So that old car is starting to show some age, Its back in the repair shop. Some lights are showing up on the dash and you find yourself searching online for the best reviewed SUV on the market. Well, maybe its time to let go of that old beater and said “get a fresh new shiny vehicle with all the latest gadgets.
The day and age has changed so dramatically the past decade or two and so has the car buying experience, most of my customers literally have no idea what is the latest website, app, buying process let alone where to get the best deal. The days or newspaper Ads for that special holiday deal at your local new car dealer are over and so is the local print classified AD. Now we have Apps that deliver the car right to your door and even a car vending machine, yes I said “car vending machine.”
Well, the best and safest methods might be a topic for another article but i’m going to be sharing how to save some money and a major headache no matter what method you choose.
Here is my top 5 tips to save money when shopping for a new car.
Decide Used Or New.
Your first choice is going to be wether you are choosing a used or new car.
Obviously there is no way that I can sway you in either direction because this choice is solely dependent upon the individual. If you are the type of driver that travels 70 miles everyday to and from work then maybe a new car that would be less likely to develop mechanical issues early on and comes with free maintenance might be a better choice.
If you have some credit issues and going to be paying a high APR percentage and mainly rely on public transportation then a used cheaper vehicle might be better.
So my first tip would be to decide what is really necessary for your lifestyle and not so much what you think would be cool and fun. Remember the thrill of a new car only lasts a couple months and whatever you decided to purchase with emotions will be yours for a long time. Try and take an impulse buy or emotion out of your decision making. A lemon car (vehicle with many lingering issues), a vehicle with a high monthly payment or inconvenient vehicle that does not match your daily life can and most certainly will be a headache and will for sure have you regretting your decision.
Other things to keep in mind when deciding used or new.
The Long Term Commitment When Receiving A Loan.
When Leasing typically 36-39 months
Financing Typically 5-6 Years.
Add all those payments up and it may be a big eye opener for you especially when just considering the finance charges alone. Point is it’s a big commitment that is most likely not going to be undone easily.
Only you sign that paperwork you are in it for the long haul.
Used Car Warranties. If you are buying a used car from a private seller I am 99% sure that in most cases there will be no warranty unless the manufacturers warranty is still valid and transferrable.
So what you may save on overall price of the vehicle you may end up spending in repair bills.
I always like to call ahead to my insurance company when I’m thinking about purchasing a car to find out how much is the insurance going to be.
You never truly know how much will it cost to insure that new or used car and there is much that goes in to them deciding how much they will charge you. I would call ahead just to be certain before making your final decision.
Lease Or Finance.
If you decided to buy a new vehicle you will have three options.
- To Finance the vehicle (receive a loan and pay payments every month until the vehicle is paid off.
- Lease vehicle (Basically pay payments on the vehicle for a time period of usually 36-39 months and then just return it when the lease period has been reached)
- Pay off vehicle completely with no loan.
Unless you have some big bucks laying around most folks will choose option 1 or 2.
This again is really a preference and honestly to my knowledge there is no big saving factor here.
You might think “If I finance at least I’m coming away with a title and the car is mine and if I lease I walk away with nothing.” That is true but in my business we look at car values and we are constantly evaluating how much is this vehicle worth on the market and sometimes we come across how much the vehicle was when it was brand new. Truth is when you buy a brand new vehicle you’re going to lose your ass off. There is no two ways about it. Unless you’re buying a rare exotic car that will be a modern classic you’re going to lose no matter what. The saying holds true “When buying a new car you lose $10,000 the minute you drive off the lot.”
Now I’m not saying don’t finance all I’m saying is you’re going to lose money that’s just how the game goes, however if you’re buying a vehicle such as a;
Are just a few examples of vehicles that hold their value well and will be easier to resell and will minimize the loss once you are ready to move on to another car.
I personally lease most of my cars because I like the idea of a full bumper to bumper warranty, no finance charges and when I am done I just hand them the keys and say goodbye.
Some people may not like this but I always found it to be true that the money you lose on financing a car you lose on leasing just with less headaches.
The negatives of leasing.
Must be careful of how many miles you return the vehicle with. You are specified an amount of miles per year and anything over that will be charged when you return your lease.
Again, you walk away with nothing for your all your payments paid.
They add damages and wear and tear charges at the end of the lease.
3. One Trick That Can Save You $10,000 or more.
This trick will save you thousands when Dealing with new and used car sales people.
