Buying a new or used car is a big purchase. With the average cost of a new car or truck going up to $33,560 in 2017, it’s safe to say that a significant portion of your income is going to be tied up in your new vehicle for the next few years. Even with cash back incentives, and a good down payment, it’s important to understand what makes up your car payment. What factors go into how much you pay each month? What can you do to make sure you can get the most car without breaking your budget?
The total cost of owning a new or used vehicle is made up of a few different things, monthly payment, insurance cost, operating costs, and total cost of maintenance. Most of these costs (other than local registration and license fees) are completely controllable in most situations with a bit of work and dedication. Here are 5 ways to cut the cost of buying a new (or new to you) car.
- Tighten Up Your Credit – Sounds simple enough, but how often do you actually check your credit score? Even if you have perfect payment history, that doesn’t mean that there may not be errors in your report. Check your reports and if necessary start to clear off any errors or bring old accounts into good standing. Your credit score directly affects your interest rate so this is very important.
- Don’t Buy Too Much Car – Again this sounds simple, but its hard to do when you’re faced with the car of your dreams. This is when you need to really take an assessment of how much it’s going to cost you to own the car you want to buy. Sports Cars are pretty, but the insurance is unbelievable
- Take advantage of Cash Incentives – Many dealerships offer cash back bonuses on certain models or with certain sales. Look hard at any types of cash rebates, dealer cash bonuses, or loyalty trade-in cash. All of these will lower the total cost of your loan, meaning a lower payment.
- Take Care of Your Trade in – The better shape your trade is in, the better price you get for it plain and simple.
- Use Your Warranty to its Fullest – The service warranty that comes with your new car gets you several great benefits, like free oil changes for a set period of time, and covered repairs within the time limit. Use this to your advantage and keep your car looking and running its best.
There are several ways to lower your overall costs when buying a new or pre-owned vehicle. If you do your research and plan accordingly you should be able to get the car you want at the price you need.