Did you know the average new car costs more than $50,000?
In September, the average sale price of new cars in September was $50,080, according to Kelly Blue Book (KBB), a vehicle data company. That's the first time the average cost has been more than $50,000, which indicates that new car are just getting more and more expensive.
If you're looking for a new (or new-to-you) ride, you have a lot of incentive to find a good deal. No one wants to pay more than they should for a car!
Saving money on a vehicle starts long before you enter the dealership for that test drive. Here are a few tips to get the best deal on your car, truck, SUV or motorcycle.
Financing Options
Do your research on financing options! Most dealerships have a finance department that will be more than happy to help you with a loan for your vehicle. They may offer some incentives on higher-end new car purchases, but it can be difficult to qualify for those benefits. Because it can be so hard to qualify for those programs (and they often don't exist for used car purchases), shopping around for a loan is a really good idea.
When you shop around, you give yourself the opportunity to find better deals on your car loan. Reducing your loan interest rate by just a percentage point can save you hundreds or even thousands of dollars over the life of the loan. Before you head to the dealership, come talk to your credit union first. As a not-for-profit financial institution, places like CommonWealth One often have much lower interest rates and more favorable terms than you'll find at a dealership or at a for-profit bank.
The Benefits of Pre-Approval
There's another good reason to shop for loans in advance: Once you find a good deal on your car loan, you can get pre-approved! That means you can go to the dealership with an exact number you can pay for your vehicle. This helps you avoid pressure tactics from salespeople and helps you reduce the stress and time you spend on negotiating! Plus, a pre-approval will help you avoid upsells, higher financing terms and being pressured to pay for unnecessary bells and whistles.
If your credit score doesn't allow you to get the interest rate you want, CommonWealth One can help! Our certified financial counselors can give you a lot of tips on how to raise your credit score to quality for a lower interest rate. They can also help you find ways to save up for a downpayment on your vehicle, which can reduce your monthly payments, too. We're always just a call, click or visit away and we'd love to set up an appointment to help you!
Negotiating Tactics
Almost any car purchase will involve some negotiating. Getting pre-approved for a loan is a great negotiating tactic because it gives you a "ceiling" on what you can pay, and that helps you avoid buying more car than you can really afford. Here are some additional negotiating tips:
- If you come in with a pre-approval letter, be sure to show it to your salesperson so you're starting with a real understanding of what is and is not possible for you.
- Do your research! Before you go to a dealership, make sure you've done a lot of online research into your vehicle of choice and what dealerships in your area are charging for it.
- Take your time! Don't let a dealership pressure you into buying quickly or tell you a deal is valid "today only". There are millions of cars available for sale and you'll be able to find one that suits your needs next week or next month.
- Be willing to walk away. Your ultimate power is in one word: "No."
Skip the haggling altogether! As a CommonWealth One member, you can enjoy a stress-free car-buying experience through our Auto-Buying Service powered by TrueCar®. Search top local and national dealers online, see upfront pricing on new and used vehicles, and get a fair, haggle-free price before you ever set foot on the lot. It’s an easy way to save time, money, and peace of mind.
We hope you find the car you want at the right price, and we're here to help you whether you're in your minivan era or your sports car era. Come talk to us about your options -- and then come back and show us your new ride!
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