How to Save Money on a New Car Purchase

Recent new car sales numbers have shown the auto industry is in a rebound. Even with the recession still hitting many people hard it seems some people still need to buy new cars.  The rise in consumer confidence may have triggered this growth in new car sales, which is good sign for the economy.

It is important to remember that when purchasing a car one’s own financial situation remain the most important consideration. Even if you are able to buy a brand new vehicle, it is important to be frugal and strive to strike the best possible deal whatever your financial situation.

Saving Money on your New Car Purchase: 3 Tips for Success

With this in mind, what practical steps can you take to shop frugally and make an affordable new car purchase? Consider the following: –

  1. Choose your Buying Resources Wisely: If you are motivated by finding an affordable new car, then dealerships should not be your source of information. Instead, you should visit online resources such as Exchange and Mart or Consumer Reports to access a wide range of vehicle information across a range of brands.  In addition to this, it is also easy for you to offer your existing car as a trade-in on the new model, which can drastically reduce the cost on your new car purchase.  Keep in mind dealerships make my money on used cars than new cars so be careful how they structural the deals. 
  2. Pay Attention to Financing Plans and Agreements: When buying a brand new car, the majority of consumers are forced to pay with a fixed financing agreement which may not be their best financial choice. While this spreads the cost of the car over an agreed period of time, you need to be able to commit to making regular payments. Failure to do this will trigger late payment fees and headaches. You should find a good car loan rate through a local bank or credit union. In addition to this, be sure to read the financing terms in full and review these carefully to make sure there are no hidden catches that will come back to bite you later.
  3. Choose a Medium or Low Trim model for you New Car: There are numerous Trim levels on certain car models, which cater towards a range of budgets and expectations. While each Trim is going to offer different features, there won't be that much difference in the overall car. Buying a car with all the “bell and whistles” won't necessarily keep the value if the car or automaker doesn't have a good reliability rating and depreciation outlook. It's best to choose a lower Trim model and pay a little more fore certain features you want without going over you budget on a car that is not that different.

5 Things to Change on Your Car

It’s a great feeling to drive home in a new-used car. There are some aspects of preparing your new (to you) car for life on the road though. Even if you found a perfect car that fits you well, there are 5 things you should try and change as soon as possible.

  1. Factory and OEM clone air filters work, just not as good as they could do. If you spend a few dollars and buy a good quality air filter like a K&N filter (there are a good number of similar-quality brands on the market if you prefer the companies that supply those) then you will subsequently increase mileage, horsepower, and overall performance. Though good air filters are not cheap, it will still be a good investment in the long run (the mileage savings should neutralize the initial cost of the filter and added power is always a welcome improvement to any car enthusiast) Most high end filters are washable, too, so it should be a one-time investment.
  2. If you purchased a used car and you don’t have documentation of when spark plugs were changed last, then change them. Use a quality platinum or iridium plug for a hot, cleaner burning spark. Many people change new car plugs simply because some manufactures still insist on using a lower grade plug to keep their costs down. Much like the air filter, this can add a bit of extra time before a fill-up is needed, as well as giving better performance and horsepower as well.
  3. If the car is not currently under factory warranty research tuner chips for your make and model. The (typically easy to change) computer chips can make a big difference in performance. If this is a totally new area for you do some research on Car Performance Chips – just have a play around with Google and spend a bit of time getting a good overview of the topic, as it’s quite an in-depth one. A bit of research goes a long way though, and an afternoon reading good quality information sources (cross-reference where you find information out from using other sources to give yourself a better chance of weeding out unreliable information) can pay big dividends.
  4. Get rid of the space saver spare tire that the car is most likely equipped with. Get a tire correctly suited to the road conditions you’ll be driving on most often. If you read the limitations on the space saver spare you’ll find they are designed for short distances and low speeds. In any case, you will probably need to replace the tire if you get a flat at highway speeds anyway so there is no money saving involved if you wait until it happens. Finally, think about snow tires or chains-in the event of heavy snow they can make a large difference to the grip the tires can generate.
  5. Get rid of the cheap scissor or bumper jack that came in your car. Whether just for emergency use or for use when doing your own maintenance at home a quality jack like this 2 tonne bottle jack will be easier and safer to use.

5 Car Insurance Myths Debunked

car insurance myths

There is a lot of misleading information out there about car insurance that gets repeated so often people believe it to be true.  However, most of these so called car insurance myths neglect vital facts and more importantly facts that could save you money.  Since these misconceptions often influence what a person buys and drives for a car, which is a big decision, taking a closer look at car insurance myths is a good idea.

5 Car Insurance Myths Debunked

  1. Both New and relatively New Cars cost more to insure: While this is generally true as cars depreciate in value over time, there are many factors involved in determining rates for auto insurance for a given make or model and the replacement cost of a vehicle is a relatively small piece of that.  Better safety features and a steady insurance track record can potentially result in a new car having a lower rate than your current vehicle.  Living in a saving neighborhood with lower crime can also drastically lower car insurance rates. 
  2. The color of the car changes insurance rates: The truth is your insurance company does not know what color your car is and probably doesn't care.  They don’t ask and no, the VIN (Vehicle Identification Number) does not indicate a color. Bright red or plain white, if the same make, model and driver are involved the same rate will result for insurance.
  3. Sports cars get more speeding tickets and will make rates go up: Not true, 9 of the top 10 models in terms of speeding tickets are non-performance vehicles. Insurers are interested in how many speeding tickets you have, not how many a type of car might get. Rates for sports cars are higher based on horsepower and insurance claims records, not the likelihood of picking up a ticket.
  4. Tickets in other states do not change insurance: Not only do insurance companies regularly find these tickets, but if they find them after the event has occurred you may be dropped from coverage completely or they may refuse to pay a claim as it was a fraudulently obtained policy. It is expensive regardless so make sure your insurance will pay if a claim needs to be filed by being above board to start with.  
  5. Full or comprehensive coverage insurance means they pay for everything: Full coverage insurance is a loosely defined term to mean both liability coverage and loss coverage. With comprehensive coverage damage to your car in an accident, theft, and fire are typically covered. Glass coverage, towing and rental coverage, theft of property in the vehicle, etc. are areas that may or may not be included. To compare policies and premiums you need to look at each of these things, not simply request a quote for full or comprehensive coverage as that definition can be very different from one policy to another.  

