6 Ways You Can Buy Your First Car While Saving Money

6 Ways You Can Buy Your First Car While Saving Money

Buying a car for the first time can be an overwhelming task. It isn’t as simple as just going to the dealership and picking out a car that catches your eye. With this being such a major investment, there are a lot of things to take into consideration.

Many people don’t think about all the details and specifics of buying a car until the process is well underway. Things like the types of tires, added features, financing and maintenance can be surprising considerations when they finally come up.

Don’t wait too long to ponder the finer details of car buying. The more specific you can be before you get to the dealership, the more likely you are to leave with a car that is truly right for you and to save money.

Here are 6 tips on how to buy a car for the first time while ensuring you save money in the long run.

1. Figure Out What You Need

A good place to start if you want to buy a car is: Where do you go in an average week? How far away are those places? Are there new or farther places you would travel to with a car?

Be honest about your needs and wants and how you will use the car. This can give you an accurate picture of not just the type of car you need, but also what that car will cost you to own.

Assessing your needs is important because owning a car is about a lot more than just the initial cost of buying the vehicle. The money you’ll need for this car goes beyond the monthly payments. It also includes things like the cost of gas, any maintenance you have to pay for and the upgrades you need based on your usage.

Also consider how much you are hauling. Do you need to have other people in the car frequently, or perhaps large pieces of equipment? This will change your car buying prospects. A van might be more practical than a compact car, even with the increased money for gas. However, if you live in a city, a large car could be impractical.

Likewise, you should consider the climate where you live and work. Different climates are better or worse for different cars.

For example, if you live in a place with a lot of hills and snow, you might need to think about the type of tires your car has. If you need off-road tires, there are four types: all-terrain, mud-terrain, snow/winter, and sand. Figure out if you need any of these specialized tires to cope with the weather where you live.

2. Carefully Design Your Budget

Figuring out what your budget is for your new car is crucial. Now is the time to be fussy about your money and how you spend it!

The budget for your car isn’t a one and done deal. This is a payment that will become part of your monthly bills. You have to be able to afford it not just right now, but for the long term as well.

In the U.S., the average price for a new car is $35,309. That’s not a small amount of money to consider spending.

There are some good ways to go about ensuring you have the money on hand for a new car – now and in the future.

First, consider the entire cost of the car. If you get a car for around $27,000, it is going to cost you more than that over time because you will have to pay interest on your car loan. Factor in how much time that will take and how much extra money that will cost you.

But you also have to think about how much all the extras that go with car ownership will cost you. This includes things like:

  • The price of gas
  • Any tolls in your area
  • Maintenance costs
  • Cleaning costs
  • The cost of car insurance

All of these can heap on to your monthly car payment. And sometimes it happens in unexpected ways. Repairs are not always predictable. Sometimes something breaks without you knowing how or why. Plus, there is the unfortunate circumstance of an accident. Sadly, accidents are not very uncommon. And the cost could be high if there is significant damage to the vehicle.

Even with ordinary and expected costs, you might not realize how much money you really need in order to own a car. For example, gas can cost $30-$40 every time you fill-up. For larger cars and gas guzzlers that number could be even higher. In 2017, AAA estimated the average yearly cost for gas alone was about $1,500. That figure has likely gone up since then.

3. Stick To Your Budget

It’s not enough to simply make a budget. You have to stick to it when you get to that dealership and choose a car.

In the thrill of the moment, all your careful planning can go out the window at the car dealership. That’s dangerous, as it could cost you a lot of money in the long run. It is crucial you go in with a plan and stick closely to it.

For example, don’t get talked into leasing a car. You should stick to buying a car, even if you end up buying used instead of new. Dealerships will often try to sell you on the idea of a car lease, saying it has a lower monthly cost.

However, that masks the fact that car leases are more expensive than buying in the long run. Plus, you are still on the hook when it comes to car maintenance costs. And in the end, you have nothing to show for all that work. You might even have to pay fees when you return the car to the dealership.

4. Be Flexible

This might sound like it contradicts the previous point, but the two actually go hand in hand. You can stick to your plan and budget, while still having some flexibility in how you go about buying your car.

