How to Save Money on a New Car

New cars are the second-biggest purchase after a house that most people make. It can be very costly and stressful if you aren't prepared for it. There are several different ways to reduce the amount of stress this large financial transaction can cause, as well as several different ways to decrease the amount of the actual purchase--even if there is a sticker price! Here's how to plan to buy a new car.

Difficulty: Moderate

Instructions

Plan Ahead

1. Plan on at least three to six months to save before buying a new car, if possible. The longer you have to save, the more likely it is you will meet your goal.

2. Research the lowest and highest prices for the cars you like.

3. Figure out how much you can realistically save. Try to buy a car with cash if at all possible.

4. Create a realistic budget and stick to it. If you save more money than you budgeted for, set it aside for something else.

5. Begin paying off debt if you have any. This could significantly reduce your interest costs on a car loan.

Decide on a Car

6. Decide what is most important to you: price, safety, amount of seats, style, room for items or other consideration.

7. Find ten cars that fit your top requirement.

8. Evaluate which of these ten fits into your other categories.

9. Rank them in order of which fits your top priority, then in order of which fits the most of the other categories.

10. Throw out any cars out of your price range. You should have no more than five cars now.

11. Go to the dealer and look at the remaining cars. Take note of features for safety, cost-cutting features and features for convenience. Note whether you are comfortable in each car.

12. Go home and think about which car you liked the best. Don't buy the car that day.

Getting the Best Price

13. Take someone with you who knows about cars, preferably someone with experience dealing with car dealers.

14. Ask questions, but let them know you have researched all of this. Let your friend help you if needed.

15. Stick to your budget. The dealer will try to add fees and other options that sound great, but these will add to the price.

16. Check all insurance and guarantee programs before agreeing. These usually don't cover most things you need, so be sure they cover enough to be useful.

17. Check that you can make extra or early payments without penalties.

18. Get the lowest payment plan you can, but check that the interest is worth it. If you don't get early payoff penalties, you can always make a higher or extra payment and won't be in trouble if you can't pay as much as usual.