10 Ways to Buy a Car for Less

After a house, a vehicle is probably the biggest purchase you’ll make. Unfortunately, while your house might appreciate — that is, gain value over time — your car will eventually turn into a nearly worthless hunk of metal, plastic and upholstery.

Rather than pour oodles of cash into something whose value is going to drop like a rock, use these 10 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?

Of course it is. How could it not be when Edmunds reports that the average new car loses 11% of its value as soon as it’s driven off the lot? That means your $20,000 car is suddenly worth less than $18,000. Then, after five years, it will likely be worth only slightly more than $12,500.

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 planning to get a car that’s only a year old, in some cases a new car may be cheaper when dealer and manufacturer incentives are factored in. Edmunds has a list of vehicles for which it may make sense to buy the new version rather than one that is last year’s model.

2. Do Your Homework

Regardless of whether you’re buying new or used, you need to do your homework first. That means researching the going price and available options for the cars you’re considering.

Of course, KBB and Edmunds are good places to start, but don’t stop there. These sites tell you what cars should be selling for, but, in the end, capitalism rules. Supply and demand where you are will 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 and get talked into a “good deal” that really isn’t a deal at all.

3. Get Your Trim Right

OK, this one might seem silly to the gearheads in the audience, but for everyone else, make sure you’re doing an apples-to-apples comparison when shopping around.

I’ll go ahead, risk looking the fool and confess to this mistake. I recently bought a Toyota Sienna with an LE trim but was comparing it with vehicles with an XLE trim when doing online research. It wasn’t until after I got the vehicle home that I realized my mistake.

Though I still got a good price, it wasn’t the totally awesome deal I thought I had negotiated.

4. Embrace High Miles

I don’t think I even owned a car yet, but I still remember that old Kia commercial with the car driving until the odometer on the roof rolled over to 100,000. Wow! The car was so cheap and yet you could still get 100,000 miles on it. It was downright amazing!

How times have changed. Today, your car is almost guaranteed to get 200,000 miles or more. So why are you freaking out about buying a used car with 110,000 miles on it? On many models, once the mileage starts going north of 100,000, the price starts dropping through the floor. By saying no to these high-mileage cars, you’re saying no to a lot of good deals.

I speak from personal experience. Prior to my most recent purchase, I was driving a 2004 Oldsmobile Silhouette. I bought it about five years ago for nearly half the KBB suggested price. Why was it so cheap? That’s because it had nearly 170,000 miles on it, and no one wanted to take a chance on such a high-mileage vehicle.

However, my current vehicle at the time was a 1997 Plymouth Grand Voyager that was pushing 300,000 miles. The Oldsmobile miles came largely because the one previous owner had a two-hour round-trip highway commute each day. I did my homework on the reliability of the car, bought it and drove it to 265,000 miles before it started giving me trouble a few months ago. Now, it’s been replaced by a 2008 Sienna that has 141,000 miles.

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.

5. 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.

However, the very best day to shop could be Dec. 31. Not only is it the end of the year, but there may be fewer car shoppers, meaning more incentive for sales reps to close a deal. Plus, if you’re shopping for a new car, dealers may be eager to make room on the lot for next year’s models.

At the same time, 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.

And you might want to avoid shopping in the spring if at all possible. When tax refunds start hitting bank accounts, there could be a lot more shoppers in the market and that could drive prices up.

6. Forget the Monthly Payment

We drive by a car lot on our street nearly every day. Right on the corner is a shiny new SUV with “$198” plastered to the side. My obviously not-yet-money-savvy teens and tween have all on separate occasions oohed and aahed over the car and its low, low price.

That’s exactly the response the dealer is undoubtedly hoping for. It’s also why the sales rep wants to talk monthly payments as soon as you walk in the door. If they can get you to think 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 to make an overpriced vehicle fit into even meager budgets. As a result, your auto loan may last almost as long as the average American marriage. Shockingly, nearly 20% of new auto loans have rounded the six-year mark and are heading into the territory of a seven-year repayment term.

Avoid the trap of ending up with reasonable payments for an unreasonable length of time by negotiating the total price rather than a monthly amount. To make sure you are negotiating in the right price range, ask a local bank or credit union if they offer a preapproval process so you can find out in advance what you can afford.

7. Don’t Mention Your Trade-in

Along the same lines, don’t mention your trade-in unless it absolutely has to be part of the transaction because you still owe on it and can’t afford two payments. However, in that case, I would gently suggest you consider whether it would be better to wait until you’ve paid off your current car before buying a new one.

Otherwise, tell the dealer you haven’t decided what to do with your current vehicle. Once you have negotiated the cost of your new purchase, you can then negotiate the price of your trade-in. This method helps ensure you not only get the best price on your new car but that you’re maximizing what you receive for the trade-in.

8. Think Twice About Trade-in Promos

Another trick dealers use is luring in shoppers with promises of huge trade-in values. If you can push, pull or drag in your old vehicle, you’ll be guaranteed thousands of dollars for your trade-in.

That sounds good until you realize that the offer applies only to certain vehicles on the lot. The sales representative will steer you toward the $15,000 vehicle and enthusiastically share that it will be only $12,000 with your $3,000 trade-in. It sounds like a deal too good to pass up, except you had only planned to spend $10,000.

Or another tactic used by dealers is to bump up their car prices before running a trade-in promotion. Either way, you end up spending more than you wanted to or needed to for your new wheels.

9. Offer to Pay with Green

Buying with cash is a strategy that may or may not get you a discount.

New-car dealers make more then 20% 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, especially if there is a smaller financial incentive for the dealer and the salesperson is eager to avoid the hassle of completing financing paperwork. In my case, paying with cash dropped the price about $500.

However, private sales are where you’ll probably see the biggest discount for a cash payment. Sellers may be eager to unload their vehicles and if you can offer cash, that’s often all they need to come down on price.

10. 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 finance expert Stacy Johnson found a near mint condition $5,000 car.

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 choosing before forking over any money.

This post originally appeared on Money Talks News.

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