The Car Buying Method That Saved Me Thousands

Buying a car is one of the most significant purchases most people will make, but it doesn’t have to come with the stress of overpaying. Many buyers unknowingly pay more than they should, whether through dealership add-ons, financing options, or even haggling the price down incorrectly. However, with the right strategy, it’s possible to save thousands of dollars while still driving off with a great car.

Here’s a breakdown of the method I used to save thousands on my car purchase.

1. Do Your Research Ahead of Time

Before you even step foot in a dealership, the most important step in saving money is researching your options. Knowing the car’s market value, along with its features, safety ratings, and reliability, will give you a better understanding of what a reasonable price looks like.

Key Steps:

• Use online resources like Kelley Blue Book (KBB), Edmunds, and TrueCar to check the market value of the car you want to buy.
• Compare prices from various dealerships in your area to see where you can get the best deal.
• Check manufacturer incentives and dealership promotions, as many car manufacturers offer cash rebates or discounts that you can apply to your purchase.

By gathering all this information, you’ll know what a fair price is and avoid being misled by over-inflated prices.

2. Shop for Financing Before Visiting the Dealership

One of the biggest money traps when buying a car is relying on dealership financing, which often comes with higher interest rates. By securing your financing beforehand, you can avoid unnecessary markups and save thousands in interest payments.

Key Steps:

• Check your credit score so you know what kind of interest rates you’re likely to get from lenders.
• Get pre-approved for a loan through your bank or credit union. This way, you’ll have a solid idea of how much you can afford and what the interest rate will be.
• Avoid dealership financing unless they offer special promotional rates that are better than what you’ve already secured. Often, dealerships will mark up financing rates, costing you more over the life of the loan.

By shopping for financing first, you’ll have a clear idea of your budget and won’t be tempted by overpriced financing deals at the dealership.

3. Negotiate the Price, Not the Monthly Payment

Many car buyers fall into the trap of negotiating based on their desired monthly payment, which can often be misleading. Dealers may lower your monthly payments by extending the length of the loan, but this ends up costing you more in the long run.

Key Steps:

• Focus on the total price of the car. Negotiate for the best price for the vehicle before discussing financing options or monthly payments.
• Ask for the “out-the-door price”, which includes all fees, taxes, and additional costs.
• Don’t accept extras like extended warranties or dealer add-ons unless they’re necessary for you.

By negotiating the total cost of the car, you’ll ensure that you’re not paying extra in hidden costs and fees.

4. Be Willing to Walk Away

Dealerships are in the business of making sales, and many times, they’ll do whatever it takes to close a deal. If you don’t feel like you’re getting the price you want, don’t be afraid to walk away.

Key Steps:

• Stay calm and confident. If the price doesn’t meet your expectations, let the dealer know that you’re willing to leave and explore other options.
• Consider timing. Car dealerships often have sales quotas to meet, and walking away might prompt them to offer you a better deal, especially if you return at the end of the month when they’re eager to meet their goals.

By showing that you’re not desperate to make a purchase, you put yourself in a stronger negotiating position, which can lead to better savings.

5. Consider Buying Used or Certified Pre-Owned (CPO)

While brand-new cars are exciting, they lose a significant amount of value the moment you drive them off the lot. If you’re looking for savings, buying used or certified pre-owned cars can save you thousands of dollars without sacrificing quality.

Key Steps:

• Look for certified pre-owned (CPO) vehicles, which have been thoroughly inspected and come with a warranty from the manufacturer. These cars are typically a better value than brand-new vehicles but still offer peace of mind.
• Inspect the car’s history with services like Carfax or AutoCheck to ensure it’s been well-maintained and doesn’t have any major accidents or issues.
• Negotiate for the best price just as you would with a new car, using the same strategies of researching the market and asking for the best out-the-door price.

By considering used or CPO options, you avoid the steep depreciation that happens with new cars and can still get a great vehicle for a fraction of the price.

6. Take Your Time

It’s easy to rush into a car purchase, especially when you’re excited about the vehicle, but taking your time can result in huge savings.

Key Steps:

• Test drive multiple cars to ensure you’re getting the best fit for your needs and budget.
• Don’t settle for the first offer. Always be prepared to shop around, especially if you’re not completely satisfied with the price or terms at a particular dealership.

The more time you invest in the process, the better the deal you’ll be able to negotiate.

Conclusion

The car buying process doesn’t have to be a stressful experience, and with the right strategies in place, you can save thousands of dollars. By doing thorough research, securing financing before visiting the dealership, negotiating based on the total price of the vehicle, and considering used or CPO cars, you’ll be well-equipped to make a smart, cost-effective decision.

The key is to stay informed, be patient, and always remember that you have the power to walk away if the deal doesn’t feel right.