When it comes to major purchases, buying a car is up there with buying a home and deciding where to go for college. Whether you're buying a lower priced used vehicle or a shiny new one, you'll be spending thousands of dollars on an object that you hope will safely get you from point A to B and back again for years to come. Although a Nationwide survey found that people believed car buying to be as stressful as jury duty, doing their taxes or public speaking, there are things you can do to streamline the process and to help you keep more of your hard-earned money in your pocket.
#1 Choose the Best Time to Buy
Some times of year are better for saving money on a car than others. Some days of the week are better for purchasing a car than others. As the Christian Science Monitor reports, August and December are two of the best months for a car purchase. In August, you have dealers who are trying to clear out the current year models to make room for next year's, so you end up with a lot of discounts and purchase incentives. In December, the pressure is on for dealers to get rid of the old and make room for the new, so you also usually see a lot of deals and discounts as well.
If you can go to a dealership during a weekday, you might enjoy a more pleasant car-buying experience. Saturdays and weekday nights tend to be the busiest times at dealerships, making it more difficult for you to negotiate.
#2 Set a Budget
Come up with a price you can comfortably afford for your car before you start talking to dealers. Keep that number in your head at all times. Having a firm budget will help you resist any temptation to upgrade to the newer model or to add on features that you don't really need. It's helpful to keep the total cost of a car, as well as the monthly cost, in mind when shopping. The monthly cost will give you an idea of whether you can afford the payments. The total cost will help you see if buying a particular car fits in with your overall financial goals or not.
#3 Browse and Negotiate Online
In 2015, Time reported on a survey by Accenture. Three-quarters of the 10,000 people surveyed said that they would rather handle all aspects of purchasing a vehicle online. Online car buying does reduce the pressure of face-to-face negotiating. It also allows you to get several quotes for a variety of dealers, without having to travel to each one.
The structure of online car sales is different from in-person sales too. According to Bankrate, the average buyer can save up to $2,000 working with a dealer online, since online car salespeople are compensated differently from in-person salespeople. Their commission is based on volume, not price, so they still earn the same amount even if they give you a bargain basement deal on a car.
#4 Get Financing First
Just as you would shop around for a mortgage or for the best price on a car, you want to shop around for a car loan. Don't assume that the dealer is going to give you the best rates and the best terms on your loan. It won't. Getting pre-approved for an auto loan before you head to the dealership will help you understand how much car you can afford to buy.
#5 Don't Forget About the Trade-In
If you're trading one car for another, it pays to do some research before you head to the dealer. Look up the value of your current car in the Kelley Blue Book or do a quick internet search to see what your old car is selling for online or through auction sites. Trading your car into the dealer might be the easiest way to unload, but you're likely not to get the best offer for the car when you trade in. It's up to you to learn the car's resale value and to decide if selling it privately is worth the time and effort.
Before you head to the dealership, stop by Coosa Valley Credit Union and get pre-approved for a car loan today. You can also contact us when you're at the dealership and we'll walk you through the pre-approval process on the spot.