Buying a new car is exciting if you have the money to afford one. The auto industry sells 15 to 17 million new cars per year. So how can you save money when you are buying a car? The best advice is to hang onto your old one until it is absolutely necessary to purchase a new car.

When you originally purchase a car, do routine maintenance on it to ensure it is running properly. Inspect your car often to make sure you notice small problems before they become major ones. When you purchase a car, purchase a reliable one. You should consider trading in your old car for a new car when the cost of repairs is more than the value of the car, or the interior is worn and would cost more than the value of the value of the car to replace.

Always keep your car longer, up to 200,000 miles instead of trading it in every few years. The cost of new cars will continue to rise each year, but a brand new car will depreciate quickly. If you purchase a new car and trade it in frequently, you will lose money on low trade-in values. You should plan on keeping your car purchase for 5 to 7 years; this will save you about $400 - $1,000 a year.

When you are buying a new car, choose a smaller model. Smaller models are often cheaper and do not use as much gasoline. The insurance on a smaller vehicle is generally cheaper than the insurance on a larger vehicle. Avoid buying credit life or credit disability insurance from the car dealer. Most dealers will do a hard sell on this type of coverage, but they are overpriced. If you obtain a car loan from a dealer, you will end up paying 100% to 500% more than you should for this type of coverage. Not to mention the amount of money you will spend on interest. Also avoid the service contracts or extended warranties offered on new cars from your dealer. Many of the service contracts and extended warranties have limited coverage and will cost more than the warranty you can obtain through the provider like Warranty Direct.

As you shop for a new car, avoid financing the vehicle through the dealer. Contact your local bank or credit union about car loan rates before you chose to finance through the dealer. Many people think car dealerships make their money on the price negotiation. While dealers can make money off people who don't know how to negotiate, they will flat out falsify financing information to get you to sign up. Some dealers will show you numbers that make up your loan that are invalid. Ask the salesmen to show you all the numbers and check them with your own calculator to make sure the amount they are showing is valid. Some dealers will hide the numbers from you just to get you to lock into a loan with a higher rate or longer term.

It is a wise practice to purchase a vehicle at the end of the month because salesmen need to meet their quotas for the month and the lot needs to meet its quota. Never make your first visit to the dealer at the end of the month because the hungry salesmen will pressure you to purchase the car. Be sure to visit the dealer in the middle of the month and do all the research on the car you want so you know your options before you head into the dealership. Be aggressive when you negotiate the price with the salesmen. Most salesmen are willing to cut their commission if they are behind on their monthly quota.

Always research the vehicle at home before you step foot into the dealership. Use the internet, newspaper, and magazines to find information about the particular car you want to buy. By doing this, you will be able to correct a salesman that is falsifying information. It is a great way to keep everyone honest and on the "same page". Buying a car is the second largest purchase most people will have to make in their lives. Of course, buying a home is the largest purchase you will have to make, but you have a broker who helps you find the home and financing options. With a car, you are on your own and if you aren't properly prepared, a dishonest salesman will take advantage of you quickly.


The Federal Trade Commission (FTC) prevents fraudulent and unfair business practices. If you suspect a dealer is dishonest, be sure to report them to the FTC. The FTC sends out new publications each year that discuss scams on buying new cars. Be sure to look at their web site for the latest publications before you begin shopping for a new car.

You should always have a set budget in mind before you set out to purchase a new car. Think about your needs and your budget and the different types of cars you would like to consider. Learn about all the different types of cars and their features to help narrow down the ones that fit into your needs and budget categories. Determine how long you can afford to pay the monthly loan amount and if you have any money available for a down payment. Before you set out to purchase a new car with a loan, find out your credit score and see what area it falls into. Knowing your credit score can help you figure out what your annual percentage rate should be. It can also help you decide if you need to wait on obtaining a car loan because your credit score is a little lower than you would like it to be.

Most of the time the sales price on the car isn't the best price. Be sure to shop around and look for the same car at different locations. Some dealerships and individual car lots are willing to price match or beat their competitor's price. Always do your research online and find out how much people are selling the car for. Pull up the Kelly Blue Book values to find out if the dealer is on the high end or low end of the total value of the car. Find out if the dealer has a refund or return policy. It would be terrible to purchase a car, get it home, only to lose the transmission 3 days later. You should also inquire about an exchange policy when you are buying a new car. Always ask for documentation of an exchange policy or return policy, never take the word of a salesman.

If you are purchasing a used or pre-owned car, ask the dealer for the Buyers Guide. The Buyers Guide is required by the FTC to inform customers about every used car the dealer sells. The Buyers Guide will supply you with all the information you need to know about the car such as the warranty, the mechanical system, the electrical system, and the extended features. Be sure to use a checklist when you are inspecting the car. You should cross-reference the checklist on the internet and have a mechanic inspect the car to ensure it has been properly maintained. If you are buying the car from an individual, ask about the car's history. Questions you should ask include the following:

• Why are you selling the vehicle?
• How long have you had the vehicle?
• Are you the original owner?
• Have you had any major problems with the vehicle?
• Has the vehicle been involved in an auto accident?
• When was the last tune-up performed?
• Can I take the vehicle to my mechanic for an inspection?

If you are buying a brand new car, the fall season is always the best time to obtain a new car bargain. The auto sales are generally sluggish in the fall and manufacturers are willing to offer large discounts to move the older models off the lot to make room for the New Year's vehicles. The rebates change daily so be sure to ask about the rebate when you go in to buy a new car. Before you go into the dealership, check Edmunds.com and FightingChance.com for the latest incentives that you can use in your negotiations. Many cars have a $3,000 - $6,000 factory to dealer cash incentive. If you don't know about the current rebate, you could lose out on thousands of dollars that will go right to the pocket of the dealership. Many dealers will give up most of their incentive to the consumer, if the consumer asks about it.

Another thing you need to ask about is the "program car". Every dealership has program cars. They are new or fairly new cars that are kept in really good condition. Basically, they are like a company car. The program car is used for test drives by potential customers and generally one of the staff members will keep the car on the weekends. The program cars aren't driven very far so the miles will be low and they will be well maintained. Normally a program car is kept for less than 3 months at a time, so be sure to ask your dealer about it as you can save thousands of dollars on a brand new car that has a few more miles on it.