Next to buying a house, a car is typically your next most expensive purchase.
Whether it’s your first vehicle or an upgrade, it’s not a decision to be taken lightly, and especially not one to wander blindly into, lest you get taken for a ride (pun intended).
With the automotive market constantly evolving, staying informed is essential to make the right choice. You know what they say: “Knowledge is power.”
Here are six smart strategies to ensure you make the most of your car-buying experience.
Research the Market Trends
There are cars for sale all over the country and it’s not apples to apples.
Understanding the automotive market in your area is the first step toward making a smart purchase. Pay attention to fluctuations in vehicle prices in your region which can be influenced by factors like supply chain issues and seasonal demand. Are electric vehicles becoming more affordable? Is there a surge in demand for SUVs or hybrids in your region? These insights can help you determine the best time to buy and which models offer the most value.
Consider local factors as well. For example, if you live in an area with harsh winters, the demand for all-wheel-drive vehicles might spike during colder months, driving up prices. Alternatively, if you live in a fairly affluent area, you’ll likely find newer cars for sale especially as they face massive depreciation in those first several years.
Likewise, being able to see the average selling price for a specific model can help you ascertain whether you’re paying too much for a vehicle. This kind of intelligence gives you a competitive edge, especially when negotiating with dealerships. For instance, if you’re looking for a compact SUV and data shows that prices are higher in urban centers than in nearby rural areas, you might consider expanding your search radius.
All of these can influence what options are available to you as a buyer.
Set a Realistic Budget and Be Wary of Monthly Payments
It’s a pretty crazy stat, but auto loan debt is the second-largest category behind mortgages, according to the Federal Reserve Bank of New York, with Americans owing nearly $1.644 trillion in auto loan debt.
Therefore, it’s not surprising that budgeting is one of the most critical aspects of buying a car. Start by evaluating what you can comfortably afford as a down payment and calculate your monthly expenses based on realistic interest rates. A good rule of thumb is to allocate no more than 15% of your monthly income to car-related expenses and to have no more than half of your annual income in cars.
As you’re weighing your options, don’t forget about hidden costs such as extended warranties, dealer fees, and optional add-ons, all of which can quickly inflate the price without significantly improving your experience.
Lastly, know that dealerships have a wide range of tactics that they use in order to persuade buyers and make cars seem more affordable than they are. They’ll employ tactics such as focusing on financing offers with low monthly payments, but these can often mask the true cost of the vehicle. For example, they may steer the conversation toward the monthly payment rather than the out-the-door cost. A low monthly payment stretched over an extended term might sound appealing, but it can result in paying much more in interest over time.
Be prepared to focus the negotiation on the total price, not just the monthly payment, and ensure you fully understand every line item in the contract before signing.
Stick to your budget and be prepared to walk away if a deal doesn’t align with your financial goals.
Compare Used vs. New Options
One of the biggest decisions you’ll face is whether to buy a new or used car. New cars come with the latest features, strong warranties, and the peace of mind that comes with being the first owner. However, they depreciate quickly—sometimes losing up to 20% of their value in the first year.
If you’re looking to save money and get excellent bang for your buck, then a used vehicle might be up your alley. You might find a lightly used vehicle with low mileage and many of the same features as a new model at a fraction of the cost.
The key thing to look out for? Verify the car’s condition and history. With any used vehicle, it’s important to do your due diligence. Get it inspected, and make sure it has a detailed history so you know it’s been well-cared for. Always run your own vehicle history report to check for accidents, repairs, or title issues.
Additionally, tools like VinAudit can help you analyze depreciation rates and assess whether a used car is priced fairly. For example, a three-year-old sedan might have a similar warranty period and performance as its newer counterpart but at a significantly reduced cost.
Ship An Out-Of-State Deal To Your Doorstep
If you’re struggling to find the right car in your local area, expanding your search to out-of-state dealerships can open up new opportunities. In some cases, buyers can find lower prices or rare models that aren’t readily available nearby. However, purchasing a car from another state comes with additional considerations, such as taxes, registration requirements, and transportation logistics.
Don’t fret though, because some states such as Delaware, Montana, and Oregon don’t have sales tax, which means that you’ll offset the cost and score a vehicle for a good deal.
Once you’ve found the perfect vehicle, arranging for a reliable transport service is key to ensuring a smooth delivery. Most companies offer a seamless solution for shipping vehicles across state lines, providing secure and efficient transport for buyers who need their new ride delivered safely.
Whether you’re buying from a private seller or a dealership, working with a trusted auto shipping company can make the entire process hassle-free. Getting an estimate is as easy as filling out their car shipping quote calculator which will give you a rough price within minutes.
Timing Your Purchase
Timing can be a great ally in your car-buying experience. Dealerships often offer better deals during specific periods, such as the end of the year, holiday sales events, or when they’re trying to clear out older inventory.
For example, if you’re eyeing a 2025 model, waiting until the end of the year might result in discounts as dealerships make room for 2026 inventory. Similarly, shopping during slower months—like January or February—can give you an advantage, as dealers are more likely to negotiate to meet their quotas.
Market data can also highlight seasonal trends, helping you pinpoint the best times to purchase specific types of vehicles. Planning your purchase strategically can save you thousands.
Selling Your Car Privately vs. Trading It In
If you’re upgrading vehicles, chances are you’ll be thinking about what to do with your current car: trade it in or sell it yourself?
While trading it in at a dealership might seem convenient, selling your car privately is often the better financial choice.
Dealerships typically offer trade-in values that are lower than the car’s market value because they need to resell the vehicle at a profit. For example, if your car has a fair market value of $15,000, a dealership might only offer $12,000. This difference could be even larger for older or less popular models, and this is a big reason why they make so much money on used vehicles – you give up the profit for convenience.
If you want to put some money back in your pocket, selling privately requires more effort but can yield significantly better results. An online marketplace or car-selling website makes it extremely easy to connect with buyers willing to pay closer to market value. By selling privately, you keep the full proceeds towards your new car.
However, if you value convenience over maximizing profits, a trade-in might still be worth considering. You’ll just want to be equipped with your car’s fair market value beforehand walking into the dealership.
Sally Forth, Car Buyers
Buying a car can be an exciting but challenging process. By doing your research, creating a realistic budget, carefully considering your options, and planning your purchase strategically, you can approach the experience with confidence.
Whether you’re deciding on a new or used vehicle or figuring out how to handle your trade-in, taking a thoughtful approach will help you find a car that fits your needs and budget. With these strategies, you’ll be in the driver’s seat for a successful car-buying experience.