Buying a new or used vehicle is stressful and time consuming. My husband and I will spend weeks on research...and then take even longer to actually go buy something. We've owned five vehicles in the past 7 years and have picked up a few tips for buying a car along the way. 1. Credit Score
I cannot stress this one enough! Your credit score is incredibly important because it dictates the interest rate you'll receive with your loan.
We had very little credit history when we purchased our first car together and walked out with a 7% interest rate. We've nurtured our score since then and purchased our last vehicle with a 1% interest rate! A little TLC certainly goes a long way. (This post contains affiliate links. Please read my Disclaimer for more information.)
Related Post: How to Get in the 800+ Credit Score Club
Say you finance $10,000 (for simplicity's sake) for 60 months with an interest rate of 1%. At the end of the loan you will have paid a total of $256.25 on interest. If the rate had been 7% you would've paid a total of $1,880.72 on interest.
I can think of over 1,600 reasons as to why I would want to build up my credit score!
2. TRUCar Market Analysis
TRUCar Market Analysis is a free, online search that will find the available deals for a specific model in your area. It will also rate whether or not the deal is a good one. They compare the prices to MSRP and the average price other customers have paid.
We used it with our last car and found a dealer that sold it to us for 18% less than the MSRP. One easy search had saved us hours of looking around for the best deal. I highly recommend giving it a try.
3. Read the Reviews
Run the dealership through a rating search with the Better Business Bureau. We had such a terrible experience with a dealership (which I'll talk more about in a second) that we looked them up as soon as we got home. They had an F rating and over 60 complaints! We never would've gone to them had we known. It was was a major waste of time.
The first used car I ever owned was purchased through a friendly private seller. Embarrassingly, I will admit that my parents and I foolishly trusted them and skipped the inspection.
DO NOT DO THIS!
It didn't even survive a full three years before it completely died. The mechanic told me it would cost more to fix than to purchase another vehicle...and that he could've warned me! Mechanics are sometimes more honest than our friends. It was a rough lesson learned. 5. Customer Incentives
Are you in the military? Are you still in college or have recently graduated? Most dealerships have multiple incentive programs. Don't be afraid to ask!
The Hubs and I bought a new vehicle less than a year after graduationand received $1,000 off just for showing proof of degree.
6. Just Walk Away
Like I mentioned in #3, we met with a dealer who literally played every trick in the book on us. He refused to talk prices or finance until he had walked us along the lot and taken us for a test drive. He left us for long periods a couple of times to"check on something with the manager." Lastly, he presented a deal that showed the monthly payment but wouldn't show us the interest rate! He even pressured my husband to sign papers without me when I had stepped away to use the restroom. (Don't worry, the Hubs didn't!)
Why didn't we just walk away sooner? It was our first experience with a tricky salesman and we found ourselves being overly polite and naive. We didn't want to respond with rudeness and in the end he just walked all over us. Learn from our bad experience and feel the power to walk away if you want to.
Buying a new or used vehicle does not have to be overwhelming if you have a proper game plan.
- Make sure your credit score is in order so you can lock in a good interest rate.
- Perform enough research and get a third party inspection to ensure you're getting a fair price.
- Read reviews about the dealership you're interested in before you visit them. It's one of the best ways to avoid a bad experience.
- Ask for a discount or any other customer incentives. The worst they can say is no!
- Walk away from a deal that just doesn't feel right. You should only buy a vehicle if you are 100% certain it's the perfect fit for you.
How do you save money when purchasing a vehicle? Was your experience good or bad?