Save Money When Buying a Car

As I was driving through town this morning, I found myself looking at all of the cars on the road. While I'm not "into" cars, I do enjoy reading about new cars on the market and reviewing a car I don't know much about, but am considering purchasing. Then I began counting all of the cars we have purchased in our 27 years together. I came up with 20!! Wow, that's like buying a car every 18 months! What a waste of money - we know that we have not been responsible when it comes to this part of our finances.

I would not recommend changing cars so often, of course. Sometimes we bought a car that seemed perfect only to find that it wasn't - MPG too low, front seat doesn't fit me well, small car too loud when there are two toddlers in it (ha!), car is too noisy, car is not comfortable on long trips, etc. We are settled on the cars we are driving now and plan to drive them until they fall apart! We don't put lots of miles on our cars, so we should be good until retirement. Then, we plan to buy one more car each with cash before Jim retires and drive them until we can't drive anymore.

Here is what we have learned when it comes saving money when buying a car:

NEW VS. USED: We have bought a combination of new and used cars. I, personally, don't have a problem when someone chooses to purchase a car brand new. It really is a thrill to be the first one to own a car ... with the "new car smell," the shiny interior, etc. Our first cars and our last cars were both purchased new and we've bought a few new ones in between. The key to purchasing a new car is to buy a demo model, or make a deal at year's end or when there is going to be a model change. All of these situations have saved us thousands of dollars. For example, our 2014 Kia Sorento SXL (top of the line model with all of the bells & whistles) was a demo car purchased in October 2014 with around 5,000 miles on it. It retailed for $43,000 and we purchased it for $31,000 which was around the retail price of the base model at the time. It still smelled brand new, too!

DO YOUR RESEARCH: If you've settled on a car to buy, read as many online reviews as you can. It's nice to get an overview of all of the different opinions to help you see the entire pictures. We personally use AutoTrader.com to look for new & used cars. You can set the distance that you are willing to travel to get the best deal as well as plug in all of the features you are wanting in order to get a good listing of the cars available to you. Then, find several near you to check out and test drive. We believe it is better to spend a little more for a quality car that will last the long term. We all know that Toyota and Honda have great reputations. We have had great luck with Kia and Hyundai as well.

BE WILLING TO DRIVE FOR THE BEST DEAL:  To purchase my current car, a 2015 Jeep Renegade Limited, we drove from Tennessee to Ohio to get it because the dealer offered us the most value for our trade-in sight unseen! The Renegade was a first year model for Jeep, so there were only a certain amount of them available. In addition, I wanted the Limited edition with a particular interior color and that was even harder to find. We found what I wanted through AutoTrader.com and asked our local Jeep deal to do the same deal. They refused and told us they didn't think the Ohio dealer would honor their phone offer. Turns out they did and we ended up with the payment we wanted! It was a full day of driving, but well worth it!

KNOW THE CAR LOAN RATES: While, in a perfect world, we would purchase our cars with cash and never have a payment, that is usually not the case. So, before you buy a car, know the loan rates at your local banks and credit unions. You do NOT have to use the loan companies that the car dealers recommend. We always use our credit union because they have the lowest rates around unless the dealer is offering a 0% loan, which is quite common nowadays.

CHECK THE INSURANCE RATES BEFORE PURCHASING: Don't be surprised by a rise in your insurance rates AFTER you have already bought a car. Call your insurance company before and get a quote for the car you will be adding to see if it is going to cost more than you want to spend. You will need to know the VIN (Vehicle Identification Number) of the car you are trying to purchase in order to get the best quote.

KNOW YOUR BUDGET & BE WILLING TO WALK AWAY: Before we buy a car, we know what monthly payment we can afford and that fits well into our budget. WE WILL NOT SPEND MORE! We have walked away more than once when we couldn't get the payment we wanted and we've never looked back. Several times, the dealer has called back to give us the price we want. Don't be swayed into spending more than you want to ... there will always be another car to buy even if you have to wait a little longer.

BUY AT THE END OF THE MONTH: The last weekend of the month is usually the best time to buy a car because the sales people are trying to reach certain goals set by their managers. We've gotten our best deals by following this method! We usually will scope out the cars we are interested in the weekend before and then check back the last weekend to see if the car is still available. If so, we will then try to make a deal that everyone is happy with.

PAY CASH IF YOU CAN: I believe that I must add this here because it IS the best practice for buying a car. We all know that we won't want to drive the same car for 60 years, so there will always be another car to buy. In between car purchases, try and set aside what you can in order to reduce what you pay out of pocket for the "new" car. Who knows? You may find that you end up saving quite a lot and are motivated to save a bit longer in order to pay ALL cash for it!

I hope these tips are helpful to you! I wish we had known all of this earlier in our marriage as I think we could have saved some money over the last 27 years. However, we are smarter now and are teaching our kids how to save money buying cars. Our mistakes will benefit them!