How To Save Money On A New Car

Other than buying a home, purchasing a new car is probably going to be the biggest purchase you ever make.You want to get a good reliable car that will last you a long time. But you also don’t want to pay too much for it either. Here are some things you can do to ensure you get the best deal on a new car.

Credit Score

Before you go into the car dealership you’ll want your credit report to look its best. The reason is because the interest rate you get on your auto loan is dependent on your credit score. A good credit score vs a bad credit score can save you hundreds of dollars over the course of your loan.

Now you don’t need to pay up 15 bucks just to see your credit score. Obtaining your credit report is just as good and it’s free. Go to annualcreditreport.com to get a copy of your credit report. You are entitled to see your report free of charge once every twelve months.

Once you get your report you’ll want to look it over to see if there are any errors. Sometimes you pay off a debt and it isn’t removed from your report. Other times you notice you have a few small nagging debts that you can get paid off. Fix your credit report first before going to the dealership to ensure you’ll get the best interest rates possible.

If you are not sure where to begin in fixing your credit, a reputable credit repair service company can help you.

Monthly Payment

One of the ways people end up spending too much for a new car is because they concentrate on the monthly payment too much. When you want to figure out how much you can afford you typically think of a monthly payment rather than the total price of the car. The car dealership will ask you how much you can afford and they’ll find a way to meet your budget.

They will do this by simply extending the length of the loan in order to lower your monthly payment. If extending the length of the loan will lower your monthly payment, you might think that’s good for you. But in reality it’s very bad. Now you’ll be paying for your car for 5 years instead of 3 years and it will probably be a higher interest rate too. What should be important to you is not the monthly payment, but rather the total price you will pay, principal and interest included, over the length of your car loan.

Research

Before you visit the auto dealership come prepared with a wealth of information. You should know before you go what car you want. You should know what the car costs. You should know what your credit score is. You should know what interest rate you should probably get and thus should know what your monthly payment should be.

But the most important research you need to do involves other dealerships. Go to cars.com and look at the prices of the car you want at all the of dealerships in your area. Don’t be afraid to search for dealerships that are a bit further away too. Even if you plan to travel there, you at least can let the dealership you do visit that there are competitors with better prices out there. With this information you’re in a better position to force the dealer to drop their price or they risk losing you to their rival.

End Of The Month

One tip to possibly getting a better deal is to visit the dealership late in the month rather than at the start of the month. The reason for this is because salesmen have a monthly quota they need to reach. If they haven’t sold too many cars the first three weeks they’re going to be dealing the last week of the month.

Show up a week before the end of the month, take a test drive and negotiate with a car salesman. Get their card, turn them down and walk away. You will get a better offer either immediately or over the phone the next day. Even if you don’t, come back to the dealership in the last couple of days of the month. Meet with the same salesman to see if you can get an even sweeter deal. If he/she has not met their quota for the month they may be desperate enough to give you a killer deal.

Anum

Anum Yoon is the founder and editor of Current on Currency. She loves all things personal finance, which is why you’ll find her work all over the PF blogosphere.

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