I was gifted a car in high school and loved not having a car payment. Being a saver, I drove it until it was well over 10 years old. Unfortunately, it started showing signs that it wasn't going to last much longer, so my husband and I made a plan. He took over my old car to save on gas, and I would get a "new" one. If we paid off my car within the first year, we would work our plan again and he would get a new truck the following year. Paying off two automobiles in two years was a daunting task, but we pulled through with flying colors!

Start Planning

Consider when you'll buy and where you'll get the money. Allow at least a six-month head start to maximize extra cash like tax returns, birthday money, Christmas money, and even scholarships.

When to Buy

Aside from Black Friday, experts say the best time to expect to a great deal is New Year’s Eve.

Ultimately, November and December are the best months to buy because most dealerships need to clear out their inventory for the new models.

Make A Budget

Take a hard look at finances to narrow down choices and limit the temptation to buy something unrealistic.

We knew we could set aside almost $10,000 by the time we were ready to buy. We knew it wouldn't be enough to get a car as new as we wanted, so we agreed to finance the rest. We set a strict limit of $4,000 (bringing our total to $14,000).

Consider financing options (if you need it). Credit Unions are notorious for giving better interest rates than banks. If that isn't an option, shop around to find the lowest interest rate. Tell potential lenders whether you plan to buy a new or used car; getting approved for a loan on a used car is significantly harder than approval for a new one.

Needs Versus Wants

Know the family’s minimum needs. We have a toddler and I'm a full-time student, and I drive about 70 miles every day. I needed a car that was safe, roomy, good on gas, and had low miles. Extras like leather seats and sunroofs were nice, but they weren't essential for my daily routine.

Luxury options can add $1,000 or more to the price.

Set an Age Limit

The idea is to find a car that will last as long as possible to get the most for your money. We set a rule that the car couldn't be older than three years. Setting an age limit reduced our choices significantly and saved us even more time. Older cars are more likely to have mechanical issues and more miles.

Do Your Research

Check websites like Consumer Reports for car rankings and Autotrader for price comparisons.

Expand Your Search

I looked at cars within a 300 mile radius. Ultimately, we found a car that was 60 miles away, but we saved over $2,000 by making the trip.

Window Shop

I can't stress this step enough, simply because people change their minds so often. Even if you aren’t ready to buy, go to a dealership and drive cars to get practice for the actual purchase and to learn about dealers. I went into a dealership with no intention of purchasing and test drove cars that I thought I'd like. I learned I hated the car I'd been swooning over for three months and discovered which dealers were money hungry and which were honest.

Make a Deal

It never hurts to make an offer. Be reasonable, but your goal is to pay as little money as possible. Make sure you know prices for similar cars before negotiating. Using a site called TrueCar, enter a car make and model, and it will tell you if the price you're considering paying is great, average, or too high.

Stick with your plan. Don't settle for anything else unless you have all the information and research on hand. Most dealers will show a variety of cars to give options, but don’t get distracted. You may like the car, the price, and the way it feels, but unless you've researched a backup car, you'll flush all your research down the drain.

Warning: Warranties

Extended warranties are tempting. But never purchase an extended warranty at the dealership. Just like with your car, you need to shop around. And if you've followed the previous steps, you should have an idea of how the car will run. You can always buy a warranty on a different day, and almost all contracts between dealerships and customers have a return period should anything happen. Most of the time it's small (around a week), but it is long enough to discover any serious problems with the car and give you time to see if it’s worth it to buy a warranty.


How to Get the Best Deal When Car Shopping