Saving Money on Buying a Car
Buying a car has to rank in the top five things I most dread doing. Why is it I always feel as if I am being ripped off? Since our last car purchase five years ago I have talked to a lot of people and done a lot of research to educate myself on saving money when buying a car. I do not want to ever feel as if I have been ripped off again. One of the things I have found is that you need to be willing to walk away at any point. Knowing this will keep you motivated to negotiate the best deal you can. If the seller knows this, then there are more willing to give you the best deal they can. That being said, here are some of the ways I plan to save money on my next car purchase.
The first thing I learned is just how much a new car depreciates in value when you drive it off the lot. Why is it that one day it is worth $20,000 and the next as you drive it home it is worth $17,000? That makes no sense to me and has caused me to rethink buying a new car. A car one to two years old is a much wiser purchase. The original owner took the brunt of the depreciation. If there were any kinks to work out, they were worked out with the original owner. This results in less time in the shop and hassle on my end, which in the long run is a money saver.
There are many ways to purchase a car and how you purchase a car has a huge effect on how much you pay for a car. Purchasing a car from a dealer, new or used, is probably the most used option. This is also the option that is going to cost you the most money. Buying a car from a person can result in a much better deal. Some things to make sure of are that maintenance records have been kept, that the person seems honest (go with your instinct here if you don't know them), and that you have a reputable mechanic check it out before you actually buy the car. Making sure that the car has not been in an accident is something your mechanic can tell you, and very important in preventing problems down the road. Low milage on the car is a huge plus.
Paying cash for a car will always get you a better deal than financing the purchase will. If you are talking with a person about buying their car and you have the cash on hand, you are in a great position to negotiate. When a seller sees the cash in front of them and realizes they could be rid of the car that minute and have cash in hand, not the red tape of financing, they are much more willing to lower their asking price.
Another option in purchasing a car that has come about in the last few years is using a car broker. This works by you telling the broker exactly what you are looking for in a car and them finding it for you. There is a fee for this, it should be a flat rate fee, agreed upon ahead of time. These brokers will get the rock bottom prices for you, while making sure that the car is in tip top shape. This is a big time saver and it saves you from doing the haggling, which to me makes it worth it.
Ebay has become a good place to purchase vehicles as well. I am unsure of how you would have a mechanic check it out, as many times the vehicle is in another state than the buyer, but if I were buying a car off of Ebay I would make sure that before the sale was final, I could have a mechanic check it out. Usually the buyer is responsible for picking the car up, which can add to the expense of the car. This is a good option when looking for a car with hard to find options. I have heard of people getting great deals through Ebay.
Auto auctions are another place to purchase vehicles. To use this option you really need to know a lot about the cars you are interested in, as well as being open to different cars. If you go in with only one make and model of car, you are likely to be disappointed. Either they won't have that exact car available, or if they do, you could easily end up getting attached to the vehicle before buying it and wind up bidding more than you can afford or more than it is worth. When dealing with auctions, the purchases are usually "as is", meaning you do not have the option of having a mechanic look it over.
It is easy to spend too much when purchasing a new or used car. Planning ahead and doing lots of research ahead of time, will allow you to negotiate wisely and save money on your purchase. After doing lots of research on this I now believe it is just as easy to get a great deal and save money on car purchases, as it once was for me to overpay. The key is to not get too attached to any particluar car. You have to be willing to walk away, no matter how or where you are trying to purchase a car. Being willing to walk away will save you money on car purchases.