Policy limits also exist in every policy so even if the same things are covered but one insures for a total of $10,000 medical coverage (a 3 day stay or less sometimes in a hospital) and the other for $100,000 then the rates are different and rightly so. Often super cheap policies are dropping all coverage to the minimum legal amounts for a state. Saving $30 every 6 months is not a bargain at the risk $90,000 in medical bills if the situation would warrant the latter.

Most full service insurance agents will happily take the time to go over different options available to you in car insurance from ways to cut the cost down to ways maximize protection in the areas of coverage you need. AXA is an example of a website that allows you to tailor a policy online and then have an actual agent review the policy to address any questions. Many online insurance companies now will allow you to print all the policy details to compare accurately. Doing the investigation before shopping for your new car or used car can save you a lot of frustration with car insurance down the road,  Literally and figuratively speaking.  

The DOs and DON’Ts of Car Financing

Maserati GranCabrio
Car Financing for a Maserati!

Bad Credit Score Doesn’t Have to Stand Between You and Your Dream Car 

There is no better feeling than having a hot new car, ready to ride in your very own garage. However, with car prices still high, and the economy still in bad shape achieving the goal of new car ownership is not very wallet-friendly. On the other hand, when you set your mind on your new must-have vehicle, you don’t have to stop pursuing it just because of the price tag or your credit score.  With some knowledge about car financing, you can have your car on your driveway while staying well within your financial limits.

DOs and DON’Ts of Car Financing

Car financing is the art of purchasing a car by borrowing money from banks or other sources. It is the ultimate solution that demolishes the distance between your garage and your new car. It grants you the purchasing capacity even in a very tight budget

To gain the freedom to buy the car of your desire, there are several DO’s and DON’Ts that you have to keep strictly in mind before and throughout the whole process of car financing as they will enable you to get the best car finance rates even with a with a bad credit history.

  • Do Research the Amount of Money to be BorrowedBefore applying for car finance, do some homework and determine the exact amount that you will require. It will enable you to determine the additional costs that the dealer is imposing in the form of hidden interest rates and additional costs at the time of car financing.
  • Do Pre-determination of the Loan Repayment Schedule Make a draft schedule for repayment, be precise about the schedule and the total time period of the loan. Keeping in mind your desired repayment time period will play a significant role in selecting the best plan during the car financing process.
  • Do Know Your Budget and Stay Within its Limits Always be within your budget limits, exceeding the budget limit will throw a curse of bad credit score on you. For avoiding this tremendous curse, pre-determine the budget precisely and choose the car within its limits.
  • Do Find Out Your Credit ScoreThere are numerous credit score calculators online; use them and find out your credit score. Your credit score history will be researched thoroughly during the whole process, and it is very good to know the facts upfront.
  • Do some simulations and prepare possible scenarios It is not as technical as it sounds. All you need to do is to jump on the car finance calculator and input the amounts related to your car loan, such as car’s price, desired interest rates, and down payment, and find out the simulated results. It will give you a taste of the general loan amount that you will have to pay per month for the specified car.

The above DOs will greatly broaden your with regard to car finance, but in order to make your purchase as smooth as possible, there are DON’Ts to be kept in mind, as well.

  • Don’t Disclose Your Monthly Payment Capacity The dealer would try every sugar-coated tactic to make you disclose your monthly payment capacity, but at this point you need to be focused on the total amount of the loan and then afterwards determining the monthly payment schedule. If you somehow disclose your monthly payment capacity, there is a greater possibility that you will lose your chance of getting a lower purchase price at lower interest rates.
  • Don’t Let the Dealer Determine Your Credit ScoreBefore approaching the dealer, you should know your credit score (as mentioned earlier in the “DOs” section of this sheet). If you don’t know your credit score, the dealer can tell you almost anything, and you would have to believe them, and proceed with the loan according to the credit score provided.
  • Don’t Go for the Most Expensive CarNever exceed the limits of your budget, always remain within it. However, if you choose to do so, it will only result in rolling the negative equity forward to your upcoming deals or it might even downgrade your credit score. Negative equity means the difference between the amount you own to the borrower for the car and the car’s total price.
  • Don’t Accept to Finance Additional Options for Your CarYou generally don't need the add-ons, such as extended warranties, fabric protection, rust protection.  Most new cars come with these things nowadays anyway. Simply refuse to get or finance the add-ons, when the dealer offers to add them to your existing borrowing amount; you will save yourself a significant amount of money.

Along with all the above mentioned DOs and DON’TS, there is a common fear related to bad credit score that exists among many borrowers. However, there is no need for that fear to get between you and your dream car, because you can get car loans with a bad credit history from many sources easily. All you need to do is to stay calm during the complete process of car financing and thoroughly follow the tips provided. As a result, you can drive your dream car into the New Year with the best car finance rates and without the hazards of car financing.