When it comes to buying a used car, saving money isn’t just about sticker price. It’s about choosing the right car financing, doing thorough research, and factoring in ownership costs so you can keep more money in your pocket – at the time of purchase and throughout ownership. Here are six practical ways to save while still getting a vehicle that fits your needs.
1. Secure the right financing before you shop
With living expenses on the rise, adding a car payment to your monthly bills can easily strain your household budget. That’s why it’s important to figure out how much car you can afford before you start shopping. One of the best ways to do that is to get preapproved for an auto loan.
Preapproval usually comes from a bank, credit union, or online lender before you step on a lot. It gives you the maximum amount you can borrow plus an estimate of the interest rate and term, so you know your true spending limit.
That’s different from dealer financing. A dealer typically sends your information to multiple lenders after you’ve chosen a car. Some may call this “preapproval,” but it’s actually prequalification, so the loan amount and terms aren’t locked in the way they are with a bank’s preapproval.
Getting preapproved also gives you more negotiating power. When you walk in with a loan lined up and a set ceiling, you’re less likely to be upsold on a more expensive car or add-ons you don’t need.
2. Research fair prices and vehicle history
Supply and demand, dealer markups, even a car’s popularity can affect sticker prices. Before you head to the lot, use tools like Kelley Blue Book, Edmunds, or the National Automobile Dealers Association to check fair market value for the make and model you’re considering. Comparing multiple listings helps you spot inflated prices, avoid “too good to be true” deals, and strengthen your negotiating position.
But sticker price is only half the story. The other half is found in a vehicle history report, which can reveal important details about a specific car, including:
- Number of previous owners.
- Mileage.
- Major accidents reported to insurers.
- Maintenance records.
Vehicle history reports aren’t free, but you can find approved providers through the National Motor Vehicle Title Information System, a government database. The small upfront cost may save you from buying a car with hidden problems and unexpected expenses down the road.
3. Shop at the right places – and at the right times
Most used-car buyers usually end up at one of two places: a dealership or a private seller.
Private sellers often list cars at lower prices, but the trade-off is risk. These sales are typically considered “as-is,” so you have limited recourse if problems pop up once you own the vehicle. Dealerships tend to be more expensive but offer certified pre-owned cars with warranties.
You can sometimes offset the higher cost of buying from a dealer by shopping at the right time. Discounts may be more available at the end of the month or year when salespeople are trying to hit their quotas.
Where you shop matters, too. For example, you might find better deals on compact, fuel-efficient cars if you look for them in rural areas where trucks and SUVs are more popular.
4. Evaluate total ownership costs
Monthly car payments are only a fraction of what it costs to own a car. Other major expenses to consider include:
- Insurance premiums.
- Fuel.
- Registration and taxes.
- Maintenance and repairs.
You want to weigh each of these factors before committing to a car. For instance, stretching your budget to buy a newer model might not seem like a big deal – until you see your insurance bill. But if that new model is also more fuel efficient, then it could save you hundreds of dollars in gas, especially if you have a long commute.
Perhaps the biggest concern when buying a used car – and the hardest to predict – is maintenance. Some vehicles are known for reliability and inexpensive parts, while others are notorious for costly repairs. Before you buy, check reviews, reliability ratings, and average repair costs so you don’t end up with unexpected expenses.
- Negotiate with confidence
Negotiating is expected when buying a used car, but it makes many people uncomfortable. The good news is you don’t have to be aggressive to get a fair deal. These tips can help:
- Research first so you have a target price. Knowing your maximum price and the fair market value gives you a reasonable starting point.
- Be calm and respectful. A cooperative tone often works better than a confrontational one.
- Focus on the total price. Don’t get distracted by “low” monthly payments that hide high interest rates or long loan terms. Ask for the total cost, including taxes and fees.
- Be ready to walk away. A dealer may reconsider their position rather than lose a sale.
Every dollar you save when negotiating does more than lower the purchase price. It may also reduce sales tax, lower insurance premiums, and save you from paying interest on a higher loan amount. In short, a little confidence at the table can save you thousands over the life of the car.
6. Skip extras you don’t need
Once you’ve agreed on a price, the dealership may introduce a new set of “optional” add-ons, like extended warranties, paint protection, fabric sealants, gap insurance, or prepaid service packages. These are often offered while you’re finalizing paperwork, sometimes with the pressure that the “deal is only available today.”
The problem? Most of these extras are overpriced when purchased through the dealer.
For example, extended warranties from the dealer can cost thousands more than third-party options, and gap insurance is usually much cheaper through your auto insurer. If you roll add-ons into your financing, you’ll also pay interest on them, adding potentially thousands of dollars to your costs over the life of your loan.
Instead, focus on what you really need, such as
- Routine maintenance. Budget for oil changes, brakes, and tires rather than a bundled service plan.
- Insurance coverage. Ask your insurer about gap coverage before accepting it at the dealership.
- Repairs and protection. Independent mechanics or specialty shops often provide the same services for a fraction of the cost.
By saying no to unnecessary extras, you keep your financing simple and your costs lower, while still setting aside money for genuine maintenance and potential future repairs.
Get on the road to a good deal
Used-car shopping is all about long-term thinking. With a little bit of preparation and research, you can drive off the lot knowing you’ve made a choice that maximizes your money’s value.
Sources
https://www.nerdwallet.com/article/loans/auto-loans/vehicle-history-reports-key-cars-past
https://cars.usnews.com/cars-trucks/advice/things-that-will-save-you-money-on-a-used-car
https://www.bestdealautogroup.com/blog/tips-negotiating-best-deal-used-car-dealership
