Many young professionals have tagged along for an automotive purchase, but there’s a first time for everything—and that includes purchasing a vehicle all on your own. According to BankRate.com, many consumers leave thousands of dollars on the table when buying a new vehicle because they aren’t aware of key money-saving options available. Online financing and purchasing opportunities are creating a market that’s more accommodating to car buyers, but only if they know to take advantage of these savings.
If you’re a young consumer looking to make your first car purchase, you might not know all of the tips and tricks that can save money. Don’t let your ignorance cost you huge piles of cash. Here are five practical tips for getting the most value out of your upcoming vehicle purchase.
Go in with a fixed monthly spending limit
Many prospective car buyers might have money saved for their car purchase, and may also have an existing vehicle they plan to trade in. Do your research before stepping foot into a dealership. Online loan calculators can help you figure out the approximate monthly cost of the required loan, depending on the vehicle you choose. Alternatively, you can enter in your max monthly auto loan bill and use that to determine the appropriate loan size. The Department of Motor Vehicles recommends consumers identify this max spending limit and strictly enforce it on car lots to avoid taking on more costs than they can afford.
Shop at the end of the month
Car sales representatives typically have monthly quotas they are expected to meet. Consequently, as the end of the month approaches, some of those salespeople will be eager to sell more vehicles in order to hit their quota. This can result in better negotiations and a lower overall price, according to BankRate.com. Another good time of year to shop for vehicles is when the newer model year is being rolled out onto dealership lots.
Find your auto loan online
Online banks and credit bureaus now make it easier than ever to apply for auto loan financing. By submitting applications to a handful of these institutions all at once, you can shop for the most competitive interest rate and loan terms, and often get a better financing deal than what your auto dealerships will provide.
Shop for a competitive extended warranty
Many auto dealerships try to sell not only a car, but also an extended warranty package that isn’t always consumer-friendly. These extended warranties can be costly to car buyers and negate some of the benefits acquired through sale negotiations. An extended warranty is nice, but consumers before agreeing to any warranty deals, a smart shopper will review the rates available at online warranty providers like Carchex.
Explore your options at different dealerships
If you have a pre-approved financing package and have our sights set on a specific make and model, don’t settle for the first dealership you visit. Shop around at competitors and see if they can offer better terms. Edmunds.com auto sales expert Phillip Reed says the best thing consumers can do is create a bidding war between dealerships. You can even do this by getting a quote from one dealership and then calling around to see if another salesperson can offer a better deal. A few extra calls can create hundreds of dollars in savings, so it’s well worth your efforts.