How To Maximize Your Savings When Buying A New Vehicle

New Vehicle

If you are in the market for a new vehicle, you may already be looking at listings and dealership ads and wondering what the best way to get the best deal is going to be. Unfortunately, there isn’t a single magic bullet that will help you save hundreds or thousands on a new ride, but there are some tips that can help you keep more of your money.

Since a new vehicle is such a large purchase, it’s important to go into it prepared and informed. To be best prepared, use a debt avalanche calculator to knock down some of your high-interest debt if you have any. To be informed, check out these tips to maximize your savings when buying a new vehicle.

1.    Research

If you have given the prospect of a new vehicle even a little bit of passing thought, you’ve probably already started thinking about what kind of vehicle you want. This is a good thing and it will give you a jumping-off point for your research. You’ll need to go into your potential purchase scenario armed with all of the information you can get.

Look at similar vehicles, popular years, common problems, and of course, common market values. Be sure you research your own finances as well, so that you know your maximum price cap, and if you’re financing, what your largest comfortable monthly payment would be.

2.    Use Depreciation To Your Advantage

Buying a new vehicle doesn’t have to mean “new” new, it can mean new to you, and this can give you a powerful negotiating point. New vehicles lose so much value the moment they are owned and driven off the lot, that buying a used car, even from just the previous model year, can yield huge savings right off the top. This can help you bring the price of a newer vehicle down significantly in some cases.

3.    Leverage Local Competition

If you are looking at a common vehicle, a late 2000s Ford F150 for example, you can easily find comparable vehicles at neighboring dealerships you can use as leverage. By mentioning to one dealer that you saw a similarly-featured truck at a nearby competitor, you may be able to get them bidding over your business.

Since they often put a relatively significant markup on used vehicles, you can also have the dealerships price-match each other, then go with whoever will give you the best financing terms. There may be other benefits that you can factor in as well, for example, some dealerships have perks like “free car washes for life” when you buy from them, so even if they can’t match the price they may still come out on top.

4.    Keep Your Cash Quiet

Sometimes, you know beforehand that you will be able to basically pay cash for your new vehicle. While there are plenty of former used car salespeople on YouTube that can explain the specifics of dealership pricing tactics, suffice to say that if you walk in and tell them you are paying cash, you will pay a higher price than someone who is financing.

The best tactic is to act like you will be financing the vehicle, browsing, shopping, and negotiating like you otherwise would. Once it comes to the pricing disclosures and financing application, you will generally be presented with several options with different terms, interest rates, and monthly payments after the dealer agent has spoken to lenders. Once you have offers in writing, you have two options.

The first option is to break the news that those prices look good, but after some consideration, you’ve decided to pay cash instead. The second is to accept the best financing offer, and simply pay it off early assuming there are no prepayment penalties. The benefit to the second option is that you have taken out a loan, and paid it off quickly, resulting in a stronger reflection on your credit report.

Maximizing Your Savings When Buying A New Vehicle

Buying a vehicle, whether new or used, is a major financial decision. Rushing into it or simply buying whatever comes along can leave you in bad financial shape down the road. If you are short in cash, a lending circle might help, zero-interest, low-cost loans that the group funds. If you have the luxury of planning out your purchase ahead of time, you can ensure you’re saving all you can.

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