter how old and rundown your old car is, you’ll always be able to get some money for it.
That money should then be saved to help purchase your new car.
Always sell your old car privately in order to get a bigger payout.
List your car for sale online, park it at frequented car buying hotspots in your neighborhood and make sure to put a for sale sign in the window that’s easily visible.
Make a Budget
If you’re going to buy a car without going into debt, you’re obviously going to need cash to do so, but just how much do you need?
Once you’ve settled on a few potential makes and models (try not to get too set on any one thing – or you could end up overspending or waiting a long time to get the car you want) look up the models on Kelley Blue Book.
This will help you figure out how much you’ll need to pay and how much you can realistically afford.
Now that you’ve decided on the type of car you want to buy, it’s time to start saving.
Hopefully, you’ve been able to sell your old car and put the money towards buying your next ride.
When saving you’ll also want to look into the fuel economy of your new car and whether your insurance and registration will increase if you’re buying a newer model.
For most people on a modest budget, it will likely take from 6 to 9 months to save up enough money to buy a used car with cash.
You’ll also want to factor in maintenance costs to your calculations. Create a savings plan and start today.