Optimal Timing for Car Purchases + Money-Saving Tips for Your New Vehicle Acquisition

I have to admit that getting a new vehicle is one of my favorite feelings.

It’s also the largest financial transaction that most people make.

You’ll save money over the lifetime of your car if you get a good deal. A bad deal can haunt you for many years.

Fundrise Review – Online Real Estat

Fundrise Review – Online Real Estate Investing w/ Crowdfunding

You may even be able to buy a new car!

This can be avoided by planning ahead for your new car purchase.

How you choose for buying a vehicle will determine whether you get a good deal.

This post will answer all of these questions, and provide you with the best tips for getting a great deal on your new car.

13 Tips to Help You Purchase a New Vehicle!

  1. You should pay off your current car first
  2. Budget your money
  3. Never take the first offer
  4. Prepare Your Down Payment
  5. Get Your Financing Straight
  6. Fix Your Credit
  7. Add up all the costs
  8. Just Right
  9. Check Your Emotions
  10. Create a Competition
  11. Beware of Add-Ons
  12. Bring a Negotiator
  13. Just Walk Away

When should you buy a new car?

There are times when buying a car is more lucrative.

The best time to purchase a new vehicle is during the week, on holidays and near the end of a model year.

There’s more to getting a great deal on a car than just the date of purchase. You can get the best deals on a new vehicle by keeping these dates in mind, and following the tips listed below.

1. If you’re “upside down” with your current car, don’t even think about buying a new one.

What Does it Mean to be upside down?

You probably haven’t worked in the automobile industry if you’ve not heard of the term “upside-down”. Everybody who works in the car industry knows what it means.

A new car buyer owes money on the vehicle he currently owns.

“Steve”, for example, wants to purchase a new vehicle. He owes $13,000 for his current car, which is worth $10,000. He may not know the value of his car, but assume it is at least equal to what he owes.

It could be that he has no idea.

He visits a dealer hoping for the best and, lo and behold – that’s exactly what he receives. He gets what he wants, or at least the answer that he is hoping to hear. The dealer is telling him he can purchase a new car.

It may or may not be necessary to bring up the deficiency in the car loan. Steve’s car is clearly in debt, whether it shows up or not. This is how it will go…

The process continues after the dealer has assured Steve that he can indeed buy a new car.

It’s almost like the deficiency does not exist.

The dealer can do this by making the defect disappear. Steve clearly hasn’t paid for his new car. No problem. If he sells his car now, he will have a shortfall. There’s no problem either!

Steve is planning to purchase a car worth $30,000 with 100% financing. It’s not going to happen that way.

How car dealers “magically” make loan deficiencies disappear

The dealer will finance Steve’s $30,000 car at 100%. They will also add $3,000 to the loan for the deficiency of the old vehicle. Steve’s $30,000 car will come with a $33,000 mortgage when he drives it off the lot.

What happened? Dealer simply rolled over the deficiency of the old loan into the new one! Steve may or may not be aware of what’s going on.

He only knows that he got to drive off in the car of his dream. He’s still upside-down, but this time it’s on his new car.


It’s almost a way of life to be upside down in a car. You can’t help but get upside down in another car once you do it on the first one.

The deficiency usually gets bigger every time. Theoretically, you could be upside down for the rest of your life. A buyer who is upside down will always be at a disadvantage when negotiating with a dealer because they need to bail them out.

The moral of the story is that you can’t buy a new vehicle if your old one is upside down – regardless of what the dealer tells you.

2. Keep your budget in mind and know the value of the car you want to buy.

There are many online resources that can assist new car buyers.

Kelly Blue Book and Edmunds.com are two of the best sources. Both sites will give you reliable information on the new car values in your locality.

It’s more important to check the condition of used .

The value of a used car is based on a number of factors. These include the mileage, the age, the options, and the wear and tear. Before you begin to negotiate, you’ll want to know how much the car is worth.

