Quit Setting Your Money On Fire

Out With Your Old Clunker And In With A Brand-New Car: 5 Ways To Afford The Deal

by Kathryn Watson

If you've spent all your driving years buying one hand-me-down clunker after another and are dreaming of the day you can finally find yourself behind the wheel of a new model, stop dreaming and make it happen. There are many opportunities for you to make the deal more affordable, meaning your new car is probably a lot closer to becoming a reality than you might think.

1. Have Patience And Save Your Money

Since you've waited this long, you'd be wise to shop around, determine which vehicle is best for you, and then start stashing your pennies. The larger your down payment, the smaller your monthly payments will be, so it makes sense to save for it if you're on a tight budget. You'll also need to pay more to put the new car on the road than you have for your previous "clunkers", making a savings plan even smarter. There's a difference between driving a clunker for years and finally taking active steps toward making the new car a reality, meaning that while your dream is still on hold, it's coming closer with every day and every dollar you save.

2. Consider A "Stripped-Down" Version Of Your Favorite New Car

One of the more practical ways to get into a new car is to look for one without a lot of added options. These basic models aren't the ones you see on the showroom floor, and you may even have to search high and low and ask salespeople specifically about stripped-down models, but in consideration of your budget, it will be worth your while. There's nothing wrong with driving a basic new car model, and you can always add more options as time goes by and your financial circumstances allow.

3. Wait Until The Right Time Of Year To Buy A Car

Some consumers may not be aware of the fact that there are right and wrong times to buy a car and if you can hold off on your purchase, the savings are significant. Think from the perspective of the dealership, whose goal it is to move as many vehicles as possible in any given period of time, and you'll start to get a few good ideas about when the best times to shop are:

  1. Mondays, because they're usually slow for dealers, following the spree of weekend shoppers. If they're not busy on Mondays, they may be more likely to give you a better deal.
  2. When new models start arriving, as the dealer wants to clear out the lot to make room. Most new models start showing up around June, so May can be a great month for deals.
  3. The end of a year, when dealerships are trying to meet quotas and quarterly goals. Right before the hype of the New Year's auto sales and promotions, try to snag yourself a rock-bottom deal.

4. Negotiate The Most Advantageous Auto Loan

If you have reasonable credit, you should be able to shop around for a lender who is willing to work out an equitable deal for you. Although interest is inevitably going to be paid on the loan, the less you have to fork out, the better. Go to different auto loan lenders and tell each of them what your last best offer was; hopefully, if they really want to do business with you, they'll match or beat other offers, and you end up with the most favorable auto loan terms possible. Don't forget to check the dealership's terms, too, as they may also have great cash back and financing incentives for your first new car.

5. Increase The Value Of Your Current Trade-In Vehicle

Unless the car you're driving now is a total lemon, you should be able to take some steps to increase its value and thereby improve your financial outlook when buying a new car. Find out what your trade-in might be worth right now, as is, then see if you can't up that ante for yourself:

  1. Gather all the car's paperwork, including all service history. A well-documented car has more appeal to a dealer than one without a history.
  2. Make repairs, as long as they'll add more value than what you pay for them. If you know a good mechanic personally, get a deal on a tune-up and save the documentation for it.
  3. Clean the car meticulously, both inside and out. Although this is purely aesthetic, it can help you out when it comes time to trade the car in.
  4. Look into selling the vehicle on your own, rather than trading it in. Often times, you'll get more cash for a car (even a clunker), if you sell it by yourself, as opposed to trading it to a dealer.

Yes, you can see yourself finally driving a brand new car, but it's not going to happen if you don't take action. Start looking around and introducing yourself at dealerships, get your trade-in as presentable as possible, research your auto loan potential, and make your mind up to make this deal happen.