Buying a car is a big decision. The average cost of a new car reached a whopping $31,252 last year. Most people buy a car on credit terms and these agreements are sometimes complex and confusing. Before agreeing to terms, read the fine print because…the devil’s in the details.
Timing
Dealers tend to shift last year’s stock during February and August in order to showcase newer models in March and September. So the old adage of waiting as long as possible isn’t necessarily the best time to wheel and deal in the new car showroom.
However, some local market dealers tend to offer “new” cars from two model years ago in late summer when sales are slow. Check out dealers with access to “old” new stock to save big.
Comparison
The Internet helps new car buyers to easily compare car prices. Online dealers may offer great deals—up to £2000 and £5000 on some models–because they’re volume buyers. Some don’t offer a test drive, so it’s crucial to do some research before purchase.
Depreciation
Some of the best things in life depreciate quickly. It’s often said that a car starts to depreciate when it’s driven from the lot…but it’s important to recognize that some cars depreciate much faster than others. Elite sports cars or large sedans may be lots cheaper in the secondary market. Check out makes and models online to get a feel for the cheapest: a desirable model in a funky colour or overproduced models of a popular manufacturer are great ways to save.
Don’t forget to look for special situations buys in your area. We’re familiar with a couple who purchased a near-new SUV from someone in need of quick cash for just $700! (Make sure to get the legal title for the vehicle properly assigned and ask the buyer for a bill of sale. The people in this example had a legal form in hand, just in case.)
Fuel Economy
No one knows how high fuel prices will climb. Some larger used vehicles may cost less because it costs more to fuel them. Fuel efficiency ratings are useful information and, when negotiating, use this info to reduce the price of a potential gas-guzzler.
Keep in mind that even small fuel efficiency differences can make the car less expensive to own, operate, and insure.
Haggling
Many dealers advertise that there’s no need to haggle, but please. Dealers know that some prospective buyers may not like to haggle… perhaps because it’s stressful. After researching and comparing costs, start the bid by offering the seller five to ten percent less than the asking price. The seller may not like haggling, but the buyer saves some money!
Insurance
Every driver must have car insurance. It’s an essential financial planning tool. Some unfortunate persons drive a car without insurance— about five hundred each day get their cars taken off the road because of an oversight or cheque in the mail scenario. Here are some ways to save:
- Research makes and models beloved by the insurance industry, then buy one. These cars cost less to repair, and tend to have fewer repairs.
- A new or late model car in general costs more to insure. And some sports cars are really expensive to insure!
- Drivers should check their credit before applying or changing insurance carriers. The insurer also assesses the driver for other risk factors, including accidents, moving violations, thefts, or other claim-causing incidents over the past three to five years. Any of these items will require higher insurance premiums.
- Shop around, as there are plenty of car insurance offers from competing companies. A Little research goes a long, long way.
Conclusion
The purchase of a new car is an exciting experience. Remember that knowledge really is power when dealing with car dealers, sellers, insurance companies, and car loan providers.
