Buying a car is a major investment decision, and it can be very overwhelming because there are numerous options to go for even when you know the type of car you want. However, once you decide that it’s time to have a new ride, go for it and remember to exercise due diligence not only to get the best but also to save as much money as you can.
Salespeople from different dealerships are there to make money and if you do not have enough information on prices, do not know how to bargain effectively, or you are just excited to buy a car, you might end up paying more than you should. To avoid such a case, use the following defensive tips and cut costs when buying your next car.
- Choose Your Insurance Carefully
Some dealers will not sell you a car, especially if you are buying it on credit without insurance. However, do not agree to join an insurance company of their choice but rather one that you are comfortable with. The dealer may have the insurance as an add-on but if you feel that you are not satisfied by the rates, go ahead and shop for car insurance services that may suit your needs & convenience, for example, youi car insurance, for safeguarding the heavy investment on your brand new car. Pay attention to the details covered by different policies from different providers. This will help you buy auto insurance that you need rather than paying for covers that you will never need. At the end of it all, you will save yourself some money.
- Compare Prices From Different Dealers
You have to do your homework right if you want to save money with your next car purchase. In this case, do thorough research on different dealers not only in your area but in other places where you can easily access. Compare their price quotes, including the details covered in the quotations to avoid missing out some hidden costs.
Apart from comparing the prices of different cars, check the car features too to make sure you are comparing similar cars. Sales people are very good at convincing you why you should buy a certain car while highlighting some of its features. Unless you know the features you are looking for, you might be convinced easily and pay more for a car that costs less.
- Paying Cash Is Always The Best
You know that a car is one of those assets that depreciate with time and if you are buying one today on credit, then you will be incurring both the depreciation and interest cost at the same time. In most cases, the car will depreciate faster than you are settling that loan during the first few years, thereby discounting the value of your future income and labor. Therefore, if it is possible to avoid buying the car on credit, the better.
If you do not have enough cash to buy one today, it won’t hurt to wait a little longer so that you can get your money right first. Consider using your old car for one or a few more years if at all, it’s still working well. You can also decide to rent it out to make more money, look for an extra job or start a business and with the time you will be able to afford your desired car without acquiring a loan. This way you will save yourself unnecessary hefty interest payments.
- Maintenance Plan Offered
If your dealer is offering you a maintenance plan whereby they will be providing additional protection for your car, check the details. They could be offering general servicing for your car or extended warranty, which means the plan covers replacement of electrical or mechanical car parts or both.
While this sounds like a good deal, consider the money you are paying towards it, and evaluate if it is worth it. Some of the maintenance plans you get from a dealer can be quite expensive and rather than them paying for the services; you can opt on paying for the services yourself. You can be surprised how much money you will save by paying for the services by yourself.
- Trade-In Your Old Car Or Buy An Old Car
Since a car is expensive, you can go for the trade-in option and therefore save a lot of money on your purchase. However, you will need to agree with a dealer first on the price of the new car before telling them you need a trade-in and then carry out a thorough research on how much your old car should cost. If you don’t do this, some dealers will want to gain both from your old car and from the new car which is quite unfair, and you end up saving little or nothing. Another option is buying an old car to avoid acquiring hefty loans that weigh a lot on you later. You will only need to apply due diligence or work closely with your mechanic to ensure you get a nice old car. This will save a lot of cash.
Do you feel like you need a new ride already? Well, these defensive tips will help you get the best deal and still get your desired car.