How to Buy a Car – and Actually Save Money

Is your current car on the fritz or have you been eyeing that shiny new Jeep you see parked at a dealership on your way to work? If you’ve been hesitant to buy a new vehicle because you’re worried about it costing too much, here are some ways you can get the car you’ve had your eye on while still saving money.

Get Pre-Approved

Before starting your search, you should get pre-approved for a loan. It’s important to know what limit you qualify for and match that up with your monthly budget. It has been estimated that your total auto expenses should not exceed more than 10 percent of your yearly income. This includes the loan, insurance, maintenance and interest. When you know your limit, you can stop yourself from gazing at cars out of your price range that you may have otherwise talked yourself into buying.

Sell Your Current Car

Many times, the dealerships will ask for you to trade in your vehicle in order to get a “better” deal on the new car. However, you can typically get more for the auto if you sell it privately. It may cost you some additional time to fix anything major with the car, as well as listing it in the local classifieds. The dealership will turn around and sell the car for a profit anyway - shouldn’t that extra money be yours to put towards your new wheels?

Shop Around

You are your best advocate when it comes to finding and buying your new car. Don’t make any decisions right away. A smart way to start looking is to search the average value of the car you are wanting. Look at reputable sellers online to see what the cars are typically going for, so you don’t find yourself getting swindled by a dealership transaction.

New to You Is Often More Valuable

The minute a car is driven off the lot, it loses a significant amount of value. Often, the newer cars aren’t necessarily any different than cars from a few prior years in terms of features. Consider buying Certified Pre-Owned vehicles to save yourself hundreds or thousands of dollars.

Be Wary of Extended Warranties

Many dealerships will push heavily for you to have an extended warranty because this is how they make a large portion of their money. It is your choice whether it is worth the risk of not accepting the warranty. They are usually very expensive and do not make it worth your dollar in the long run.

Allow us to help you with a big purchase like this – we’d be happy to speak with you about our options.

Exchange Bank of Northeast Missouri

Member FDIC

Equal Housing Lender

NMLS# 483241