This step will ensure that you are a well-informed buyer. You’ll be able to tell if the dealer or seller has tried to overcharge you if you know the approximate price of the car.

Do not assume that the dealer is looking out for your best interest.

He’s always trying to get the most money for his vehicles. It’s your job to ensure that he does not, or at least in your case.

Print out the price of the vehicle you are interested in buying. Use it as a tool for negotiating.

Recognized third-party documents are the best way to get car dealers to behave.

3. Do not accept the first offer.

It’s the same for your trade-in car. You’ll never know if the dealer is giving you a fair deal if you leave it up to them.

You’re unlikely to; car dealers are savvy and will take advantage of a weak hand.

Do not let this happen.

By knowing the value of your car, you can avoid the hassle. You can check the value of your car on Kelly Blue Book and Edmunds.com.

Be aware, however, that the valuation of used cars (which is what you will trade in) are subject to more subjective judgments.

The condition of the vehicle is an example where there are many gray areas. The dealer may say that your car is in fair or average condition.

Be as objective as you can when you visit the sites that offer car valuations. You can rate your car on each site, but be as honest as you can.

Ask the mechanic to evaluate the condition of your car – excellent or good, average or fair, or poor. The difference between each classification can be thousands of dollars.

You should be able to get an accurate value for your car if you are accurate when evaluating its condition.

Print the results again – if needed, from both sites – and have them ready to present to the dealer during price negotiations.

If you need to, you can even search local Craigslist for similar properties.

4. Even Better – Make your down payment BEFORE you visit the dealer


You’ll need to sell your car yourself if you don’t have enough cash to buy a new one.

You will get two benefits:

  1. The down payment barrier will be removed.
  2. You can trade in your vehicle without having to depend on the dealer.

You become a stronger purchaser by using #1. The dealer is in a worse position if you do #2. Although it may seem less convenient, selling your own vehicle is more important than you think. If you have to depend on the dealer to handle the trade-in/downpayment, the dealer will decide the amount.

Say you’ve done some research and found out that your car is worth $10,000. Your car has a $7,000 outstanding loan.

  1. You can get $3,000 to put down on a new car if you sell your car and pay off the loan.
  2. You may find that the dealer decides it is only worth $8,000 when you sell it. You’ll have only $1,000 left to spend on your next vehicle.

A larger loan will cover the difference, which will include a higher payment each month.

You owe yourself the right to try and sell your vehicle on your own.

You can also sell your car to another dealer in a separate transaction if you are in a rush. Carmax pays cash for cars that are sold this way.

You may have seen their TV commercials recently – the WBYCEIYDBO thing. They say “We’ll purchase your car, even if we don’t sell ours”.

It’s not as good as selling it yourself but you won’t have to sell your old vehicle and purchase your new one from the same dealer.

You have more control the less the dealer controls you.

5. It’s a good idea to have your financing arranged before you visit the dealer.

Why you should get approved first

You can use financing to your advantage.

Before going to a dealership, get pre-approval for a loan from your bank or credit card.

Shop around to find the best deals.

Four reasons are there for this.

  1. You will have a better bargaining position if you know your financing details before you enter the dealership.
  2. The dealer’s position is weakened as it removes another function from the sales process.
  3. This prevents them from forcing you to take out a subprime loan with a high rate of interest (increasing the profit they make on the deal).
  4. It also forces the dealer, if one is available, to offer you a better price than your bank.

How to get a loan for your new car

You can finance your new vehicle in many ways, including by shopping online or visiting your local credit union or bank.

LendingTree is a great service to help you compare all your options and find the best loan rates.

  • Quick Look
  • APRs as low as 3.09%
  • Competitive refinancing rates
  • Auto loans for bad credit – Accessible
  • Connect with multiple lenders in just minutes

Why you should avoid dealer financing

Be careful to not be tempted by low-rate dealer financing. The advertised rates are only “teaser rates” and available to customers who meet certain criteria.

