This is a guide on how to get a car as cheap as possible. Learn how to plan, make the right financing choices, haggle to cut costs, and more.
Below is an interview with Nick Wilson, an expert loan officer and the founder of AdvanceSOS – the quick loans connection service. Read on to catch everything Nick says about money-saving.
#1. Have a solid budget plan.
Find a car you can afford that matches your needs. Set a budget of how much you can pay upfront and how much you can pay monthly. Refer to your budget to find your car. Do not waste time researching the specifics of cars that you will not get anyway.
Make a shortlist of potential cars of different brands within your budget. A shortlist keeps you goal-oriented and practical when choosing a car if you do not have a set idea of what car you want. You can avoid falling into the trap of saying yes to just anything in the name of your dream car.
#2. Opt for cheaper specifications.
Some cars are more expensive for having fancy features you may not need. Features like power accessories (windows, seats, steering, brakes, roofs), automatic transmissions, heated seats, padded seats, fancy paint, sunroofs, convertible tops, carpet, sound insulation, and lighting can be unnecessary. If you want to save money, choose necessity over bling.
#3. Research the ways to finance a car.
There are many ways to finance your car. You can use a Personal Contract Hire (PCH), Personal Contract Purchase (PCP), Hire Purchase (HP), or Personal Loan (PL). There are also financing options to cut your upfront payment or monthly payments. Research which way is best for you before visiting a dealership. You can ask your broker the right questions on how to cut costs when getting a car.
#4. A better credit score means better rates.
A high credit score is an advantage when getting a car loan. It increases your creditworthiness and trustworthiness, so lenders will be more considerate, and their offers will be kinder. You may be able to get lower interest rates and looser repayment schedules as well. Settle your debts—if you have any—before applying for a car financing loan. Learn more about how to improve your credit score today!
#5. Time it right – you could save 10% to 20%!
Car dealers have sales quotas that they need to reach monthly, quarterly and yearly. Sales quotas are a big deal for dealers as failure to meet them can mean demotion or termination. Thus, the end of the month, quarter, and year can be the best time to buy when dealers are eager to sell. Their eagerness to sell can save you 10% to 20% plus provide some extra benefits.
Pro Tip #1: The best time to buy a car is by the end of the year when all sales quotas meet together.
Pro Tip #2: Do not buy a car during the beginning of any quota cycle nor on a Saturday. Saturdays are very busy for car dealers, and they may not be as open to negotiation with you when more customers are looking for cars that day.
#6. Buy pre-registered cars – save up to 70%!
A pre-registered car is an unowned car registered to a dealership, broker, or leasing company. You see pre-registered cars at every car dealership. All the cars in showrooms and used test drives are pre-reg cars.
Pre-registered cars are brand new vehicles manufactured within the last six (6) months. Some are even unused and only pre-registered to meet specific manufacturing quotas. The DMV considers pre-registered cars as sold cars. Being considered once-sold can knock off as much as 70% of the price. However, dealers do not advertise pre-registered cars, so ask your dealer or broker yourself.
#7. Part exchange your current vehicle
If you already have a vehicle, and you only need one, you can part-exchange it. You can ask your dealer or broker if you can trade-in your old car as partial payment towards your new one. If you disagree with the offer, you can try selling it to a friend instead. There are also car buying service companies that can help you out.
Either way, use your old car to relieve some of the financial burdens of buying your new one. If you have no need for two, it’s best to sell your old one as soon as possible anyway.
#8. Higher deposit = lower price
Financers encourage higher deposits to lessen sales risk, so car dealerships have the authority to offer discount prices for higher upfront payments. Also, the more you pay upfront, the less you have remaining to pay off as well. Less debt means smaller monthly repayment amounts, so there is less you’ll have to worry about when it comes to repayment schedules.
#9. Don’t be afraid to haggle
Take nothing at face value. Car dealers inflate car deal offers all the time. There is always room for negotiation and haggling. Compare car dealerships to get the standard price, then go from there. Stay calm. Excitement can cloud your judgment, and your dealer will see this as a sign of weakness. Your dealer might not let you haggle as much as you can because you seem too willing to buy right there and then.
Continue to seek the best offers, even on the extra bits. Ask your dealer or broker if there is any way to cut costs. Ask for free warranties and services or accessories you can opt-out of buying.
#10. Repay your car finance early
Any late or non-payment of your car finance will result in extra charges. You will pay more than necessary, and that is money lost forever. Plan out your repayment strategy before getting a car financing loan. If you can, have an emergency fund worth 3-6 months of your repayments ready. In case of cash emergencies, you can draw upon your cash reserves and save money. Taking care of your job will also keep you receiving a stable salary and never miss payments.
Try to the best of your ability to not roll over or default on your car loan, or you could lose your car and the money you have paid so far both at the same time. You will put a dent in your credit history that you may never again erase. Take care of your finances and save yourself some money.
Bio Info
Written and compiled by Amanda Girard, a skilled writer, and content creator. She has a broad understanding of the lending industry. As a result, she can distill complicated concepts into content that is easy to understand.
