Drive Home a Deal: 12 Car Savings Tips (Free Full Guide)

Save $1000s on your next new car! Congratulations on starting your journey to a new vehicle. To help you navigate the process, we have compiled our top 12 insider tips.

1. Check Your Credit

Before you step onto the car lot, pull your credit report. Your credit score directly impacts the loan interest percent the dealership will offer you. Know where your credit stands in advance to ensure you get the best rate possible. Free tools like CreditKarma will help you check, track, and understand your credit score. They perform a “soft” inquiry on your credit reports, so this will not be reflected on your reports as a credit pull or cause your score to go down in any way.

2. Save Time, Research Online

Before you go car shopping, compare prices online. Websites like Edmunds and TrueCar let you read car reviews, view cars for sale and their prices, calculate loan payments, and analyze the dealer’s price.

3. Consider Non-Local Dealers

Check your local dealers, but also check dealers a little farther away if you’re willing to drive there to buy. Dealerships price their vehicles differently depending upon their location. Remember you can have the vehicle serviced anywhere, so it might be worth a drive to save on the price.

4. Negotiate, Even Buy, Online

It’s easier than ever to buy a car online. Virtually all reputable dealerships list current inventory on their websites and third-party sites, and they welcome Internet sales. The process has three significant benefits:

1. You avoid in-person negotiations and maybe even a misstep that results in your paying more than you should.
2. You could end up with a much better final price due to the fundamentally different incentives inherent in the online car-buying process. A showroom salesperson is trying to negotiate the highest price possible since their commissions are based on a percentage of the sale price. On the other hand, an Internet sales manager typically makes a fixed salary and gets paid a bonus based on volume.
3. Purchasing a car online is more convenient than visiting multiple dealerships.

5. Time it Right

Shop at the end of the month. Dealers are racing to meet manufacturers’ sales targets, motivating them to aggressively close deals. Go the last two days of the month. Even better, shop at the end of the quarter. Many dealerships have quotas to meet at the end of March, June, September, and December. Best of all, shop at the end of the year. Closer to the end of the car-buying year, older models will need to sell to make room for the new year’s models that are coming in. For most manufacturers, this is the fall. Also in December, dealers are eager to make annual sales goals, making end-of-year a good time to buy.

6. Go Later in the Day

Don’t arrive to the dealership a few minutes before closing, but if you begin shopping a few hours before closing, the salesperson might be more motivated to close the deal to go home and relax!

7. Be Willing to Walk Away

If you have your heart set on driving home in your new car, you’ll be more prone to impulse buying and over spending.

8. Research Incentives

Auto manufacturers often give dealerships rebates on certain vehicles. You might see these advertised on TV or in the paper as cash-back offers of a few thousand dollars off the manufacturer’s suggested retail price, or MSRP. Some incentives stay off the advertising radar, and dealers can offer them at their discretion.

9. Understand the Invoice Price

If your salesperson shows you the invoice and pleads, “Right here—that’s what we paid for this car,” it’s likely the truth, but not the whole truth. In addition to making a profit over the invoice price, dealerships earn bonuses and rewards on the number of cars sold from the manufacturer.

10. Stick with the Basics

Most cars come in several trim packages, with increasing prices to match their increasing options. A fancy high-tech phone synch package may be sexy, but what if it becomes obsolete? Models with high-tech features often have a lower resale value than basic models when it comes to trade-in.

11. Research Rates

Before you shop, research auto loan interest rates. You can compare loans at sites like Monevo. Knowing market rates before you go car shopping will let you know if you’re being offered a good rate. If you have good credit but get a quote for a high interest rate, see if they’ll take a point or two off.

12. Get Preapproved

Consider getting preapproved for a car loan. If you can begin the negotiation with the salesperson by saying, “I’m preapproved for financing,” it shows you are a serious buyer who garners respect. If you’re a cash buyer, don’t tell the salesperson straight away. Dealers make higher profits on finance deals, so let them bargain the car’s price on this basis. You can then decline the finance deal later in the process.

Client Success Story

“I used Bill’s car buying tips when I purchased my new Honda Pilot. It worked great: My car buying experience was quick and efficient, and I saved thousands of dollars!”
–Jennifer B in Hellertown, PA

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