It’s a well-known fact that, after a house, a vehicle is probably the biggest purchase you will ever make.
Unfortunately, while your house might gain value over time, your car eventually will turn into a nearly worthless hunk of metal, plastic and upholstery.
Rather than pour oodles of cash into your next purchase, use these eight tips to spend as little as possible on a vehicle that will safely serve you for years.
1. Buy used — usually
You knew this would be the first bit of advice, right?
Drive a new car off a dealer’s lot, and it instantly loses a hefty amount of its resale value. So, it almost always makes sense to buy used. Wait two or three years, and you can often get a much cheaper car that is almost as good as one fresh off the assembly line.
However, if you’re considering a car that’s only 1 year old, a new car may be cheaper in some cases after dealer and manufacturer incentives are factored in.
2. Do your homework
Regardless of whether you’re buying new or used, do your homework first. Research the going price and available options for the cars you’re eyeing.
Of course, Kelley Blue Book and Edmunds are good places to start, but don’t stop there. Those sites approximate a car’s market value. But in the end, capitalism rules. Supply and demand dictate actual prices.
Cruise Craigslist and browse the online ads to get a feel for prices in your area. You want to have a good grasp of local prices before you set foot on a dealership lot.
3. Embrace high miles
It used to be that a car with 100,000 miles on the odometer was living on borrowed time.
How times have changed. Today’s cars are built to last 200,000 miles or more. So why are you freaking out about buying a used car with 110,000 miles on it?
For many models, the price starts dropping through the floor once the mileage goes north of 100,000. By saying no to all of these high-mileage cars, you’re rejecting a lot of good deals.
Not every high-mileage car is a good buy, but if you find a reliable make and model, you can get good quality at a low price.
4. Time your purchase right
There are two facets to this piece of advice.
The first is to buy on the right day. As you might guess, the end of the month is often a good time to buy a car, particularly if salespeople are trying to meet their quotas or qualify for a monthly bonus.
Be aware of seasonal trends in your area, especially if you’re buying from a private party. Four-wheel-drive trucks may be in demand in the winter but cost less in the summer. Meanwhile, convertibles and some jeeps might be cheaper in the fall.
5. Forget the monthly payment
Sales reps want to talk monthly payments as soon as you walk in the door. If they can get you thinking in terms of a monthly cost rather than a total cost, they’ve increased their odds of selling you more car than you intended to buy.
Remember, the dealer can work some mathematical magic — such as extending the repayment term to six or seven years — to make an overpriced vehicle fit into a meager budget.
Avoid the trap of ending up with reasonable payments for an unreasonable length of time by negotiating the total price rather than a monthly payment amount.
6. Think twice about trade-ins
Don’t mention your trade-in unless it absolutely has to be part of the transaction. Instead, tell the dealer you haven’t decided what to do with your current vehicle.
Once you have haggled over the cost of your new purchase, negotiate the value of your trade-in. This method helps ensure you not only get the best price on your new car, but also that you maximize what you receive for the trade-in.
7. Offer to pay with green
Buying with cash is a strategy that may or may not get you a discount.
New-car dealers make a lot of their income on financing and insurance sales, which means they have little incentive to accept cash.
On the used lot, you might get a little more negotiating power. That is especially likely if there is a smaller financial incentive for the dealer and if the salesperson is eager to avoid the hassle of completing financing paperwork.
However, private sales are where you’ll probably see the biggest discount for a cash payment. Sellers may be eager to unload their vehicle, and, if you can offer cash, that’s often all they need to come down on price.
8. Buy from private sellers
Speaking of private sellers, you’re likely to get a better deal from them even if you don’t do any wheeling and dealing. That’s one way Money Talks News founder Stacy Johnson found a near mint-condition car for $5,000.
Dealerships have huge overhead expenses, which means they have prices higher than what you find on the private market. Of course, established dealers have a reputation to uphold, so they may be more likely to stand behind the cars they sell.
If you’re buying from a private seller, be sure to get a full inspection from a mechanic of your choice before forking over any money.
Looking for a great deal on car insurance? Stop by our Solutions Center and read through “How to Get the Best Possible Deal on Car Insurance.”