A new car (or new-to-you car) is a major financial transaction. Luckily, there are several tips you can follow to save as much money as possible when you go to buy or lease a new or used car. But before getting into these helpful tips, let’s establish something first: are you sure you even need a new car? Often, your old car can be repaired so that you can get another two or three years out of it. To determine whether this is a more financially savvy option for you, you’ll need to do some research and maths to weigh cost of repairing vs. buying a new car.
If you’re certain it’s time to spring for a new vehicle, though, make sure you consider these 6 tips to save money on a new car.
How to save money on a new car
- Set a proper budget. Generally, it isn’t wise to spend more than 15% of your annual income on your car and related expenses. It will depend on your other financial obligations and what expectations you have for your new car. Don’t forget to factor in maintenance and repair costs for your specific make and model.
- Finance the right way. Paying cash for a new car is obviously the ideal situation (usually), but if you don’t have ten thousand quid laying around, you’ll probably have to finance. Try not to finance for more than a four-year period unless your interest rate is obscenely good.
- Time it right. Certain times of day, the month and the year tend to have lower prices at car dealerships. For example, the end of the day, the end of the quarter or the end of the year, when dealers are feeling pressure to meet their sales quotas.
- To lease or not to lease? For most people, buying will work out to be more cost-effective. But there are some situations when leasing can be preferable, so you need to do your research and consider your personal situation.
- Try not haggling for once. Here’s a great, comfortable way to get to the dealer’s lowest price without haggling. Call or email several dealerships and tell them you’re going to be buying a car that same day from whichever dealership offers the best price.
- Be smart when buying used. If you decide to buy a used car, don’t feel bad about being demanding and suspicious. Just assume at the outset that whoever is selling the car is trying to rip you off, and go from there. Get the car inspected, research the car’s true value ahead of time, etc. And keep in mind that you’ll usually be getting a bigger bargain on a used luxury vehicle compared to a used economy model.