7 Ways to Choose a Car for the Best Value

Choosing a car that gives you the most bang for your buck requires more than just searching for the lowest sticker price. Yes, your budget is very important since a car is such a major financial investment, but there are many more factors to take into consideration before you shell out the cash on the first car deal that comes your way. Here are 7 ways to get the best deal on a new car:

1. Start with your list of must-haves

Is functionality a priority over fun? Does luxury take a back seat to performance? What safety features are you looking for? How much space do you need? What about interior features? These are all important factors to take into consideration when determining which car is right for you and your needs. But be sure that the features you consider “must-haves” are worth the extra cost.

2. Estimate long-term ownership costs

You probably have a rough idea of how much you can afford to spend on a car — and how much of a monthly payment you’re comfortable with. But the long-term costs of ownership are equally as important as the upfront costs. Some cars are more expensive to maintain and repair than others. Some cars carry higher insurance premiums. And some depreciate in value faster. All of these can result in more out-of-pocket money for you down the line. Do your research on sites like Consumer Reports to make sure the car you have your eye on is one that also carries a reasonable long-term cost of ownership.

3. Decide if buying or leasing is the better option for you

Leasing a car means that you will use the vehicle for a few years, then turn it in at the appointed time. Leasing tends to offer lower monthly payments and little-to-no maintenance and repair bills for you. But keep in mind that once your lease is up, you may be faced with mileage penalties if you go over the set limit, and you will have to search for a new car (or extend your lease). When you buy a car, on the other hand, you own your vehicle once you have paid it off — and you could eventually resell it for a profit later.

4. Shop around

Hop online and get a feel for what’s out there. Most dealerships list their entire inventory on their websites or on popular car-buying sites. If there are a few cars that catch your eye, contact the internet sales managers for each to make sure the vehicles are still available, and request quotes from each one. Once you narrow it down to a few options, schedule your test drives. Compare the pros and cons, features and feel of each vehicle. Then, it’s time to start negotiations.

• How do I get the best deal on a new car? Your greatest advantage in getting the best car deal comes from doing your homework. A buyer who already knows exactly what they’re looking for and what price they’re willing to pay is a buyer who is more likely to drive away with the car and terms they came for. Check reputable sites like Kelley Blue Book for reasonable price ranges for the car(s) and features you’ve got in mind.

5. Ask dealers to beat your lowest quote

Use the multiple quotes you requested online as your negotiating tool. Take your lowest price and let other dealers know that if they can beat it, you’re ready to buy right now. That’s a highly motivating incentive.

• How much will a dealership come down on price on a new car? The manufacturer’s suggested retail price does not have to be the starting point for negotiations. It’s smart to start with the lowest quote you’ve received and work up from there.

• How do you haggle with a car dealer? Remember, you can negotiate your interest rate, trade-in and other extras in addition to the sticker price. A little back-and-forth on those could result in a lower overall price for you.

6. Pay with cash

Coming to the table with money in hand gives you leverage and helps you negotiate with confidence. If you don’t have the cash needed to purchase the car, consider securing your financing ahead of time from a bank, credit union or personal loan company. This gives you the power of walking into a dealership in complete control with funds ready to go. Just be sure to shop for the best rates and terms from multiple financial institutions.

7. Beware of add-ons

Extended warranties sound like a good idea as you’re nearing the end of the car buying process. After all, you’re spending a lot of money. You should protect yourself. But beware. This is where dealerships will attempt to add on all the extras at the end, to drive up the price you’ve already agreed to.

Be an informed car shopper

Getting the best deal on a new car starts with you. You can save hundreds or even thousands on your car deal — and drive away with the price, terms and features you want — through competitive price shopping, smart negotiating and holding your ground.