Your Trade-In is Probably Worth Less Than You Think

It doesn’t matter if you buy from a dealership or from a private individual, purchasing a secondhand car can be stressful. Which is exactly why we have created this comprehensive used car buying guide.

When shopping for a used car, focusing on those which are around three years old is a great place to start – the mantra goes “buy at three-years old, sell at five”. This is assuming of course you aren’t looking for a less expensive set of wheels – there is advice for such buyers in here too.

The logic behind this is that many new cars are bought on finance dealswhich run for around three years, so there should be a plentiful supply of cars returning to garages to buy at reasonable prices. You also save yourself from any large depreciation hits and costly repairs, such as timing belt changes, by focusing on these newer models. It’s a generalisation but data from warranty providers also suggests that car reliability tends to tail-off after 5 years so that’s a sensible point at which to move your used car on and look for a replacement.

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There Really is a Best Time to Buy a New Car

Every year, there are hundreds of articles published advising car buyers on “the best time to buy a new car.” Almost every month of the year is listed for different reasons. Holiday events, new model year clearance, slow winter months, and on and on.

But the truth is, the best time to buy a new car is before you need a new car. Regardless of crazy incentives, buying a new car before your current car has a major issue that requires costly repairs will save you a ton of money. If you can somehow tie that in to the time of year when manufacturers are ramping up the savings on new vehicles, even better.

The point is, don’t wait for a specific sale to buy a new car if you’re ready. Many aging cars are ticking time bombs, and unless you plan on paying the repair bills and driving each car you own into the ground, make sure you don’t have to “push, pull, or tow” your vehicle to the dealership!

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Leasing isn’t for Everyone

Car buyers today are always looking to save money, and if you’ve purchased a car in the past decade or so you know that monthly payments can have huge differences when comparing leasing vs. financing.

In general, leasing is the most affordable from a monthly payment perspective; however, buyers who plan to buy the car after the lease would likely be better off financing traditionally. This is due to the fact that your vehicle has to change hands from one financing company to another, and there are fees involved in the initial purchase and the subsequent purchase of the leased vehicle.

With good credit, you can secure low financing and have more say on the selling price of the vehicle when you decide to finance traditionally. While you may be tempted by lower monthly payments, that doesn’t mean you’re necessarily getting the best deal overall.

Finally, should you need to sell your leased vehicle for any reason, you may also be hit with extra fees or have a higher payoff than you might otherwise have when financing traditionally.

Leasing is a great option for buyers who want to take the stress out of car ownership and have a fresh car waiting every 2 or 3 years, so ask yourself if you want to save money or have less worries. Like most things in life, that’s often the choice it comes down to.

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Some Vehicles Depreciate More Than Others

Everyone has heard the saying “a new loses value the second you drive if off the lot.” This is true of every single car, with the exception of some very limited, very exclusive million dollar supercars with badges like Bugatti and Ferrari.

But there’s more to this saying than most buyers know. Many simply assume that new cars all lose the same percentage of value over time, but that couldn’t be further from the truth. In fact, depreciation can vary greatly from brand to brand, even within the same vehicle segment.

For instance, a Fiat 500L loses more value in one year than the average Toyota Tacoma or Toyota 4Runner do in three years. In fact, the Tacoma only depreciates 38.9% in the first five years, which is clearly why it’s the #1 in residual value according to Kelley Blue Book.

There’s no beating time when it comes to car depreciation, but if residual value is a big concern you should research the top vehicles in the segment you’re purchasing from and pick your favorite!

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How to Buy a New Car

1. Set your budget. Decide how much you can spend, what your monthly payment should be, and how you will finance your new car.
2. Choose the right car. Narrow the field and choose the model that best serves your needs.
3. Check reliability and ownership costs.Choose a reliable car that is inexpensive to own, even if it costs a bit more to buy.
4. Test-drive the car. Test-drive your top choices to see which car is right for you.
5. Locate your car. Cast a wide net by searching dealership inventories online.
6. Find the right price. Use pricing guides to see what other people are paying for the car you like.
7. Get dealer quotes. Contact several dealerships and ask for the best price.
8. Maximize trade-in value. If you trade in your old car, figure out how to get the most for it.Chek Oktilli for more

Make an Appointment with the Sales Manager

Once your research is done and you are ready to head to the dealership to purchase a new car, call ahead and make an appointment. By calling a sales manager to make your appointment, you communicate that you are serious about this transaction and know what you are doing. You will still be paired with a salesman when you arrive, but your chances improve of getting a straight shooter who knows you won’t be easy fodder.

There is no guarantee you will get a good deal on a new-car purchase, nor is there a set price to negotiate toward with any car; pricing always varies with content, age, supply, and demand. But following these rules will start you in the right direction to get the best deal possible on your new car.

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Do Not Buy a Car on Your First Visit

Use the first visit to look at and test-drive the car(s) you are interested in. Gather your information and then leave, and be adamant that you will not be buying a car today. This will communicate to the dealer that you are not going to be bullied. Watch what you say to the salespeople—especially if they ask you how much you are prepared to pay monthly—because whatever you say will be used as a starting point from which the dealer will go up when negotiations eventually start.


Collected from Oktilli