Car buyers have a minefield to navigate the moment they decide they need a set of wheels. It’s tough to get a deal on a car, but with manufacturer incentives, rate reductions and dealer discounts you might have an easier time than you think. Finance expert and owner of MillionDollarJourney, FrugalTrader (that’s his internet handle as he prefers to stay anonymous), discusses five best ways for any potential car buyer to get a great deal. Here they go:
1. Figure Out Your Finances
Figuring out finances can be a challenge when buying a car, new or used. FrugalTrader says he weighs the options to “buy new and drive until it dies” or “pay half the price for a three-year old lightly used vehicle.” He also adds that they “typically pay cash for their vehicles,” which is a smart move if you’ve got the resources. By paying cash, you know you’re not spending more than you earn on a car that will depreciate.
2. Get Your Timing Right
But what about timing? There are select deals if you buy around the right time of year. Automakers offer reductions toward the end of the year and FrugalTrader expands from his experience: “fall seems to be the time when car dealerships offer deals on current models because next year’s models are coming into the lot.”
3. Don’t Sacrifice Reliability for a Good Deal
Brands with better reputation cost more, and this is true for everything. While you’re paying for the name most of the time, you’re also paying for the product’s integrity and assurance that it’s well-made. But in effort to save money, would it be recommended to get a deal on a poor-selling car just because it costs less? FrugalTrader thinks not, especially where safety is concerned. He “tend[s] to stick with brands that have a track record of reliability.” Once that box is ticked, along with other necessary features, he searches for the best deals available.
4. Be Mindful of Dealer Margins
Negotiating has usually been the go-to strategy for car buyers to get a deal over the sticker price. But FrugalTrader says that the goal of car dealerships is “to move a high volume of cars so that you’ll come back and service it at their shop during the warranty period, and beyond.” He adds that “a $30k vehicle may have a $2k margin,” and his choice for the best deal is getting a smaller discount of $700, but having other accessories like snow tires added on.
5. Be Armed with Knowledge
FrugalTrader says that “the best bet is to go in with knowledge.” As with anything in life, you have a better idea of what you are up against when you have the facts. This includes important information like invoice pricing on vehicles and factory incentives. FrugalTrader says that knowing these will give you an idea of “the wiggle room that a dealership may have.”
FrugalTrader suggests researching online to find the best discounts. Using websites like Unhaggle to get access to invoice pricing and other important facts will help you hustle a smart deal.