The interest rate could be higher than what was promised if you are determined to be less. Dealerships often offer you the choice of a low-interest rate or a cashback offer.

You can lower the cost of the vehicle if you have already received a low-rate loan from your credit union or bank. It is usually in your best interest to accept the cash.

6. If you have credit problems, fix them!

What is the minimum credit score to buy a new car?

Credit scores are important when applying for a loan from a credit union or bank.

A FICO score of 650 or higher is required to qualify for a car loan.

If you don’t qualify, the dealership will likely arrange a subprime loan. You’ll probably get a subprime car loan from the dealership if you don’t qualify.

These loans are a favorite of car dealers. They make a lot money with them, as I said above. They are only too willing to put you in one.

If you are unable to get a loan from a bank, you will be in this situation.

Subprime auto loans are not only more expensive than loans from banks and credit unions, they’re much higher priced.

How to check your credit score

Checking your credit score will help you determine if you qualify for financing a new car and improve your score. You have several options when it comes to improving and finding your credit score.

Here are some of our best picks, based on your needs:

  • ExperianFree credit report from Experian is the best for basic credit checks. Click here to get your free credit report.
  • myFICO You can order and access reports from three major credit bureaus in order to get approved for an auto loan. Get your myFICO report today>>

What a bad credit score can do to a car loan

Real-Life Case Study: A young man, Ed, was in a position where he had to buy a car right away. He had to replace his car after it was damaged in an accident.

He had a score of about 500. He was refused a loan by any bank or credit union. The dealer was happy to offer financing. The dealer offered a $10,000 loan over 72 months for 22,99%!

The monthly payment came to about $265. He was also charged for a number of extras like a maintenance plan and gap insurance, both of which were told to be mandatory.

When you have a weak hand, the auto business will take advantage of it. Ed’s credit score increased by over 100 points 18 months after the initial loan. Then, he was able to refinance his loan with his credit union.

The balance had been paid to around $9,000. He got a loan for 36 months at 3.99%, which is 19 points less than the original subprime mortgage!

The monthly payment was around $265.

, he shaved 18 months off of the loan.

He saved almost $4,800 in total over the course of the loan (18 month x $265). This true story shows how important it is to fix your credit score before purchasing a vehicle.

If you cannot do this in advance, then do it as quickly as you can after purchasing the vehicle. Subprime auto loans are not only incredibly high in interest rates, they also lock you into the loan for a longer period than the car will last.

Did I mention that the 72-month car loan was for a used ?

7. Consider ALL costs! Not just the sticker price!


Don’t focus solely on the price when you buy a new vehicle.

It’s not the real price.

The final price of a vehicle is determined by a number of additional fees.

Additional costs include:

  • State Sales Tax– If you live in a state that has a sales taxes, and it is applied to motor vehicle purchases, it could have a significant impact on the price of your car. If you live in a State with a Sales Tax of 7% and purchase a $30,000 car, the sales tax will be $2,100. Some states add on municipal and county sales taxes.
  • Document Fees – These are simply extra fees that the dealer adds to the purchase price. These fees can be referred to by many different names. These fees are limited in some states, but not all. They can add hundreds of dollars to the purchase price, depending on where they are imposed.
  • DMV Fees All states charge these fees. State-specific fees can include registration fees or title transfer fees. Illinois, for example, charges between $101 to $114 as registration fees, plus $95 as title fees.

Here’s a quick example to show how these fees impact the final price of the purchase:

New Car Purchase Price: $30,000.
State sales tax (6%): $1,800
Document Fees: $500
DMV Fees: $300
Final sale price: $32,600

You can see that the additional fees raise the price of the vehicle by almost 9%, or $2,600. This is just an estimate. In some states, it may be lower. In others, it could be higher.

Don’t Forget About Insurance

Do not forget to include car insurance in your calculations. Insuring your car should be treated with the same care as financing it.

Find the best insurance quote for your vehicle.

Back To Top