In the United States culture, a car in proper working condition is a must have. Depending on where you live, it may be near impossible to carry on basic activities without one. But, a new car is an extremely expensive purchase. In a tight economy the decision about which car to buy and when should be made with careful consideration. Listed here are four tips that can seriously decrease car costs. While using all of them will maximize savings, we know that may not be a reality in all situations.
Choose the ones you think you can help you save, and stick to your guns! Buy Used This is a difficult one for a lot of people, but buying a car that’s one or two years old can save a boatload of money. On average, a brand new car loses 11 percent of its value the moment it’s driven off the lot. Over the next year, the car continues to depreciate quickly. After a year or two, the sharp decline in value levels off to a more gradual process. Buy Smaller Rather Than Larger Unless your specific situation demands a larger vehicle, a smaller car will be much cheaper in both the short and the long run. A smaller car is almost always less expensive to buy than a larger car. In addition, a small car gets much better gas mileage, and with gas selling at the prices it is currently, this would be a huge bonus when choosing a car. As a final incentive, smaller cars usually have lower insurance premiums than larger ones, offering further incentive to buy into the “less is more” theory. Consider What’s Under The Hood If the choice is between a manual and an automatic transmission (and you feel comfortable with both), go for the manual. On average, an automatic transmission gets about five miles less per gallon than a manual. As well, fewer cylinders will be cheaper. A six cylinder engine gets four to five fewer miles per gallon than a four cylinder. Combined, this means that the same model with a manual, four cylinder may get ten more miles to the gallon than a six cylinder automatic. That’s about a 30 percent difference! Don’t Get Your Loan From The Dealer We know it’s fast, it’s easy, and you’re already “pre-approved”. But, the fact of the matter is walking down to a nearby bank or credit union will usually cut your interest rate significantly. Additionally, dealers often add hidden finance charges. Get the car from the dealer, not the loan. The decision to buy a car is a big one with a lot of emotions tied to it. In the heat of the moment it’s a lot easier to agree, so it may be a wise choice to walk away, think about it overnight, and come back the following day. Missing a deal can be disheartening, but making a bad financial decision when buying a car will continue to cost you until the day you sell it. If you need additional advice about a specific model of car, give us a call. We’re happy to share any knowledge we have that can help. If you’re buying a used car, ask us about a pre sale inspection that could be the difference between buying a lemon and getting a sweet deal!