The sticker price on many new cars is enough to make your jaw drop. Starting with a budget for your new car purchase gives you an idea of the price range that works best for your financial situation. Once you reach the car dealership, the negotiation phase gives you the chance to work your magic for greater savings on the vehicle. The price of the vehicle is only one factor in determining the overall cost. The loan interest rate, fees and insurance are also factors.
Check your credit report to make sure it is accurate before applying for an auto loan. Inaccurate negative marks on your credit report might raise the interest rate on your loan, costing you extra money.
Determine the length of the car loan. A longer car loan lowers the payments but costs you more in interest over the course of the loan. Consider purchasing a cheaper car with only a three-year loan instead of a more expensive car with a six-year loan, to pay less interest without a big jump in the monthly payment.
Read the car section of the newspaper or visit local dealerships to find out about current rebates and buying incentives. Consider the models that offer a rebate on the sales price or special financing rates. Remember that you might not qualify for special loan interest rates if your credit is poor.
Pay as much cash as you can afford toward the down payment on the new car. By financing less you'll cut down on the amount you pay in interest over the life of the loan.
Sell your old vehicle yourself to get more money than you would from trading it in at the dealership. Use the money you receive from the sale as a down payment on the new car so you can finance less.
Scale back on the extra features in the vehicle you choose. The heated leather seats and dual zone temperature control make the ride more comfy, but it also adds cost to the vehicle purchase. Decide which features are necessary and which ones you can cut to save money on the deal.
Expand your options when it comes to items such as color or trim style. Being more flexible when it comes to these finishing touches means you'll have more vehicles available and more negotiating power. If you are very particular about what you want, there will be fewer vehicles available and the salesperson will be less likely to negotiate since he has what you want.
Get insurance quotes on the new car models you're considering before you buy. Call your insurance agent to get a premium estimate. Choose a car with lower insurance rates to save the most money.
Negotiate over the phone, or through email with the dealership's Internet sales department. If the car dealership intimidates you as a buyer, face-to-face contact might give the salesperson the upper hand during negotiations.
Based in the Midwest, Shelley Frost has been writing parenting and education articles since 2007. Her experience comes from teaching, tutoring and managing educational after school programs. Frost worked in insurance and software testing before becoming a writer. She holds a Bachelor of Arts in elementary education with a reading endorsement.