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This is a guest post.
The title sounds counter-intuitive doesn’t it? I mean, you’re shelling out $1,000s for a car, yet you can save money! YES you CAN! Just because you’re spending a lot of money doesn’t mean that you have to overpay. In fact, the more expensive an item is, the more you have room to save. So here are some simple tricks that you can use to save money when buying a car.
Save on Price
The first way to save, of course, is to save on the price of the car. This means focusing on the negotiation of the price. Too many car dealers like to focus around monthly payment or other tricks – make sure that you’re focused 100% on the price.
When going into a car price negotiation, do your homework. Use the internet and figure out what the Kelly Blue Book Value is, and also what you think the dealer’s invoice price might be. No dealer is willing to take a loss, but they will settle for small gains to get rid of old inventory. As such, realize that a dealer usually gets credits or other discounts from the national company. That means that the invoice price is a good number to shoot for when negotiating, and then the dealer can profit on the discount from the company.
Save on Paying for It
The next thing to figure out it how you’re going to pay for it. As I mentioned above, dealers like quoting monthly payments, but this can be deceiving. If you’re considering getting car loans, or other types of financing, make sure that you settle on price first, and then talk about financing. You see, a dealer can make just about any monthly payment work. You just may have a car loan for 10 years, instead of a normal 3 to 5 year loan.
Finally, don’t be taken in by the products that the dealer is trying to upsell. At the very end of the transaction, the dealer will usually try to sell you an extended warranty or other maintenance plan. However, these plans typically cost more than the total value or repairs and maintenance you will ever put on the vehicle. And many parts that are expensive to replace (like the engine) are usually covered by long power train warranties. Don’t fall for these additions and save some money.