How to Save Money When Buying a Vehicle

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Buying a car is an expensive process.

According to statistics, the average price for a new car has risen by more than $4,000 over the past decade. That means that if you want to buy a brand-new car today, it will cost you at least tens of thousands of dollars more on average. And it’s not just the initial cost of buying a vehicle either; you need to factor in ongoing costs such as maintenance and insurance.

Therefore, to get your hands on — and maintain — a good car these days, you’ll need to plan and be prepared to spend some serious cash.

But what can you do about it? How can you cut down on costs and still access all the latest features and technology available?

Well, there are plenty of ways to go about doing so. In this article, we will look at how you can save money when buying a car.

Let’s begin with choosing between buying a used or new car.

Buy a Used Car

While there are many factors involved in deciding which choice works better for you, we can say without a doubt that both options have advantages and disadvantages.

When it comes to buying a used car, you’ll be able to find deals that won’t break the bank. For example, you might be able to pick up a good deal on a model that was just released. Or perhaps you could score a bargain on a pre-owned luxury sedan.

On the flip side, buying a used car does require a bit of extra effort. It involves doing lots of research to ensure that you get good value for money. Also, you’ll likely have to spend some time looking through ads and listings online.

If you choose to buy a used car, then you’ll probably benefit from lower monthly payments. However, you’ll lose out on all sorts of extras like warranties and extended service plans.

In addition, you’ll have to worry about whether or not your chosen vehicle meets current safety standards.

As mentioned earlier, however, buying a used car isn’t necessarily bad either. There are plenty of benefits associated with this type of purchase. One of the most crucial reasons is, you’ll be saving yourself thousands of dollars over the life of the vehicle.

If you’d like to browse around for used cars, you can begin your search at used cars Waxahachie

Get a Good Deal on Finance

Another important aspect of saving money when buying a car is finding an affordable financing option. After all, without proper funding, you won’t be able to afford anything else.

Fortunately, there are several loan types available nowadays. For example, you can opt for:

A lease agreement

This kind of loan allows you to drive a particular model for a set period. What you might consider a downside here is that you must pay an initial sum upfront. However, since leasing usually comes with lower monthly payments, it makes sense financially.

An installment contract

With this type of loan, you agree to repay a fixed amount over a specified number of months. The repayment amount includes interest charges as well as other fees such as taxes and insurance premiums.

However, what sets these two kinds of loans apart is that leases typically come with higher return rates than installment contracts. That said, you need to weigh your financial situation before choosing either option carefully.

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A personal loan

Personal loans come with higher rates of interest compared to other forms of credit. In addition, these loans often carry high minimums. Nevertheless, they do give you more flexibility regarding terms and conditions.

For instance, some lenders let you take longer to repay the loan. Others offer flexible repayment schedules. And still, others allow you to borrow less than the required under standard lending guidelines.

Personal loans are ideal when buying a new car but don’t qualify for traditional bank financing.

What about paying in cash? Is it advisable?

Of course, one way to get around having to use debt is to go ahead and purchase the car outright. Paying in cash means you’ll have no outstanding debts at the end of the day. Of course, this approach has its downsides too.

First off, it requires quite a bit of planning. You’ll need to make sure that you’re ready to spend whatever funds are necessary to acquire your desired vehicle.

Secondly, you will avoid incurring additional costs by paying in total, but you’ll miss out on tax deductions. If you decide to pay in installments instead, you’ll receive a refundable tax deduction based on the total cost of each payment.

In truth, although you may not always have that option available to you, paying for a car with cash is the best option. You save lots of money that you would’ve spent on interest charges if you had used a loan.  

Buy From a Reputable Dealer

We may have hinted at this point slightly. However, another essential factor to consider before purchasing any vehicle is who you are buying it from. If you don’t know much about cars or auto dealerships, you might think that they’re one-stop shops for everything automotive-related. But unfortunately, many people end up getting ripped off because they didn’t shop around enough.

So make sure that you find out which dealership offers the best deals and services. You may even want to ask friends and family members for recommendations. They’ll likely tell you whether their experience was positive or negative.

If you decide to buy from a particular dealer, make sure that you do some research about them beforehand. This way, you won’t waste time going back and forth between different dealerships. Instead, you can compare prices and specs right away.

It would help if you took the time to read reviews left by previous customers. These reviews provide valuable insight into the quality of service offered by each dealership.

When looking through reviews, consider that most reviewers focus on customer satisfaction rather than specific issues. So while reading reviews, try to determine whether the dealership quickly and efficiently resolved the problems mentioned.

Also, remember that no two review sites are equal. For example, some sites only allow users to leave anonymous comments, whereas others require registration. Therefore, always choose websites that offer both options.

Finally, once you’ve found a reliable source, stick with them! It doesn’t matter how great the deal seems; if the seller turns out to be unreliable, you could lose hundreds of dollars.

Final Thoughts  

Buying a car doesn’t have to be expensive. With a little bit of forethought and preparation, you can easily find a great deal while enjoying all the sweet perks that come with owning a quality automobile.

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About the Author

Tobias Simmons is a personal finance blogger born in Ontario and based in Las Vegas, Nevada. He's no Doctor of Science or financial expert but is a self-taught student giving advice for the average peer.