If you’re like most families, then you must adhere to a pretty strict budget. This means any new purchase, particularly a big one like a car, gets a great deal of scrutiny. However, this doesn’t mean you can’t afford to buy a new car for your family. It just means you need to be wise about it. Here are some tips for finding the best deals on a new vehicle for your family.
Start Saving
There’s no getting around it. Your financial situation plays a huge role in the car-buying process. While it’s possible to get an auto loan, it’s often better to save up for the car and pay for at least a portion of it yourself. For one thing, you’ll have less debt in the long run.
For another thing, it shows you whether or not you can afford a new car payment. Here’s how. Before you buy your new car, plan on putting aside the equivalent of a new car payment each month. Do this for six or eight months. If you can do this faithfully, you know you can probably comfortably make payments on a new car.
Shop for Bargains
It pays to shop for bargains when you’re looking at new cars. Nowadays, with a bit of extra time and the help of the Internet, it’s possible to find a new car at bargain prices. This may entail you comparing costs between several dealerships in your town or even being willing to drive to a dealership located an hour away from your home. Whatever you do, don’t just settle for the cost of the car at the first dealership you visit. You may miss out on good deals if you do.
Buy Last Year’s Model
Patience is a virtue when it comes to buying a new car. Buying a new car at the end of the year before the dealership stocks up on the next year’s models can save you some serious cash. Not only are dealers willing to cut the price to make room for new stock, but many manufacturers will sweeten the deal as well by offering zero percent interest on financing. Car buyers may also get cash back offers from the dealer or manufacturer when they purchase last year’s cars, too.
Certified Pre-Owned Cars
If you can’t afford a brand new car, (and the average person can’t, if they are honest with themselves and consider the massive depreciation in the first year alone) the next cheaper option is to look into Certified Pre-Owned (CPO) Cars. Although these are technically used cars, they go through a vetting process, and only the cars that are still in nearly-new condition are considered for the certification. They get a complete inspection and come with an extended warranty. Best of all, they look new but cost less than many new-off-the-lot cars.
Patience and persistence pay off when it’s time to buy a new car. So, too, does doing a bit of bargain shopping or even being willing to buy either last year’s model or a CPO car.
But a CPO car will generally cost you about $3000 more than if you bought the same vehicle directly from a “Private Party”. So even though they may perform some basic preventative maintenance, you can save big bucks by buying directly from an individual.
Avoid Dealer Financing
One of the big secrets in the car industry is that dealers make big money off of financing your purchase. First, they wear you down by going back and forth with the “sales manager” and when you think you are nearing the finish line, then they send you to the real pro who is the “finance manager” to work you over once again. He will try to tack on extras and then shaft you with expensive financing. Say no to all the extras and bring a pre-approval for financing from your bank or credit union. Even better PAY CASH (actually pay in full with a bank check). This means saving up and paying yourself the interest until you can afford to pay in full. To do this you might have to drive a ‘beater” for a while but it will be totally worth it in the long run.
for how to deal with the dreaded “I have to talk to my manager” sales game that car salesman play.
“For those who don’t know, the tactic where car salespeople keep you in their dealership negotiating for a long time is called “the grind”. They figure that you will not want to walk out without a car after investing so much time.
So, here’s what I do: I tell them, “Look, I’ve purchased a lot of cars over the years, and I am not going to go through ‘the grind’. (They all know what that means, of course.) So, I’m going to give you one shot at getting my business. You give me your best deal in your first offer, or I’m going to wish you a good day and go to your competitor.”
It saves a lot of time and aggravation. I did that on two of my last three purchases and saved a lot of time. By the way, I have no problem leaving some profit in the deal for them so the salesman can feed his family, but I usually save several thousand dollars in the process.
And if I need to walk out, I say “Have a good day”, and then I walk out.”
A friend of mine used a similar tactic to avoid “the grind” when the salesman would say “I need to talk to my manager” he would say well if you aren’t authorized to do the deal let me talk to someone who is. He would also show up about a half-hour before closing time and say I’m going on vacation tomorrow do you want to get this deal done or not? That way they don’t want to hang around and waste time either.
Another tip is that during the “grind” process they often have the room “bugged” either by turning the phone intercom on or having an actual hidden microphone. This way they get the inside scoop on what you are thinking based on what you say while they are out of the room. One tricky way to use this against them is to say things to your friend while they are out of the room like “I really like the one at the other dealer better”, the most we’re going to pay is “X”, or “if they don’t make a deal this time we’re leaving”.
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