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10 Secrets of Saving Money on Your Next Car Purchase

Saving Money on Your Next Car Purchase
CC Photo Courtesy of John Lloyd via Flickr

“The car buyers who are happiest with their car-buying experience usually paid the most profit.”
–A rule of thumb quoted by professional car sales people (

I don’t know about you, but I would be much happier if I knew that I saved a little money during the car-buying experience. Unfortunately, there is probably a lot of truth to the “rule of thumb” quoted above. Once the emotion of the new-car experience takes over, everything gets rationalized and common sense takes a backseat. So to keep your common sense in the driver’s seat, here are 10 secrets of saving money on your next car purchase.

Car Purchase Secret #1     Stay away from the dealership until you make a few personal commitments.

I admit it. I have made some bad car-buying decisions in my lifetime. Typically they occurred when I was younger and I would just “stop by” a car dealership to “look.” One good, convincing salesperson later and I was driving off the lot in a brand new car. Before you step into a dealership, you have to get your game face on.

First, acknowledge that you are only human and prone to making emotional buying decisions. You are less likely to overpay for a car if you acknowledge your tendencies. It helps you stay rational. Second, promise yourself you will not buy a car until you have utilized the advantage from Car Purchase Secret #2 …

Car Purchase Secret #2     Do your homework.

It is important to have an idea of the fair value of the car that you want to purchase. Go to a site like, find similar models all over the country and get an idea of the asking value of these cars. This comparison gives you a reasonable price range of what your car is selling for all over the country. Read as many consumer reports and articles on test drives of the particular model you would like to buy. This research gives you a lot of inside information about what to look for and what to avoid.

Car Purchase Secret #3     Check the Carfax.

The Carfax tells you if the car has been in a wreck or possibly has anything wrong with it. Most dealerships make this available on their websites. However, there is another important piece of information: In most cases, you can tell when the dealership listed the car for sale. Dealers are more motivated to sell a car that has sat on the lot longer than one they just listed.

Car Purchase Secret #4     Get pre-approved for the loan before you start the process.

In the majority of cases, you are not going to get the best interest rate on a car loan by applying in the business office of a dealership. A lot of people make money off of the interest rate, and that does nothing but increase the overall rate. That 1 to 2 percent additional interest tacked on the real rate adds up over time. A friend of mine had perfect credit, and the best he could get was 3.5 percent. He went to and refinanced the car for 1.9 percent.

Car Purchase Secret #5     Be careful with the warranties.

By the time you leave the business office, you could have purchased $2,000 worth of warranties and extra services from LoJack, to extended warranties, to tires and wheel protection. I have found that these warranties are rarely worth the cost. Think through it very carefully before giving in to a convincing sales pitch. When you first buy a car, you are very vulnerable to these sale pitches because you have good intentions of doing everything possible to take care of that new car.

Car Purchase Secret #6     Buy a car that is 1 or 2 years old with low mileage.

Buying a brand-new car off of the showroom floor is real tempting. However, the value of that car will drop as you drive off of the showroom floor. Let someone else take that depreciation hit. This especially works great in the event that the manufacturer changes the model. A model change really can hurt the price of the older model. Cars that have been used as loaners can be a great deal and save you thousands.

Car Purchase Secret #7     The best time to buy is at the end of the month and at the end of the year.

Dealerships have sales quotas. Oftentimes, they make it to the end of the month short of their quotas. I once bought a car on the last day of the month and started the process at 6 pm. I saved thousands. They were clearly motivated to make their numbers. This also applies to annual quotas, making the end of the year a great time to buy a car.

Car Purchase Secret #8     Treat your trade-in separate from the purchase price of the new car.

Just like you would do in Secret #2, research the fair value of your trade in. You can also get a quote on just by inputting your information. Obviously, you will get a low-ball number. However, that will give you a bottom number for the range. Then you can go to and get trade-in values for your car. Remember you are negotiating two different values—trade-in and purchase price.

Car Purchase Secret #9     Make it a process, talk to several dealerships, and SLOW DOWN.

It is easy to speed through the process, letting emotion take over. Take your time and start the process with more than one dealership. Why wouldn’t you have two or more dealerships compete for your business?

OK, those are 9 secrets, and we can stop on 9. My last piece of advice is too big to call a secret or to name it number ten. It is the most important part of the process.


Don’t forget that God wants to be involved in EVERYTHING. Pray that God will guide you and give you peace about a decision. Don’t make that purchase without God’s peace. It is tough to go wrong when you have gone through a thorough research process and have held back until you felt God’s peace. Also, commit to God’s timing on the purchase, rather than giving in to immediate gratification.

   “The car buyers who are the happiest with their car-buying experience usually paid the most profit.”

That rule of thumb makes no sense and is not a rule of thumb that applies to prudent stewards. Now that you have the secrets, be just as happy buying your next car not just because of the car itself … but also because you saved money!

About Bob Brooks

Bob Brooks is a 21-year veteran of the financial services business and is president of Prudent Money Financial Services. Since 2002, Bob has hosted the daily financial talk show, "The Prudent Money Show." Bob is also the author of the book, "Deceptive Money." His passion is teaching people, from a Christian perspective, what they need to know to solve financial problems and get informed. By presenting the other side of the story, Bob helps listeners and readers become better stewards of their finances.
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