How to Purchase a Car and Save Money – 11 Tips

There’s nothing quite like that new car smell. Unfortunately, with that new car smell comes a large car payment. So, whether you’re planning on buying a new car or a used car, you want to learn how to purchase a car and pay as little as possible.

How to Purchase a Car for Less Money

There’s no getting around the fact that buying a car is a big purchase that you will be paying for month after month for several years to come.

Even so, there are things you can do to keep the cost to purchase your new car down, so here are eleven tips on how to purchase a car.

1. Don’t assume a used car is a better buy – There’s no doubt about it. In years gone by, buying a car that was a couple of years old could save you a great deal of money. That’s because a new car drops in value the minute you drive it off the lot.

While that’s always been true and may still be true in some situations, it’s not always the case in today’s world. This is due to the fact that car manufacturers are offering a lot of really good incentives to buy new.

So, before you decide on a used car, run the numbers to make sure that a new car isn’t a better buy over the long run.

Bonus Tip: Decide on your budget before you start shopping and don’t forget to add in car insurance, upkeep, and gas costs.

2. Decide on the car you want – Be sure to decide on the make and model of the car you want before you start shopping.

That way when you go to the dealership to buy, you won’t get carried away by some beautiful but expensive car that you hadn’t intended on buying and can’t really afford.

a dog with its head out of a car window

Bonus Tip: Once you’ve narrowed your choice down to a couple of different models, be sure to check out the car’s reliability.

If one is best than the other, it might make sense, in the long run, to spend a little more.

3. Get approved for a car loan before you go to the dealership – Sure, car dealerships love to offer you financing, and there’s nothing wrong with that on the surface.

Heck, I’ve gotten a car loan at a dealership myself, but often, this isn’t the best option.

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Your bank, credit union, and online lenders tend to give better interest rates than the loans you find at the dealership. Also, if you already have your loan approved, dealerships are more willing to negotiate with you. It puts you in the driver’s seat.

That means, you’ll get a lower interest rate, which could save you thousands, and you might get a better deal on the car itself.

Bonus Tip: You can check out LendingTree. They’ve got great rates and an easy online process, so you don’t even have to leave your home to be approved.

4. Negotiate over the internet and not at the dealership – You’ll find that when you negotiate over the internet it takes some of the emotion out of buying a new car.

It also levels the playing field.

Instead of sitting in their office, they are, in a way, in yours.

Statistics show that by negotiating over the internet for your new car, you’ll save up to $2,000 on your car price.

You can even have the papers and car delivered to your home, so you won’t get stuck in the dealership’s finance office where they talk you into add-ons you don’t really need.

5. Speaking of negotiating, negotiate the price first – Too often the salesman will lead by asking you what car payment you can afford. There’s a reason they do this. If you’re focused on the payment, you’re not focused on how much you’re paying for the car.

Once you’ve come to an agreement on how much you’re going to pay for the car, then talk about your trade-in.

Think of each of the three parts of buying a car – purchase price, trade-in, and financing as three separate transactions and deal with them one at a time.

When they all get mixed in together you end up being the loser and paying more than you should have.

6. Work with several dealerships – Once you know which car you want to buy, check them out online and contact, by email, two or three dealerships to let them know what you are looking for.

Be sure to ask them what their very best price is and don’t forget to let them know that you are also speaking with other dealerships. When it comes to how to purchase a car and save money, this is one of the best tips.

Instead of you having to haggle with them over the price, they end up haggling with the other dealerships. Just make sure you are comparing apples to apples. Otherwise, there might be some surprise when you go to buy the car.

7. Shop around for the best trade-in – Just because you’re buying your car from one dealership doesn’t mean you won’t be selling your old car to a different one. Check around to see where you can get the best trade-in value for your old car.

Bonus Tip: Normally, you can get more money for your old car if you sell it yourself. Just be sure you meet any potential buyers in a very public spot during the day, and bring someone with you or tell someone where you will be.

8. Wait to buy until the right time – I know we can get in a hurry to buy a new car. When you want it, you want it, but if you can wait, you might save yourself a ton of money. The best time to buy a new car is between August and October.

That’s when this year’s models go on sale to make room for the new models hitting the showroom floor.

If you can’t wait until then, you want to at least buy at the end of the month instead of at the beginning of the month.

If a salesperson hasn’t met his or her quota, they are more willing to make a deal at the end of the month with their sales manager breathing down their neck.

9. Pick a car you can keep awhile – Sure, you want to pay as little as you can when you make your purchase, but don’t buy just on price.

You want to be able to drive this car for a while.

So, when you’re talking about how to purchase a car and save money, don’t forget about saving money down the line.

If you can drive this car two or three years after it is paid off, that’s money in your pocket every month that you can use for other expenses or save.

Step away from the mentality that you need a new car every two or three years or as soon as yours is paid off. One of the best ways to save money, in general, is to not have a car payment.

That means driving your car for longer. Your bank account will thank you for it.

10. Know what a good deal is – The minute you step on a car lot you’re at a disadvantage.

The salespeople and managers know exactly what they want from you, but do you know the same?

Yes, you want a good deal, but do you even know what a good deal looks like?

If you don’t, you’re going to end up paying more for your new car than you should. That means you should take some time before you buy a car to learn just what a good deal is.

If you can recognize one, then you will find one. This means checking out the current manufacturer’s incentive programs. Go to or for more information.

11. Understand how your choice of car will affect your car insurance rates – When it comes to car insurance, not all cars are created equally.

There are a lot of factors that go into determining how much car insurance you’ll pay each month, (check out how to save money on car insurance here) but one of the major factors is the type of car you buy.

Your car choice can add hundreds of dollars each year to your car insurance costs, so keep that in mind when you’re eyeing that little, red sports car.

When it comes to how to purchase a car and save money, the bottom line is the more you know the more money you will save.

Take control of the transaction and try your best to keep your emotions out of it. If you do, you’ll end up with a great car for a great price that you can drive for years to come.

So there you have it. 11 tips on how to purchase a car and save money.

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