Part 3 - Ways To Save Money - David Ning

Transportation: New Cars

1. Avoid new cars. Because cars are made better now than they used to be, buying used isn’t as risky as it used to be. Buying a car even two years old can save you from 25% to 40%. But if you are going to buy new…
2. Always negotiate price, never payments. Payments can be manipulated so that practically anything is affordable. Salespeople will always try to get you to talk payments. Good negotiators always talk price: the payments will take care of themselves.
3. Choose your make and model carefully. You obviously want to buy a car that’s within your price range, but don’t forget to consider other costs, like insurance, gas mileage, maintenance and repair. These numbers are available in new car guides at your library or online at websites like www.kbb.com and www.edmunds.com.
4. Get the dealer’s invoice price before you shop. You can find it at many web sites (like the ones above) or in new-car guides at the library. Your objective is to pay no more than 3% over the invoice amount. Don’t forget to also get the dealers invoice price of the options you want on your car and negotiate those too!
5. Just say NO to fees. One of the main ways dealers make money on cars is to pad prices with extra fees like “documentation,” “advertising” and all kinds of others. Eliminate the ones you can, understand the ones you can’t, and check the final contract to make sure that eliminated fees don’t magically reappear.
6. Always get pre-approved for a loan before you shop. Even if you end up using dealer financing, it’s important to know how much you can borrow and what the rates will be. That makes you a tougher negotiator. You’ll especially need to know this information in order to choose between a rebate and low-interest financing. There are online calculators that will help you decide between a rebate and low-interest financing (do a web search), but generally, the rebate is the best option.