For instance, you might arrive at the dealership thinking you are going to buy a new car and planning your budget around that. But when you get there you may find it makes more sense to buy a used car instead.

There’s nothing wrong with that! You can absolutely buy a used car that will serve your needs and your budget wonderfully. And used cars can save you a lot of money overall. With GM alone making about 9.8 million cars worldwide in 2015, there are plenty of used cars to choose from.

New cars also depreciate in value very quickly. In the first five years, they may be worth just 37% of their original cost. So if resale value is a concern to you, buying used instead of new really won’t cost you much money.

Plus, used cars can be significantly cheaper than new ones. If you are planning to use this vehicle for years to come, a used car can mean huge money savings in the end.

5. Save Money on the Extras

It isn’t just the cost of the car itself you need to consider. There are also things like insurance, maintenance and gas that will eat up your car-buying budget quickly.

If you are savvy, it is possible to save money on these key areas of car expenses:

  • Car payments
  • Insurance
  • Gas
  • Maintenance
  • Repairs
  • Depreciation

First of all, when it comes to your car payment, you aren’t as locked into that initial number you’re told as it may sound. You can always downsize later if the car you buy becomes too expensive for your lifestyle.

You can also refinance your car loan to save money. This might get you a better rate on the loan itself or extend the term of the loan. That can mean you end up paying more in interest over time, but that the payment itself is more manageable on your budget.

Next is insurance. This is a bigger expense than people often believe it will be.

Just like with the car itself, you can and should shop around when it comes to your car insurance. You might also consider having a higher deductible in order to lower your payments. This is a little bit of a risk, but depending on your tolerance for risk it could be a good option to save a little money.

A clean driving record will also help a lot when it comes to insurance costs. This isn’t always in your control, but to the extent possible, help yourself out by keeping your driving record clean. Then, shop around and use every discount you can find to lower your cost.

Gas is an expense you’ll have to deal with a lot. The way you drive can actually impact your gas costs significantly. Those who drive more aggressively tend to use more fuel than people who drive more moderately.

You can also be smart about where you get your gas and keep your car in good condition. Sneaky maintenance issues can actually cost you money. A car with poor maintenance can use more gas.

And when it comes to maintenance, you should be doing regular maintenance to keep your car running smoothly. This is expensive at the moment, but the cost of slacking off on maintenance is even higher.

Even the best-maintained vehicle will eventually need repairs. When it comes down to it, do your own research before going to the shop. If you approach your mechanic with knowledge about what kinds of repairs you need and how much they typically cost, you will be better armed to get a good deal.

The task of finding a good mechanic can be daunting. Word-of-mouth is one of the best ways to ensure you find the right mechanic and don’t waste money. Yelp is another good resource. Going back to the dealership is probably the most expensive option, but it does come with the benefit of guaranteed superb service.

And, finally, there’s depreciation. This is the way the car loses value as you drive and own it. This begins the moment you leave the dealer’s lot.

Depreciation won’t hit as hard if you buy a used car. You can also do research before buying your car to see what types of cars retain more value as they age.

6. Buy At The Right Time

Timing matters, even in car buying! End-of-the-year sales actually have a huge impact on car prices.

If you can, you might want to buy a car closer to the end of the year. This will allow you to scoop up a good deal that can save you money.

Weather can impact car prices as well. It sounds strange, but cold weather really can deter buyers. People are buying less when the weather is cold and miserable and that might be a great opportunity for you to find a deal.

Also consider the time of week and month. The beginning of the week is better for finding a deal. And the end of the month is the most likely to net you some savings. Car salespeople have quotas to meet. As those deadlines approach near the end of the month, they become more likely to cut prospective buyers a deal.

Getting The Best Deal

No matter what your goals and desires are for your new car, getting a good deal basically boils down to going in with a plan. Know what you want, what you need and what you can afford. By managing your money well before you buy a car, you will be empowered to enjoy your vehicle rather than stressing over the costs.

Be honest about all the costs that come with having a car. There are a lot of extras and add ons that aren’t on the sticker. Being a car owner can be much more expensive than you anticipate. But also think about your needs and wants. It’s OK to be excited about this big purchase, even while you’re trying to be smart about it!

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