Getting a new car is an important financial decision to make, especially if you can plan your car purchase in advance. The method that you are going to use to pay for your new car is one of the most important factors to consider. Some people apply for a loan from their bank, while others will finance their new car through the dealer. Or, some opt for paying cash in full for their new car in order to own it outright and avoid making monthly payments. Keep these tips in mind if you want to save money when buying your next car.
Pay In Cash If You Can
If it’s possible, you can save money by paying in full for your car using cash. Along with owning the car outright and being able to avoid making monthly payments, this method also means that you can save quite a large chunk of money over time on the interest payments alone. Along with this, some dealerships will offer a discount if you pay in cash for the car.
Research Cars in Advance
Before you go out to look for a new car, make sure that you are aware of the market value of the cars that you are interested in. This will make it easier for you to spot when you are getting a good deal and when you are likely to get ripped off.
Shop Around for Finance
Paying in cash for a car might be the best way to save money over time, but it’s not always possible, especially if you are looking to buy a fairly new car. If car finance is the best option for you when it comes to purchasing your new vehicle, then it’s a good idea to spend some time researching and shopping around for car finance deals before committing. You can use the ChooseMyCar website to get a quick, free car finance quote. Simply head to the ChooseMyCar site and enter how much you want to borrow, how long you want to borrow it for, and whether your credit rating is excellent, good, poor, or bad to get an idea of how much you will be repaying monthly.
Save For a Bigger Deposit
If you are going to buy your car using finance, then spending more time saving up for a larger deposit is a good idea. The more you put down upfront when buying your new car, the more your monthly payments will be reduced, as the less you will need to borrow to purchase the car.
Choose a Used Car
While being the first person to drive a brand-new car out of the showroom might be a tempting idea, this is usually the most expensive option. Brand new cars can lose a lot of value simply because they have been driven away from the showroom and now have some mileage on the clock. After the first year, a brand new car could have reduced in value by thousands of pounds. On the other hand, buying a used car means that you can skip this deterioration in value and pay less for a car that may still be fairly new.
Trade In Your Old Car
If you are looking to upgrade your current car for a new one, then a good way to reduce the overall cost of purchasing your next vehicle is to trade in your car to offset the cost. Most dealerships allow for part-exchanges towards the purchase of your new vehicle. If you are buying your next car on finance, it might be possible to use your old car towards the deposit payment.
Be Aware of the Entire Cost
When buying your next car, it’s important to make sure that you consider the entire cost to save money. Consider your monthly payments if you are buying the car on finance, the interest rate, insurance costs, tax, maintenance, fuel, and more. While it might seem like you are saving money when you look at the monthly payment, this might not always factor in everything else that you need to pay for when it comes to owning and running a car.
Read the Fine Print
If you are using a loan or a car finance package to buy your next car, then it’s important to make sure that you read the fine print. Some loans may come with penalties for repaying faster, for example, so if you plan to make larger repayments in the future to clear your debt and own the car outright sooner, then make sure that you know what the rules are regarding this.
No matter what kind of car you want, having a solid plan in place and spending time researching your options will help you save money on your purchase. While buying in cash is the best way to avoid interest payments, there are several things that you can do to bring the overall cost of financing a new car down.
