How to Save on a New Car

If you’re in the market for a new car there are certain things that you need to know in order to not get fleeced.  A car is one of the biggest expenses that you will have and any way to cut down on this expense is a great idea. You could, if you do it right, literally save thousands of dollars with the tips below.  So, without further ado, let’s take a look at how to save money when buying your next car.

First, if you’re reading this I’m going to assume that you’re not extremely wealthy.  If you are go read the Wall Street Journal!  Ok, for the rest of you here’s the biggest caveat to buying a car; never buy a new car!

Did that kick you in the gut?  It should. Buying a new car is one of the biggest mistakes that people make and costs thousands of dollars more than buying a quality used car. Did you know, for example, that the minute you drive the car off the lot it depreciates by about 15%?  How about that, after 2 years, those numbers can go as high as 40%?!

The average 2 year old car, excluding strange situations, is almost as nice as a brand new car except for the smell. It rides well, handles well and most of the major parts are still in excellent shape. Plus most have warranties that extend to the new owner (if certain conditions have been met) which means that you’ll have a car that costs 30 to 40% less but looks and drives like new. That could mean a potential savings of $3 to $6000.00 depending on the make and model you choose.

If you do purchase new never buy extended warranty plans. Most new cars today come with exceptional warranties that will cover you for at least 5 years.  Purchasing extra warranties is a complete waste of money.  In fact, car dealers came up with extra warranty plans as a way to increase revenue, not to help their customers.

Cash is king when buying a new or used car.  Car loans are some of the most overpriced of any loans on the market and can cost you literally thousands of extra dollars a year. If at all possible pay in cash or pay a large down payment to keep your loan amount low.  When you can’t pay cash you need to fight like a person possessed to get your rate as low as possible.

Finally, be prepared to walk away.  This sounds silly and indeed it is silly to have to play such games but it could save you a LOT of money.  If the salesperson thinks they ‘have you’ they probably do.  Don’t let them have you by walking away if you don’t like the deal.  There are plenty of other car dealers around that will work to get your business and give you what you want.

They say a sucker is born every minute.  If you don’t want to be a sucker use the advice above when it’s time to get your next set of wheels. Good luck and safe driving.

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  1. […] from Daily Fuel Economy Tip shares How to Save on a New Car, and says, “Are you in the market for a new car? Read and learn how to save some […]

  2. […] presents How to Save on a New Car posted at Daily Fuel Economy Tip. Are you in the market for a new car? Read to learn how to save […]

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