Although we may not want to admit it, 2018 is almost out the door – already in August now (the dog days of summer!), stores are putting their peppermint coffees and Christmas decorations on the shelves. Although you may not be ready for that yet, it’s almost time to start prepping for 2019 – which means thinking about what new car you’ll be driving in the new year. Soon dealers will be clearing their lots to make room for the new models, meaning it’s the perfect time to get you a great deal on a new ride.
To help you out, here are X tips for your next new car shopping trip – use them, and you’ll find yourself enjoying a much smoother buying experience!
Shop Around for the Best Interest Rates
If you’ve already been looking for a new car, you’ve probably noticed a ghastly trend: the rising of interest rates. What this means for you is that, yes, you’ll have to look harder for 0% financing offers, but don’t worry – just because it’s harder does not mean it’s impossible. Certain dealers are offering 0% interest on cars like the Cadillac CTS, Ford Escape, or 2018 Subaru Outback.
Even if you can’t find 0% interest, there are still super low interest deals available, like the 0.9% deals some are offering on the 2019 Infiniti QX50 or the 2018 Buick Enclave.
Patiently Sniff Out Cash Back Deals
Yes, these deals may be as hard to find as the 0% financing options, but they’re around here somewhere. General Motors (GM), for example, is giving buyers a 14% discount on their 2018 GMC Sierra Denali and their 2018 Chevrolet Silverado. Fourteen percent might not sound like a lot, but for a vehicle costing $50,000, that’s a savings of $7,000!
These deals will vary based on where you live. If you’re in the right area, you could get $4,000 – or more – cash back on a 2018 Hyundai Santa Fe or a 2019 Jeep Cherokee. Or, if you’re a Volvo fan, you could get as much as $6,750 cash back on their 2018 V90.
Work With Your Bank for the Best Deals
If you can afford financing through a dealership, do it – but keep the interest rate as low as possible. If you’re a bit more strapped on cash, or just super frugal, go through your local bank or credit union. You can find much better rates through your bank because of the “relationship discounts” dealers don’t offer or even care about.
Big Picture: Decide Based on Purchase Price
When you’re buying a new car, especially if you’re strapped on cash, it’s very tempting to select a car based on the monthly payment – especially if it’s a make and model you love, the total price is a bit higher than you’d like to pay, but they’re offering monthly payments at a rate you’re practically drooling at.
However, think about it: you’ll be paying interest on these monthly payments, so in the long run you’ll be paying a lot more than the total purchase price, especially if you’re making just the minimum payment, and double-especially if you have a high interest rate.
And a final tip: always, before agreeing to anything or signing your name anywhere, ensure you know the absolute, complete, full price of the car – that’s including any extra, hidden costs such as hidden taxes, car preparation and delivery fees, or dealership costs that dealers will not tell you about unless you ask directly. Once you have this full cost, negotiate based on that full price. Trust me, you’ll have a much easier time financially if you follow this advice.
Play It Cool: Do Not Mention Your Trade-In Upfront
Treat buying a new car like a card game: play all cards close to you until it’s the moment to reveal them. Reveal you have a trade-in too early, and the dealer could easily use that information against you, giving you an unfair deal in the process.
Let’s give you an example: You want a car being offered at $22,000. The dealer’s rock-bottom price is $18,000, but he’s not going to tell you this up front – it’s his job to make as much money as possible, after all! If your trade-in is worth $3,000, the dealer might offer to let you buy the new car for $20,000, subtracting the cost of your trade-in, meaning you pay $17,000 for the new car.
If, however, you hadn’t told the dealer about your trade-in up front, and had instead managed to negotiate down to $18,000 for the new car, then with the trade-in you’d be paying only $15,000 for the car. By holding your tongue until the end of the process you could have saved yourself $3,000!
In sum: if you have a trade-in treat this as a two-part process. First, get the best deal you can on the new car, and then negotiate the trade-in.
A Final Tip: Forget the Add-ons
Like was mentioned, the main goal of dealers is to make as much money as they can. They’ll try to sell you on all the available add-ons, but remember: if you’re financing the car, the cost for accessories will go through the rough. Keep the add-ons to a minimum, and your wallet will help you. Yes, you really can live without the seat warmers, and a portable GPS (or your phone) is much cheaper than anything add-on system.