How to Drive the Best Deal on Your Next Car?

By Catherine Powell

Image courtesy pexels

Other than a rent or mortgage payment, the single biggest monthly installment most folks make every month is their car payment.  Since many new and some used vehicles cost about as much as houses did a couple decades ago, I thought it was high time I took the time to show you how to drive the best deal on your next set of wheels. 

Why are new cars so expensive?

If used to be that cars, vans and pickup trucks were simply a means of locomotion.  They were designed to get you from Point A to B.  Then came the computer revolution.  Nowadays, not only are cars crammed full of integrated circuits that control everything from the firing of an engine’s spark plugs to the throttle and steering, but most every car now comes equipped with a touchscreen embedded in the dashboard that wirelessly connects you to your phone and the world outside the vehicle.  It’s the computerization of cars that has suddenly caused the costs of owning a new car to skyrocket.

According to Cars.com, the average price of a new car in 2020 is nearly $35,000.  That’s nearly three times what it was in 1990 and more than twice what it was in 2000.  What’s even worse is that the cost to maintain these vehicles once the warranty runs out is also high.  That’s because unlike in the 90’s, today’s hi-tech vehicles are nearly impossible to work on by yourself. The days of tinkering under the hood are all but over.  Heck, it’s hard to see the engine when you pop the hood today.  That means you not only need to shop for a reliable set of wheels, you need to also shop around to find the models that have the best reliability and warranty if you don’t want to wind up burning an unexpected hole in your wallet somewhere down the road.

Doing your homework can save you a bundle.

Image courtesy pikrepo

While buying a car is a big step, your first step should be to do your homework.  That translates to surfing the web.  The Internet contains a wealth of information on every type, make and model of vehicle out there.  Not only can you find out which makes and models give you the best value, warranty and gas mileage, but you can find out from other drivers what they really thought about any vehicle you’ve got your heart set on.  That’s the other piece of advice you need to take when it comes to buying a new or used car.  Think with your head, not with your heart.  Just because a vehicle looks good doesn’t mean it will deliver value over the long haul.  Unless you intend to keep a car for 5-years or less, you need to factor in reliability and maintenance into the equation. 

New or Used?

While new cars are appealing, they tend to lose their value quickly.  Did you know a new car typically loses 10% of its value after the first month you drive it off the lot?  That’s according to Carfax.com.  They also point out that a vehicle loses 20% of its value after the first 12 months, then 10% per year for the next four years.  The way to capitalize on the depreciation bell curve is to buy a used vehicle that is in like-new condition with low mileage. That means if you want to get a bigger bang for your automotive buck, you should think of looking at vehicles that are 2-3 years old with less than 36,000 miles on them.  One of the best ways to do this is to purchase vehicles that have just come off their lease.  Not only do they typically have 36,000 miles or less on the odometer, but they have plenty of mileage left on the warranty.  Plus, if you crave a car that’s loaded with option but don’t want to pay retail for them, buying used is the way to go. 

What are all those bells and whistles really worth?

All too many consumers are sucked in by options that do little to increase the value of their vehicle.  While options like leather seats and in-dash GPS systems are hot ticket items, you can buy leather seat covers for a lot less and as long as your new set of wheels comes equipped with a USB port, Google’s Android Auto app can plug talking GPS, hands-free talk and text, Pandora music, and much more into the vehicle for free.  If you covet those in-seat entertainment systems for the kids, it’s far cheaper to spend $100 for a 10-inch headrest mounted monitor with headphones than to spend $1,000 or more to upgrade your ride at the factory.

The Ins and Outs of Trade-Ins

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Another place where many consumers get taken to the cleaner is when they agree to a trade-in.  This almost always costs the consumer big money.  If you don’t believe me, go to Kelly Blue Book https://www.kbb and enter your existing car into their free analysis program.  Then click on the tabs marked Trade-In Value and Private Party Value to compare the difference.  Depending on the miles and condition of your current ride, you could be surprised to find that the difference between trading and selling can be $1,000 or more.  That seems kind of steep when you can post a for sale sign on your car or an ad on craigslist for free.  The other reason all too many consumers wind up trading in their vehicles is because they wait until their ride is falling apart before they sell it.  That’s another big mistake.  When I sold my 2008 Toyota Camry five years ago, I pocketed more than $5,000 instead of taking the $3,300 trade-in offer from the dealer.  You do the math.

When is the Best Time to Buy?

Since auto dealerships are sales organizations, this means they have quotas to meet.  Not only does this sometimes translate into high pressure sales tactics used by dealers, it also guarantees high pressure being put on the sales staff to make the monthly quota.  This tidbit can also put car buyers in the driver seat when it comes to driving a hard bargain.  Especially if you shop for a vehicle at the end of the month or the end of the year.  Here are a few other tactics that can be used to get the best deal on the best wheels:

      1.      Ask to see a demo – Car dealers like to drive flashy cars too.  That’s why most dealerships offer demos to some of their staff.  While a demo is a coveted perk for sales managers, it can also present a bargain for savvy buyers since a dealership can’t sell a demo as a new car, even though they typically have less than 5,000 miles on the odometer.

      2.      Buy last year’s models as soon as this year’s arrive.  Leaves aren’t the only thing that fall from the trees in autumn.  So do new car prices.  When the new models arrive from the factory in the fall and the dealer fails to move last year’s inventory, dealers are motivated to sell “last year’s” models, which are still brand spanking new for less.

      3.      Don’t get sucked into buying extended warranties or pre-paid maintenance packages from the dealer.  Just because you drove a hard bargain to put yourself behind the wheel, don’t think a dealer can’t wheel and deal to put more money in his or her pocket before you drive the car off the lot.  If you’ve purchased a vehicle with a 5 or 10-year bumper-to-bumper warranty, paying in advance for an extended warranty or maintenance package is like throwing money out the window as you roll off the lot. 

      4.      Buying from a private owner instead of a dealer is another way to get more a bigger bang for your buck.  Just make sure you get a Carfax report to make sure that the used car you’re considering wasn’t involved in an accident or sunk in a flood.  Also make doubly sure you do a title search and take any used vehicle to your friendly, neighborhood mechanic for an inspection before you wind up driving away with a lemon.  

Catherine Powell is the owner of A Plus All Florida, Insurance in Orange Park, Florida.  To find out more ways to save on flood insurance, check out her website at http://aplusallfloridainsuranceinc.com/