Before making a large purchase, I make sure to do lots of research on the car buying process. It's so stressful!
Learn what exactly worked for me in my car buying process and how I saved thousands on a brand new car.
Take action now: Before we begin, take action now, and download the debt thermometer and 12-week savings challenge. Both of these printables are fun and motivational, which will push you closer to your goals. 💸
1. Finance ahead of time
If you plan on financing a car, make sure to shop around at credit unions and banks in the area.
See who can give you the lowest APR for a loan.
You'll be surprised that banks are offering 5% while a credit union next door provides 2.9%.
That 2.1% can potentially be thousands in savings!
Some car dealerships will also have special promotions where they are financing cars for 0 to 1.9%, which you will also want to consider.
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2. Negotiate via email
Negotiating via email is a great way to have a conversation with a salesman for various reasons.
Everything is in writing, which comes in handy when a car salesman “forgets” a discount they were planning on giving you.
You can also think about what you want to say before replying.
Car dealerships are great at making people feel uncomfortable, so at least in an email, you can avoid that.
We live in a time where we can do everything online, even buy a car!
Every major car dealership will have an online inventory where you can see available cars to purchase.
3. Shop around at numerous car dealerships
Before purchasing my car, I visited five dealerships to get the most reliable and fuel efficient car.
I even compared car dealerships online to see who was offering the same car at a lower price.
For example, I'd check my local town's Toyota dealership and then check all of the other Toyota dealerships in a 150-mile radius to make sure I was getting the best price.
See what different car dealerships offer in the area after you buy the car.
I bought a Toyota, and with that, I got two years worth of maintenance services (oil changes, tire rotations, etc.!) and free car washes for life and I got a $750 rebate just for graduating college.
My car dealership participated in price matching.
If I found a similar car for cheaper than at their dealership, they would price match the vehicle, which is pretty awesome!
4. Research car's value
Before purchasing a vehicle, check the car's online MSRP and compare this price to what the car dealership is offering.
These prices should be reasonably similar.
If they aren't, you need to talk with your car salesman (preferably via email!) and see what's up with the price difference.
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5. Buy towards the end of the month
Just like other businesses, car salesman have to meet a quota on the number of cars they've sold.
If they haven't met their quota, they may be more likely to give you a better deal if you buy towards the end of the month rather than the beginning of the month.
6. Ask for accessories
I asked the dealership to throw in a tint. It's much easier for them to throw in accessories and services rather than further discount a car.
You could ask for oil changes, regular maintenance services, a bike rack, all weather floor mats, and a million other things depending on the car you choose.
7. Don't mention your trade-in until last minute
There is less room for negotiation when your car salesman knows that you're trading in a car, so don't say this until the very end.
If they ask if you're trading in a car, either say no or you aren't sure.
This will help you get the best discount on your car since they want to give you the best deal, so you buy the vehicle.
8. Think hard about the extended warranty
The shadiest part of the car dealership is the finance department.
This is where car dealerships make a considerable chunk of money, with the finance department profiting over 50% in the extended warranties they sell.
Do you need an extended warranty on a brand new car that is already covered with a 3 year/36,000 mile warranty?
If you decide down the road that you need an extended warranty, purchase it as you move closer to the end of your warranty. Make sure to read the fine writing as many extended warranties have wronged people many times by not making it clear what they cover.
The first time I bought a car, I was 17 years old and was pressured into purchasing an almost $2000 warranty on a vehicle that was valued at $6,000. Big mistake. Never used the warranty either.
9. Increase your credit score before shopping
A low credit score can dramatically hurt your chances of getting a good APR (annual percentage rate also known as your interest) if you decide to finance a car.
For example, I know someone who got a 0.9 APR rate because their score was in the 800's, while someone who is in the 600's or lower may have a much harder time getting a low rate.
Tip: Do you know your credit score? Get your free credit score here (and no it doesn’t hurt your credit score!). You’ll also learn strategies to improve your credit score. A high credit score will save you money when you purchase a car, rent or purchase a house, take out a loan, or when you apply for a credit card.
10. Shop for new cars during the end of the year
Closer to the end of the year, older models will need to sell to make room for the new year's models that are coming in.
I went to a Subaru dealership, and there was one 2018 model still on the lot – it was largely discounted because the 2019's were starting to come in.
Usually, the current year version of the car is similar to the car for the upcoming year, so why not buy the current year model at a discounted price?
Are you trying to SAVE more money? Here are my top tips to save more money.
1. Want to save money when shopping? Ibotta is a free money-saving app that gives you cash back at almost any store. You get real cash – not points. Ibotta is my go-to app for saving money on groceries (even fruits and vegetables!), clothes, travel, and a lot more. You even get $10 in your account just for signing up through my link here.
2. $5 Meal Plan is an affordable meal planning service that helps you save money, time, and stress by meal planning. For $5 a month, you get a pre-made weekly meal plan and complete shopping list, and access to a drag and drop meal plan builder. You even get a 14-day free trial by clicking here.
3. Trim helps you negotiate cable and internet bills, analyzes and gives you spending updates via text, and will find and cancel unwanted subscriptions for you. Trim users saved over $1,000,000 last month alone. Sign up for Trim here.
4. Cushion is a new finance app that is unlike any other app on the market. Cushion is an app that refunds bank and credit card fees. You can expect refunds on things like late fees, overdraft fees, monthly service fees, account maintenance fees, ATM fees, credit card interest charges, late fees, and more!
Are you trying to MAKE more money? Check out my recommended tips here.
1. Do you want to work from home? Gogokid is currently hiring teachers to teach English. Pay is up to $21 per 40 minutes with the curriculum provided for you.
2. Make money by filling out surveys on Springboard America with your honest opinion. It's that easy.
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- Healthiest Foods For A Tight Budget
What's your top money saving tip when purchasing a new car?
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