How to Buy a Car Without a Trade-In

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Buying a car without a trade-in can be a snap if you do your homework.
Buying a car without a trade-in can be a snap if you do your homework. (Image: Thinkstock Images/Comstock/Getty Images)

Car buying is a big deal. One of the biggest purchases you make in your life, next to your home, is a car. There are many ways to knock down the price of a car whether you buy new or used. Dealer rebates, cash incentives and trade-ins all help make the cost manageable. If you don’t have a vehicle to trade in, you will have to do plenty of homework to get a good deal.

Develop a comprehensive list of your wants and needs for your new purchase. Be as specific as possible. Consider what the purpose of the vehicle will be. If it is for leisurely Sunday afternoon drives in the country, maybe a sleek two-seater will do the trick, but if you need it to taxi your son’s baseball team to and from games, you may want to consider another option.

Establish your budget before you visit dealerships so you avoid being convinced you can afford more than you really can. Talk to your banker to find out how much you will be able to borrow and which financing option is best for you, be it a home equity loan or an auto loan. Walking in to a dealership with this information alleviates the desire to dream shop. If you know you can’t afford the Porsche, stay away from it.

Do your research on dealer incentives, rebates and financing deals. Include multiple dealers in your research. Since the trade-in option is off the table, more effort is required to seal a better deal. Besides TV and newspaper ads, Edmunds.com lists up-to-date incentives and rebates. The site also tracks hidden incentives paid to dealers called “dealer cash.” Many people are unaware that dealers receive these incentives. You can use this information to your advantage in the negotiating process.

Contact multiple dealerships with information about the exact car you want to buy and incentives you know about. Allow these dealers to begin the bidding war. The Motley Fool suggests waiting until about one week before the end of the month. Dealers may be more interested in moving inventory and offer a better deal.

Set up financing with your bank or the dealership. Before you drive off into the sunset, however, make sure the dealership shows you the car is fully functioning. The Motley Fool advises that this process be even more thorough than the demonstration during the test drive. Have someone go over every feature in the car from the radio to the heated seats to the power locks and windows. Even though they may have done this at the test drive, make sure everything is working on this particular car. If you are satisfied with everything, sign the papers and hit the road.

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