With all my plans evaporating into thin air this year, I thought I’d give myself a special gift for Christmas. After all, it is the season of giving, and who deserves it more than me?
I’ve been saving up for a new car for some time now, but I don’t want to put it off any longer.
The reality of the situation is that maintaining 6 feet distances is quite tricky when using public transport. Even though buses have reduced capacity to 12 – 18 passengers (down from 50-100) to prevent overcrowding, I’m still concerned about the spread of the coronavirus.
According to an article in Time magazine, subway ridership was down by nearly 92% in New York at the height of the outbreak- and for a good reason.
So as long as COVID-19 is around, it seems I might as well invest in personal transportation. And the sooner, the better.
But should I invest in a new car? Or opt for a used model?
Since the beginning of the pandemic, the demand for cars is on the rise. And the price of used vehicles has increased. From June to September, the cost soared by 15%, whereas it had been consistently declining over the past few years.
So if I’m going to pay more for an older model, I might as well consider buying a new one. More importantly, I don’t want to end up dealing with someone else’s headache. There’s a great chance that the car has passed its prime, and that is why the owner is selling it now.
New vehicles have a better warranty, and once you’ve decided on a model and make, they are easier to find. Moreover, manufacturers are offering more incentives to buy new cars. You’ll find generous cashback and financing deals on a variety of automobiles. If these offers help knock off thousands of dollars from the total cost of my new car, I just may be able to snag a good deal.
Are you ready to accompany me on my car-buying journey?
For the moment, my mind is made up. I’m searching for a new car. If you’re thinking of doing the same, come along for the ride. I’ll share some secret tips to help you out.
1. Set a budget
Buying a new car is going to take a chunk out of your monthly income. Considering the shaky employment market these days, decide how much you can spare even before you begin your search. The perfect car is the one that aligns with your needs AND your budget.
To make the right calculation, consider two important factors:
- the total cost of the vehicle
- , the monthly installment
Remember that car ownership comes with added hidden costs. You will need to allocate more funds for gas, maintenance, insurance, and taxes, on top of other standard household expenses.
But your final decision should be based on the purchase price. For instance, a car dealer may make monthly payments affordable. However, if it equates to a 60-month car loan, this plan may not be so attractive at the end of the day.
2. Research the market
The internet can become your closest confidante when it comes to information. You want to purchase the best car on the market for the best price. So the first thing you need to find is the “invoice” price. This is the amount a car dealer has paid to the manufacturer for a particular vehicle. It will be handy for negotiating the price.
More importantly, as the year draws to a close, you need to be on the lookout for special discounts offered by dealerships and manufacturers. For instance, the 2020 Chevrolet Equinox, Lexus LS, Nissan Titan pickup, and Dodge Challenger offer amazing cashback deals, while the 2021 Hyundai Sonata and Jaguar F-Type sports car are offering 0% financing deals.
Another option is buying luxury vehicles with crypto. Statistics show that transactions are faster and more secure. For instance, you can buy Lamborghini Urus with Bitcoin from an auto dealership that accepts Bitcoins. This can help you avail of flat-rate pricing and avoid additional costs incurred through bank fees.
3. Consider your pre-financing options
If you’re looking for a one-stop car-buying solution, you can acquire a car dealership loan. However, you should also compare the interest rates offered by banks and credit unions.
However, when you acquire a quote from any of these institutions, get it in writing. It could come in handy when you negotiate the interest rate with the dealer.
4. Do not consider add-ons
Salespeople at the dealership are renowned for their sales tactics. Remember you’ve to stay within your budget, and even if the add-ons seem nominal, numbers can add up fairly quickly.
So no matter how attractive add-ons such as heated seats, security systems, extended warranties, tire protection plans, and GPS navigation may seem, don’t settle for something that could potentially increase monthly payments.
According to Van Alst, a lawyer working with the National Consumer Law Center says, a good strategy is to just say no, especially with a new car.
5. Never buy a car without a test drive
You have a vehicle picked out in your mind. But is it exactly as you thought it would be? The only way you whether the seats are comfortable and the drive is as smooth as the ads swore they would be is to take the automobile for a test drive.
6. Negotiate the price
When you come to the showroom prepared, whether it’s the car’s price, the down payment, or the interest rate, you have figures at your fingertips. This puts you in a stronger position for negotiations.
But the key is to start negotiating over the phone or via email. Moreover, it doesn’t hurt to be nice. You’ll be surprised how much you can acquire without being argumentative.
If, however, the dealer doesn’t budge on the price, turn the tables. Are there any free services you can receive, such as oil change, tire replacements, servicing, etc.?
7. Keep your trade-in and discounts secret
Often customers who want to buy a new car come with trade-ins. Some employees in the auto industry can avail discounts. For example, GM BuyPower credit card holders can use accumulated rewards to reduce a new automobile’s net cost.
If you want to get the best deal, do not mention a trade-in or applicable discount until you have negotiated the final price. In fact, now you can negotiate the trade-in value of your used car as well.
Final thoughts
This may be your lucky day. If you play your cards right, you just might find the ideal car. But remember, always purchase an automobile that you can afford. Yes, new ones are charismatic, but if you are spending beyond your means and dipping into your savings or emergency fund, it could spell trouble later.
Often, the best approach is to keep an open mind. You never know. A better deal could come your way while you’re searching the market.