How to Save Money Buying A Car-6 Best Tips

Buying a car can be a very significant expense and you should use money saving tips. Cars can be important resources for us that do many positive things for our lives. But they can also be a huge expense, especially when buying a new car.

Here of six of the best tips including:

Pay In Cash and Don’t Take Out A Car Loan

Get the Best Loan as Possible

Buy Used Over New

Do Tons of Research

Trade-In Your Car for Some Credit

Consult Knowledgeable Resources

Using these tips will greatly reduce how much you could be paying for your car. Through this post I will show you helpful and valuable tips for how to save money buying a car.

Pay In Cash and Don’t Take Out A Car Loan

Paying in cash can help you not take out a loan and not have to pay interest. The interest from a car loan can turn into thousands of dollars and can add much more money to the car buying expense.

Saving up more money or buying a less expensive car so that you can pay for the car outright can save you lots of money down the road.

Say you want to save up money for a car that you want to buy but you need $2,000 more dollars. From here you can figure how many months from now you would like to have this money saved up.

$2,000 = Money Needed for Car

$2,000/12 = $167 Per Month

If you want to have saved up this amount in 1 year, then you could calculate that you will need save $167 per month to reach your goal. Coming up with the cash to pay for your car upfront is going to be key for preventing more cost to come into this car buying expense.

Get the Best Loan as Possible

If you must take out a loan, then getting the best loan as possible is key. Focusing on finding the one that will give you the least amount of interest to pay is very important.

You can quickly determine what kind of car loan you might qualify for by visiting this website. This website will allow you to enter you zip code, Credit Score, Loan Type and Amount for the loan.

Understanding the APR, Annual Percentage Rate, for your loan will be key. A big factor that will determine your car loan APR is your credit score and whether it is excellent or bad could mean thousands of dollars difference.

Familiarizing yourself with the credit score numbers can be useful.

Credit Score Numbers:

720 or Greater = Excellent

660-719 = Good

620-659 = Fair

620 or Lower = Poor

Taking the time to review your credit score could be important for saving money. One compromise for buying a new car is to wait an extra 6 months to build up your credit score some and save up more money.

If you did this and saved up an extra $1,000 and raised your credit score from 715 to 720, then you could find yourself asking for a much smaller car loan. The good news is that even a poor credit score you can still probably qualify for a loan.

But the real bad news is that it will cost you much more because your APR will be much higher. Check your current score and be prepared by researching ahead of time what you are likely to get on your car loan.

If you are interested in learning how to build up your credit score, read How to Build a Good Credit Score – 8 Tips. This post will give you helpful tips for building up your credit score and important factors for what determines your score.

Black Used Car
Buy Used Over New

Buy Used Over New

Buying a used car over a new one is going to be much cheaper. Go for a slightly used car because this car will likely have some mileage on it but still have the majority of its parts still working great.

I like the idea of buying a car that has a medium amount of miles on it, somewhere in the 30,000-70,000 miles. This amount of miles really means that most of these cars will not be as expensive. But they also still have a lot of life remaining in the car and can be useful for years.

Cars generally depreciation a ton after they are bought brand new and lose a lot of value with the first couple years or first 30,000 miles that are put onto it. Many of these cars in this medium amount of miles could have a wide range of wear and tear on them due to different driving styles between each person.

I try to drive my car carefully because I know that it is very important to my life and it is very expensive to fix. Taking time to research these used cars and determine how they have been driven could be key to getting a good deal on a car.

Do Tons of Research

Spending a lot of time researching for your car purchase can be a big saver of money in the short term and long term. Finding the right car for you and then tracking down the best price for that car can take some time.

Do some Google research about the prices, followed by consulting friends and family who have been in your situation before and visiting car dealership websites to get more accurate prices. Whether you are buying a new car or used car this is an important decision that should not be rushed.

Once you become familiar with what car you really need, then do as much research into that car and it’s details. I spent months reading as much as I could on Consumer Reports and tons of Google researching. I was trying to get as informed as possible so I would choose the best car for me.

After almost 4 years of owning my current car, I can safely say that the time I spent preparing for this purchase was time very well spent. Going into dealerships and test-driving the car you are interested in can be huge for getting a feel for how the car drives.

Trade-In Your Car for Some Credit

Trading in your current car can give you some credit that can be used for your next purchase. It is important to note that you probably will not get a huge amount of money for your trade-in. But it still could help with your next car purchase at the same dealership or another one.

Try to get estimates from multiple dealerships to get a better idea of what you will get for your trade-in. Asking extra questions in this situation is important to know whether you’re going to get a good deal or if it is too good to be true.

If you are trading in your car but hoping to use this trade at a later time, then you will likely be given a check for the value of your car. This check can obviously be used to help pay for your next purchase at that dealership or at another one.

It is important to note that it could be more lucrative for you to sell your current car to a private buyer. This is because car dealerships are going to be buying your car so that they can resell for a profit.

 

They are only going to be able to pay you a certain amount. It is likely that you would be able to received more money if you sell it to a private buyer.

Take some time to think about whether how you want to sell your current car. Determine whether you want to sell your current car for some money at a more guaranteed price or try your hand at selling to other sources.

If you are willing to advertise your vehicle in the right spots and your car is in relatively good shape, then it could be worth more money to sell it to someone else.

Consult Knowledgeable Resources

Consulting knowledgeable resources that specialize in providing helpful and valuable information for buying a car could be huge. Using certain resources can give you key tips to prepare you for the actual buying the car in person process and other important details.

ConsumerReports

I like to use Consumer Reports because they have long been considered a reputable source for car expenses. I used it a ton to be as informed as possible for my last car purchase. Consumer Reports is a nonprofit organization that provides honest information for consumers so that they can be prepared for their big purchases.

Consumer Reports can partly be viewed for free but if you do want to get all the best information sign up as a member. It will be $10 per month for digital access or you could pay $59 per year, which comes out to just under $5 per month.

It is hard to argue with those prices and they really do want to get the information out there for consumers.

Kelley Blue Book

Another knowledgeable resource is the Kelly Blue Book website and can provide valuable information about trading in used cars. They have specific sections dedicated to providing helpful information about what you can realistically get for your car if you trade it in.

Consulting this resource could help you track down the information you need to know the value of your current car. This website is dedicated to helping you research and find the car that you want.

Be Prepared and Research

Be as prepared as possible is key for buying a new vehicle, whether it is a brand new car or a used car. This is likely to be a resource that you use a lot and for years so it is extra important to be prepared for this purchase.

A car purchase is one of the most expensive purchases people make but many are not as prepared as they could be. Hopefully now that you have read this post you are more prepared than others to make this purchase.

I hope that you liked this post and found valuable information for how to save money buying a car.

If you have any questions, please leave them below and I will answer them to the best of my ability.

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