1. Decide how much you can afford. If you need a car loan, some simple financial calculations will help you narrow down a realistic price range and repayment schedule. It doesn’t hurt to visit your bank or lender to discuss loan options that fit your means and budget.
2. Shop around. If you have time (and patience), you can save money. Look at all the models you are considering by visiting dealerships. You may find a nearly new (pre-registered) car or outgoing model, which can cost considerably less. Just check when the warranty expires.
3. Take a test drive. How else will you know if the car is good to drive and fits your needs? Ask the dealer to provide a model with the engine and transmission that you’re interested in, as some dealers will put customers into higher spec versions to tempt them into buying more expensive models.
4. Haggle! Never pay the full list price on a new vehicle. You should be able to get the price down by 5 to 15 percent, especially during the quieter months of August and December. If the dealer won’t budge, simply walk away.
5. Compare the trade-in offers. If you currently own an old car, talk to dealers and compare their “cost to switch” deals. Be careful that dealers don’t inflate the trade-in price of your old car, as well as charge more for the new model. It may be helpful to know the approximate valuation of your old car before you begin any negotiations.
Following an agreement on the price, you are ready for the next big step: weighing your financing options.