Whether you’re thinking about buying new or used, a car is one of the biggest purchases you’ll ever make. If the mere thought of visiting a car dealership fills you with anxiety and makes you instinctively clutch your wallet, read the tips below before you purchase your next vehicle.

Separate your needs from your wants to avoid paying for extras that you can’t afford.

1.  Do Your Homework

Before you even step foot in a car dealership, take the time to research the vehicles that interest you. Visit sites like Consumer Reports or Kelley Blue Book to compare prices, read reviews, and find the best value for your money. Look for video reviews on YouTube (by dealerships or consumers) that evaluate vehicle features and show test drives. You may discover a model that you didn’t know about or find that a used car is the best fit for you.

 2.  Check with Your Insurance Company

When calculating the cost of owning a car, include the insurance policy you need to buy in order to protect you and your vehicle. No matter who your provider is, your insurance premium will change depending on the type of vehicle that you buy. Once you’ve narrowed down your choices, call your insurance company and get auto insurance quotes for each model that you’re considering.

3.  Research the Dealerships

Do background checks on the dealerships in your area in order to find out more information about who you’re buying from. Look at Better Business Bureau ratings and online customer reviews to get a feel for the quality of service and other car buyers’ experiences. Also look at which dealerships are offering special deals, sales packages, or great financing opportunities.

4.  Buy at the End of the Month

After you’ve researched, looked at multiple dealerships, and taken test drives, wait until the end of the month to buy. Car salesmen and women work on commission and often get bonuses for the amount of vehicles they sell in a month. So, they may be more willing to agree to your terms if you come in during the last days of the sale cycle. This is especially true in December and January, when dealerships generally sell the least amount of vehicles.

5. Pay Cash 

A vehicle’s value depreciates as soon as it’s driven off the lot, so why pay more in added monthly interest for a loan? If you can afford it, paying cash up front saves you money over time, and gives you more power to negotiate at the dealership. Dealers are more likely to work harder to get you in the car that you want if they know that you are ready to pay in full.

6.  Shop Around for Financing

If you don’t have enough cash to pay for your entire car purchase, save up for a substantial down payment (ideally 20% or more), and choose your financer carefully. Car dealerships make money through their financing department, so their deals are usually not the lowest. Get your credit score, and check with your bank and your local credit unions to see who offers the plan that fits your needs.

7.  Avoid Extended Warranties 

When a salesperson offers you an extended warranty, he is typically asking you to purchase a service contract through his dealership–not a contract with the car manufacturer. This is yet another way that dealerships make money, especially since car owners rarely take advantage of this service. If you are buying a used car or know you will own the car for a long period of time, take time to understand the car’s original factory warranty. Then look at extended warranties offered by independent companies and compare them to the one offered by the dealership.

The more prepared you are before you walk into the dealership, the more confident you’ll be when it comes to buying the car of your dreams (and getting it for the price you want). Give yourself some time to close the deal, and be willing to walk away from the table if the salesperson is pressuring you into paying a price that makes you uncomfortable.

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Photo Credit (top picture): Local Manhattan Beach

written by:  Stephanie Marbukh

Stephanie Marbukh is a freelance blogger who writes about a variety of topics including money-saving tips and home maintenance.

While the prospect of buying a new car can certainly be exciting, trying to negotiate the best price can also be daunting. Using a few smart tips and techniques can help you to negotiate the best price on your next new car.

The most important step you can take to help you obtain the lowest price on the purchase of a new vehicle is to do your homework first. Research is absolutely essential to getting the best price on a new car. Taking the time to do research ahead of time will allow you to make price comparisons and also to locate dealerships offering incentives such as rebates and dealer cash.

When reviewing prices, it is imperative to make sure you know the difference between the sticker price and market value. The sticker price refers to the amount that the dealership would ideally like to obtain for the vehicle. Keep in mind that this is not necessarily the amount they must obtain or that you should pay for that vehicle. The sticker price is really just the beginning point for negotiating the final sales price. Market value refers to the average price that other consumers have paid for that same model in your local area. You should always remember that market value can depend on factors such as the geographic region in addition to the color of the vehicle and options.

When it comes to obtaining the best price on your new vehicle, you also need to be certain you take full advantage of rebates and incentives. Almost all car manufacturers offer some type of rebate or incentive as a method of attracting buyers. Before you actually purchase a vehicle, make sure you have researched all available discounts. It should be remembered; however, that some incentives such as zero percent interest and no money down are often only available to consumers with excellent credit.

Confidence is also important when negotiating prices on new vehicles. Now is not the time to shy away from stating what you need. Consumers who are fairly aggressive often tend to get the best prices. When it comes to negotiating remember that dealers do not make the majority of their money on the sales of new cars. There is only a small profit margin on new car sales. Most profits for dealerships stem from parts and service. Their goal is to sell you a new vehicle in the hopes that you will be a return customer paying for parts and service. Therefore, you should never shy away from asking for a lower price, even if it is below the invoice price.

At the same time, you need to make sure that you remain flexible regarding certain specifics such as additional options and the color of the vehicle. You will often be able to get a much better deal if you remain flexible.

You also need to take care to fully review all paperwork related to your vehicle purchase. Even if you have already agreed to a good price with the salesperson, be sure to get that deal in writing and carefully scrutinize it before signing.

Finally, if you find that you are having difficulty in securing the price you need on a new car; do not be hesitant about walking away. You may very well be able to negotiate the price you need on a new vehicle at a different dealership.

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written by:
Nicole Rodgers

Nicole Rodgers has been blogging for three years; she encourages everyone to get free auto insurance quotes online to find the best coverage after you buy a new car. Pick one that is both suitable for you driving style and your budget. She also wants everyone to score high on the DMV written test so that you can get your driver’s license quickly.

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Image courtesy of: Andy Newson / FreeDigitalPhotos.net