A car is one of the biggest purchases you will make in your life. And sadly, unlike real estate, it’s not really an investment. It depreciates quickly, generally doesn’t last terribly long and the styles change so quickly it can be easy to become dissatisfied with the one you have. Buying a car without getting ripped off is important for anyone, but especially singles, need to get a good car but not get ripped off.
As someone who doesn’t have a spouse to call if I get stranded on the side of the road I want my vehicle to be dependable. I don’t want to have to call in a favor from a friend to come and get me.
Buying a Car Without Getting Ripped Off
Don’t Wait Until you Need a New Car to Buy a New Car: One of the first pieces of advice I was given by my father when I thought I might need a new car soon was “don’t wait to buy a new car until you have to have someone drive you onto the car lot.” The last thing you want is for the car salesman to realize you are desperate and need something to drive home in. You need to have the power to walk away and still have transportation. This way you can sell your current car or trade it in.
Save as Much for a Down Payment as you Can: People act like their cars are going to last forever. Once your current vehicle hits 100,000 miles, you are likely halfway to the end of your vehicle’s life. If you are lucky enough to have no car payment, you should begin saving as soon as you can in anticipation of your next vehicle purchase. If you have a car payment, as soon as you pay off your current vehicle, keep putting aside that car payment amount into savings each month to use for a future vehicle.
Consider Going Out of Town: With the internet as a resource, you can see vehicle prices all over the country. Sometimes by driving out of town (or if you really find a deal, flying out of town) you can save big money by sacrificing time. You also may be able to get a better kept vehicle that way. For example, my friends from up north see damage on vehicles from the salt used on the roads to keep them ice-free. By buying a vehicle from a warmer climate, they often skip that damage.
Don’t Buy New: Vehicles lose more than 10% of their value during the first month after you drive them off the lot. After the first year, you should expect to lose more than 20% value. And then, 10% for each year in the next four years. This means that after five years, your car may be worth only 40% of what you paid for it.1 If you can find a car three or four years old with low mileage, you will get great value.
Use the Power of the Internet: While the internet has complicated some things, it has done the opposite for car buying. Never before have we had more information on both the actual vehicles themselves and the pricing across the country. The last time I purchased a vehicle, I showed up at the dealership to look at a car that the salesman didn’t even know was on the lot. Their web person processed all the vehicles and got the information out quickly. When you are buying used and know what you want (which I did) you have to jump on it when the stock is available.
Looking For More Money Saving Tips? Check out How To Save on Appliances!
Shop Around for Interest Rates and Loan Conditions: If you need to take out a loan, one of the biggest ways you can save is to really shop around for loans. Most 0% loans are going to be on new vehicles, so you really don’t save when you consider the depreciation numbers you have seen above. Used car loans can be available from dealerships as well as your local credit union and bank. Since you have pulled your credit report and know your score, you should have some idea of the kinds of offers you will get.
Be Ready to Walk Away: Every time I have purchased a car, I have walked away from the table and the salesman has yelled after me to come back. When your current car still runs, you can leave and wait for the right deal on the right car.
Following these steps ensures that Buying a car without getting ripped off can be easy for you too!
Laura M. Oliver is the author of Singles: Take Control of Your Own Financial Journey. It is available in paperback and Kindle on Amazon.