Although this will typically work better for new car salesman I have done this with used car dealerships also.
So if you have decided to go to a dealership I will let you in on a cool secret that I was taught and have been doing for years.
Just walk out without buying anything. Yes, just leave without purchasing a car. Go through the process of looking at the colors, playing with the gadgets, test drive, fill out the credit application and when they tell you your payment, just say “that’s a lot more then I was expecting, I can’t afford that,” and leave. I wouldn’t storm out angry or anything I would just try and shave off a few bucks but even if they do shave a bit still walk out and don’t call back. As long as they have your cell number I guarantee you they will be giving you call soon to make the deal happen.
You must be realistic also they’re not gonna cut your payment in half but they will take you down to the lowest they can.
And why is this?
Sales people are not paid a salary most of the time, neither is the finance manager, the floor manager or anyone else working to make the sale. They get paid per deal on commission (at most dealerships) Those are the people that can change a few things around and with the click of a mouse change your payment.
This trick has always worked for me as long as you do not get emotional and feel like you have to walk out now with the car (which they will always tell you, you have to walk out now with the car or someone else will buy it)
It’s always worth a shot at worst case scenario nobody calls you back to come in, they are at their lowest price and you walk away with your car at the their lowest cost a few days later.
Protecting yourself from online scams
I have an entire article written regarding online classified car sales that I receive great feedback from all the time I definitely recommend going there now and reading up on how to protect yourself just click here.
Stay Away From Problematic Cars.
People often ask me or my team “what type of vehicle do you recommend me purchasing?” After they sell us their older car. I will usually give them the advice on two things they should keep in mind;
And repair costs/headaches.
Obviously they’re other factors involved such as Gas Mileage, safety features, Size of the vehicle being accommodating for the size of your family and for parking and storage, insurance costs, is your vehicle is used for work purposes then you may consider a cargo van, pick up truck etc but for the average driver I would consider these two to be very important factors.
Resell value is not being cheap or worrisome it’s being smart and you must be smart when making an investment, and that’s what buying a car is right, an investment of sorts?. Eventually that car is going to need to be sold (later rather then sooner I hope) and trust me you’re gonna lose some money unless you are a car buying wizard, so minimizing that loss is going to be important to you at that time. I have listed my personal favorite vehicles for holding value. You can just scroll up to the second tip and you will see the list.
Cars that have very good resell value is usually because they are good quality made vehicles with low maintenance costs, minimal problems and cheap repairs, which bring me to the next point which is cars that should be avoided.
This is a touchy subject they’re are dozens of car companies thousands of makes and everyone drives something different, I get it, different strokes for different folks. Some people like smart cars some like hummers there is no way in one written article I can tell someone to avoid this one car without making a fool of myself BUT…
Again for the typical average car buyer asking my opinion I would recommend staying away from European made cars.
The resell value on these more often then not tumble dramatically, repair costs are insane, they are so packed with tiny gadgets and technology that something eventually has to go wrong and not to mention the sticker prices!
If you can afford a new one with a warranty by all means go for it but if you’re not that into being the center of attention and getting all the oohs and ahhh’s then I would recommend sticking with Japanese or American.
If you are buying used I would strongly urge you to reconsider to something else a little more reliable, from my experience European made cars that get up there in mileage tend to break down more often and repair costs will have your head spinning.
Ill let you in a little known secret. This big dealerships make their money at the service and maintenance department. As you may or may not know I own and run Jersey Cash 4 Cars a company which purchases used cars and we have bought so many cars in the service department of car dealerships because people cannot afford the costs. That may not be surprising but what is surprising is that these dealerships know me, know my company and do not like me. Why? Because I expose what they do. They charge people thousands of dollars more then it should be. You can take your car to a mom and pop repair shop and get the same work done at half the cost but big time dealerships need to pay all the employees and the expenses so they charge people through the nose and most of the time the customers dish it out. Now this goes for all dealerships not just European cars but American, Japanese or any other type but European car buyers are typically the ones with more bank and are much more willing to hand over the AMEX and not ask questions so maybe that’s why European cars break down more then Japanese or American?
Not trying to create a conspiracy here but in my opinion that it is.
Well, I hope you enjoyed the article, I hope we offered a little bit more clarity to your decision making process and like I said earlier, this is honestly the advice I give my customers who ask my professional opinion.
If you have a used vehicle that you are interested in selling please feel free to reach out to us. We would love to buy your car.
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