How to Cut Down Prices on your Car Purchase
Buying a car doesn’t need to be the most harrowing, most stressful and costliest experience that you have to go through in your life. There are ways and means to go about the big prices of getting your car, and it only takes your diligence and commitment to save money. If you’re looking for tips to reduce the price you pay for your car, read on.
One year old cars are cheaper than new cars, and it comes with a significant margin.
The average new car has a list price of around USD 37,000. However, by the time it’s one year old or with 10,000 miles under the hood, it would then cost at just USD 27,000 – a reduction of more than 27% in the first 12 months.
In the second year the depreciation rate is likely to slow by roughly half (so the second year, this average car would lose around USD 5,000 in value).
Because of this, picking a year-old model can dramatically diminish the upfront cost. Of course, there are known exceptions, especially when you’re picking luxury models. Brands that hold their value best tend to include Mercedes and Porsche – so you won’t see too many year old luxury car bargains out there.
Find the cheapest cars to run
There are various rules of thumb when it comes to choosing which car would be cost-efficient in the long run, so use that to your advantage.
Generally, the smaller the engine, the cheaper it is to run. The choice of a 1.0-litre or a 2.0-litre engine isn’t just about pure horsepower: a large engine will usually burn more fuel than a smaller one. So engine size is a vital consideration if fuel economy is an important factor in your decision.
Then again, this depends on how you use the car. A small engine is most efficient when it’s used as intended, such as to stroll around town. However, if a small engine is used at high speed runs, it’ll need to work much harder to keep the car moving which in turn burns more fuel.
Petrol cars tend to be cheaper than diesel. Surely, diesel engines are often more economical than their petrol counterparts; but don’t be fooled into thinking this definitely makes diesel a better option. These cars are more expensive, and they usually cost more at the pump than petrol.
Manual cars are also cheaper than automatic ones. It’s true that switching between gears requires extra work – particularly to those who travel the roads that are prone to stalling at traffic lights. However, while automatics take some of the hassle out of driving, they come with a higher initial price tag.
A manual Audi A3 diesel hatchback, for example, costs about USD 26, 871. This compares to the automatic version, at about USD 28,795 – or a rise of almost USD 2,000. Surely, some automatic cars are more fuel-efficient than their manual counterparts, but it takes too much time for automatic cars to mitigate the initial cost deficit through saved fuel cost. Plus, fuel efficiency discounts are not definitive in terms of being calculated.
Hybrid cars are also cheaper to run, but cost more to buy. Having an engine that can run on a mixture of fuel and electricity are really cost-effective when it comes to power purchase.
Modern hybrids also can hold their value for resale. People tend to buy quality Japan used cars or those modern American or European made hybrid cars nowadays because of sheer performance ratings. In this regard, you can use the resale value to decide on which car you can purchase.
Finally, it is important to check CO2 emissions, as it affects the duty you need to pay. This is because buyers of the most polluting cars pay the most road tax. The best way to reduce these minor – but bothering anyways – costs is to choose a car (such as the emission-free hybrid Toyota Prius) that produces less than 100g of CO2/km.
Knowing what car you ‘need’
Before you start searching for the perfect car you want, thinking about what you really need in a car can help you pick the most cost-efficient one, saving you more money. There’s no point in buying a two-seater convertible if you’re about to start a family, so work out what’s realistic. You can ask yourself the following questions:
- What are my basic needs? Enough room for the family? A cheap car to run? A flashy car for the nature of my work?
- Do I need the car to do anything specific?
- Do I want short city drives or long road trips? Does it need to be able to cruise at motorway speeds without straining?
- Which do I prefer better, petrol or diesel?
- Do I need a pick-up or one with a huge trunk? Do I need a massive boot?
- Do I want to consider an eco-friendly car?
Timing is a Big Thing
Once you’ve already picked the car that you wanted, you now need to know how to get the best deal. One way to slash costs is to buy at the right time.
It would be helpful to know the psychology of car dealers when they are selling. Dealers have targets to meet, and when the deadline draw near, they resolve to sell cars with bonuses up for grabs. Typically, these are based on quarterly sales, making the end of March, June, September and December a good time to buy. They need to shift cars, making them more willing to negotiate and offer attractive finance packages.
Haggling is not bad at all
Haggling isn’t just for backstreet bazaars and Japanese surpluses; it’s a dealer’s classic skill. Bargain hard, and you might just break a very good deal for your own. The first rule is that you should never pay the list price of the car – dealers will be happy to get the list price but are actually expecting buyers to go lower. You can look at online haggling guides to help you through the art of haggling.
For beginners, the first step is to get them to chuck something in for free. Dealers often say they’re not allowed to give discounts, but if you’re new to haggling, an easy start point is asking them to throw something in on top of the main purchase. It could be free sat-nav or floor mats. The key is that you should get an add-on and make it to a point not to pay extra for it.
Also, it may seem a given, but you do need to look for discounted cars. If the price is already reduced, there’s often more room for price flexibility. The boundaries have already been flexed and the psychological loss for the salesperson is reduced as they’ve already given up on the idea of getting full price.
When you already found the perfect car, it’s now time to close the deal. At this point, don’t be afraid of awkward pauses and go for the need to fill the silence. As negotiations come to a close, a classic sales technique is staying silent. They want you to accept the price just to fill the awkward silence. Make them fill it with a cheaper offer.
Lastly, you can do the “Walk away” strategy. Look interested enough then leave them in a position where they would most likely call you back. Psychologically, if they have to chase you rather than you begging them, it is more likely for you to get the better deal.