Buying a car is a major purchase. Over the entire course of your life, you may only buy a vehicle 13 times — make sure you choose wisely. Use these tips to help yourself get a good deal during your next car-buying adventure.
Smart Strategies for Buying a Car
1. Do Your Research
Start by doing your research. Look at different vehicles and compare their costs versus their features and consumer ratings. After you know what you need and want, look into how much a car like that costs. Websites like Consumer Reports, Edmunds, and Kelley Blue Book make it easy.
While a car with super luxurious finishes and a giant engine may be attractive or appealing to you, odds are you don’t necessarily need those features. They may be nice to have, and you may be able to fit a few of them into your budget, but make sure that you understand how adding certain features changes the amount you will pay for the vehicle.
“First things first: know what you have to have,” explains Amanda Roth, Manager at Thomas Subaru in Cumberland, Maryland. “Is AWD necessary, do you have to have leather upholstery? Be prepared with this list in your mind or written down for reference.” Once you compare the benefit of the feature with its cost, you may find that there are some things you can live without.
2. Figure Out a Budget
Remember — the right car for you is the one that fits your needs AND your budget.
In this case, your budget needs to include two measures — the monthly payment and the total cost of the vehicle. You may be able to afford to make a certain monthly payment, but that doesn’t mean you should. Dealers will often find ways to get your monthly payment down, such as by increasing your loan term, but you don’t want to be stuck with a 72-month car loan — the vehicle might not last that long! Instead, make sure you negotiate cost on the basis of the total price of the vehicle and ensure that you have enough left over each month that you could afford to cover an emergency — car-related or otherwise.
3. Understand Ownership Costs
Also, keep in mind that the purchase price is only one factor when buying a car. There are fuel costs, and keep in mind that larger engines tend to use more gas. You may also need to pay taxes, delivery, or dealership upcharges. If you want maintenance included or an extended warranty plan, that could cost extra too. Then, there are add-ons. Heated seats, GPS navigation, security systems, and other options come with their own price tags.
4. Always Test Drive
Once you know what you want and how much you can spend, head to a dealership to try out some vehicles in person. “While it’s important to have done your research on which brands are ranked highest for durability, resale value, and dependability, it's most important to just get out and test drive vehicles,” says Roth. “You will know after a good drive if that vehicle is right for you or not… Keep an open mind on brand and models. Just because there’s an article you read from a trusted source that highly recommends a specific vehicle, doesn’t mean it’s the right one for you.”
Buying a New Car
For some people, buying a new car makes the most sense. “New cars have a much better warranty and you’re not buying someone else’s problem,” explains Joe LaGratta of Timbrook Automotive in Cumberland, Maryland.
New cars are also easier to find, and you will enjoy more financing options, but be prepared to negotiate the price. Subaru Manager Amanda Roth recommends forcing the dealership to take a price cut: “If purchasing a new vehicle, you just want to be sure that you’re not just getting rebates, dealer cash, or incentives off the price. Be sure that the dealer is discounting from their profit also.”
When Does a Used Car Make More Sense?
Buying a used car may make the most sense for several reasons. According to the National Automobile Dealers Association, choosing a car that is an average of three years old every time you buy a vehicle will save you around $130,000 over the course of your lifetime, or an average of $30,000 per vehicle.
Used cars come with additional cost advantages too. You can get more value for your money, in some cases, moving up to a luxury car. Many car owners find it less stressful to own a new car. Plus, registry renewals are often cheaper, and the vehicle is generally cheaper to insure.
Saving Money on Car Ownership
However, pricing of a used car can be tricky. They do tend to cost less, but there are several factors that go into setting a price. “On pre-owned pricing, it’s a little complicated,” explains Roth. “Does the vehicle have new tires? Are there any dents or scratches that should be considered that would affect the price? Be reasonable about these things. If there are minor issues, it may win you a slight discount in price but don’t expect thousands off the price.”
Also, look at where you buy your car. Choosing a reputable used car dealership could cost more than going through an individual, but it can be smart. “Good dealerships weed out problem cars,” explains LaGratta. “They will deliver a quality product, so all the worry is taken care of.”
Finally, remember there are things you can do to reduce the cost of car ownership. For instance, attending a driver’s education class can help you save money on car insurance. You can also opt for a vehicle with better fuel economy.
Buying a vehicle can be many things — an act of prestige, a way of transporting a new family, or a necessity — but it should also be fun. “The most important thing to keep in mind while shopping for a vehicle, in my opinion, is to have fun,” says Roth. “Don’t get stressed, do some research and buy the car you like.” With a little research, a few test drives, and a careful budget, you can find a car you love to own.