Cars are expensive; no denying that. However, making some smart moves can save a big amount. Making the right deal, keeping all the necessary features and conditions in mind, and keep the car insured are some of the many moves you have to make to save big on your car’s purchase. Many believe that after housing, a car purchase is a good investment, and so when it comes to buying one, they find it ok to spend a big sum of money. Considering the car buying trend, here is a guide about how you can save big when spending your hard-earned money on your dream car.
Decide Your Budget
This should be your first step to buying a car. Even though it’s your first or 3rd car, setting a budget benchmark is necessary. Take this tip, for instance; the sticker price of the car should be equal to or less than 20% of the annual income. Consider your affordability before anything else. If you spend less on your car, you save more for other stuff. Buying a car doesn’t mean paying for the sticker price only; other expenses like a parking ticket, surprise maintenance, surprise maintenance, depreciation, financing, fuel, taxes, registration fees, and licensing also follow. Combined, all these build up to multiply the actual price by 120%.
Buy a Used Car Instead
Buying cars is no more considered an investment. This asset is quickly depreciating. Buying a brand new item is always emotionally thrilling, but getting a used item is pretty much of better value. When buying a used or lease car, be very careful in taking the advice of the salesman; they usually convince customers to buy the most expensive ones. Therefore, you should know your numbers so you don’t spend extra later.
In 98% of the cases, buying a used car proves to be right because the newly manufactured cars lose their value at a fast pace. As soon as you drive the most trending car, it loses 10% of its value, and 40% value right after a year. However buying a used car from brands like Hyundai, Toyota or Mazda can be a sane decision since they are in better condition at 15000 miles drive and save your 20 – 30% amount.
Don’t Get Add-Ons by the Dealer
The new car buying process involves hours of meetings with the dealer, negotiation over the price and trade-in, and finally settling on something. However, at the time, this is not the end of the case. Dealers, at times, try to sell you add-ons that include gap insurance, paint protection plans, tire protection plans, and extended warranties. They do so because such deals make them earn a hefty amount of money along with good sales. These add-ons are often over-priced and due to lack of time or experience, the buyers get manipulated by the dealers; unable to get a fair price and spend way over their budget.
Unaware of the added mark up on these add-ons a buyer can sign up for up to 300% mark up. A good strategy to snap out of this manipulation is to simply say no to all the extra offers and deals. The stakes are higher when you are dealing with long-term loans; dealers find more room in such deals to sell the add-ons. The one strategy they use is to tell you, it’s only a little more amount you’ll be paying every month. On the offside, that money becomes an additional burden on your monthly budget. You can always get the extended factory warranty later, maybe, three years from now on.
Find the Best Price on a Car
Never fall for the first price you come across. The Internet has to offer several dealers and prices for a similar car. So you can get a pricing quote online as well, rather than visit the dealers in person. Many of the dealers are getting better at sharing the transparent price, however; many still try to sell with higher price tags with unnecessary add-ons. Therefore, take the price quote from several dealers before you fall for the tricks of a shady one. Learn how to negotiate your way around the pricey offers and dealer tricks to get to the best one.
Many people are not comfortable dealing in person so you can always negotiate your deal via call or email. If you feel like the conversation is going south, you can always call it off. Following these few tips can save you a great deal of money and future stress. The key is to conduct research, meet several dealers, and then finalize a car.