The least expensive way to buy a new car is — very carefully.
Seriously, it takes time, study and deliberate negotiation to get the best possible price on a new car. Even then you have to be careful to ensure the one you’re buying is exactly what you need. After all, a deal is only a deal if it’s on something from which you’ll benefit.
With all of that said, the absolute cheapest way to buy a new car is with cash. You drive the total amount you’ll pay up when you borrow money to finance the purchase of a new automobile.
How much more you’ll pay depends upon a number of factors. These include your credit score, the amount of your down payment, the length of the loan term you choose and the agreed upon purchase price.
None of these factors come into play when you pay cash. Of course, given the average new car transaction price is right around $38,000 these days, that’s going to be a pretty tall order for most people.
Get Pre-Approved for a Loan
Yes, dealership financing is convenient. However, like in most other instances, you’ll pay more for that convenience. There will be profit for the dealer baked into whatever interest rate you’re quoted because they retail loans too.
Thus, you’ll have a powerful bargaining chip when you show up at a dealership with a pre-approved loan in hand. This is because you’ll have a counteroffer to present when the salesperson quotes their interest rate.
You’ll pay even less for the car if they beat the offer you already have. And, you’ll still pay less than you would have with no alternative source of financing if they can’t.
Stalk the Dealer’s Inventory
Start shopping for your new car several months before you actually buy a car. This will give you time to find one that will best serve your needs within your price range. It also gives you an opportunity to monitor the inventory at a few different dealers to see what’s been sitting around for a while.
The longer a car stays at a dealership, the more money it costs the dealer to sell it. This is because they borrowed money to buy that car and will pay it off when it sells. The longer it stays on the lot, the more interest that car’s loan accrues.
Eventually, the vehicle becomes an albatross around the dealership’s neck and the general manager pressures the sales manager to rid the store of it. This puts you in a position to get a really good price on that car.
Sell Your Current Car Privately
Rather than trading in your car, sell it yourself. Yes, it’s more convenient to do a trade-in, but we’ve already discussed the downside of convenience — right? You’ll get more money for your car if you handle the transaction on your own and sell to another private party. This money can then be used to offset the price you’ll pay for the new car.
Look for Rebates and Incentives
Generally speaking, the best time of all to buy a new car is when a newer model has already replaced it. There is a period of time when dealers will have “leftover” models they need to sell off. Manufacturers often provide bonus cash to help dealers move these. You can tap into that to your advantage.
Similarly, special offers aFnd incentives are offered all year around for various reasons to help dealers move metal. Taking some time to look for available offers on a model of your interest will net you some savings.
These tips will take you a long way toward getting the best possible price when it comes to the least expensive way to buy a new car. Again though, you have to be willing to put in the time and legwork to stich these strategies together to your best advantage.