Are you in the market for a car? Few purchases are as expensive (or have as many choices for makes, models, and features) as cars. The expensive price, combined with the multitude of options, can making shopping for cars difficult. Here are five tips to help save as much money as you can while shopping for a car!
1. Determine What’s Important
Our first tip is to figure out what car features are important to you. Cars with built-in safety features, such as an anti-theft system, can often get you discounts on your insurance policy. Also consider how many seats and how much storage space you need. Perhaps you’re interested in getting an electric or hybrid car. Make a list with features that are critical to have and ones that you’d like to have (but are optional). Also keep in mind what your budget is – newer models are typically much more expensive than used cars. Narrowing down cars that fit your list and your budget can help keep you from spending extra on unnecessary features!
2. Start Saving
If you can buy a car using cash instead of a loan, you’ll save on interest expenses and loan fees! Even if you don’t have enough to cover the cost of the full car, saving up for a down payment can help you get a lower interest rate and pay less over all. The second tip for buying a new car is to plan your budget and start saving. You can keep your funds in a high-yield savings account, where you’ll be able to access them whenever you need to. Or, if you give yourself a timeline for purchasing a car (such as in one year), you can put funds into a Certificate of Deposit. CDs, as they’re also called, often have a higher APY and earn more interest than savings accounts! Either way, putting your cash into these accounts can help you save up for a new car (plus earn a little bit of interest on the way).
3. Check Your Credit Score
If you’re going to get a loan to help pay for your car, you need to check your credit score. Having a good credit score can actually help to lower your interest rate, thus saving you more money over the life of your loan! There are services that can help check your score, monitor your score for changes, and suggest ways to improve your credit rating. Working to improve your credit score in the months before getting a loan for a car will definitely make getting a loan easier!
4. Get a Loan
Sometimes paying cash for a car isn’t an option, and other times, even if you can pay with cash, it’s still a good idea to get a loan (especially if interest rates are low, you don’t want to tie your cash up in a car, or if you need to establish credit and start building a credit score). Most car dealers will offer auto loans to help pay for a car, but those aren’t the only option. You can also consider a personal loan! Personal loans can be used for cars in addition to other expenses. To determine which loan option is right for you, compare multiple lenders and loan offers!
5. Save on Auto Insurance
When you buy a car, you’re required by law to purchase auto insurance for it. However, just because auto insurance is a necessary expense doesn’t mean it has to be expensive! You can compare different insurance companies to find the plan that works best for you. Sometimes it makes the most sense to have a lower deductible and higher premiums, while other times you can save many by having low premiums and a high deductible. No matter what your situation is, comparing multiple insurance companies can help you find insurance for a low cost!
Whether you want a flashy convertible or a sensible SUV, buying any type of new car can be exciting! Use the above tips to make the most of your auto purchase journey.