New car prices continue to rise with the average cost of a new ride costing about $30,000. That is quite a lot of money for a purchase that will lose value the moment you leave the dealer lot and continue to slide for many years to come.
Few of us can do without a car which means finding ways to have a vehicle we want or need, but at price we can afford. Fortunately, there are some excellent options out there for the car shopper, so let’s explore what they are.
Lease New — Buying a new car means you’ll have to put down some money and make payments for three, four or five years…maybe longer. When your car is finally paid off, you’ll be left with a vehicle that will need increasing amounts of maintenance and repairs. Worse, it will be old. That’s why leasing is an excellent option for people who want a new car every three years and want to avoid paying for major repairs. Not all leasing deals are great, but some models require small down payments and reasonable monthly payments.
Lease Used — People who lease sometimes find that they can’t or don’t want to keep a car until their contract has ended. A divorce, job relocation or a need to get a larger car to accommodate a growing family may be some of the reasons why people will want to get out from underneath a lease. Services such as Swapalease.com and LeaseTrader.com have emerged, bringing car shoppers and leased vehicle lessees together. Under this arrangement, you can take over a lease and may avoid paying the residual fees already covered by the lessee, saving you hundreds, even thousands of dollars in costs.
Certified Used — You can’t afford the new car, but you may be able to afford a car that is used, perhaps a year or two old. These vehicles are snapped up by car dealers who know that they present a good value to customers and a source of profit for the dealers. Get a fairly new car that still has a warranty with it and one that has been priced to reflect the depreciation taken over its first year or longer.
Close Out — The best values on any new car lot are those vehicles that are slow sellers. Among the cars hardest to move are the previous generation models, especially as the next generation cars come to the market. If you can live with yesterday’s technology and engineering, which may not be so out of date anyway, then you could find a bargain, one with special rebates and other incentives offered to help move old stock. Examples of cars that fill this description are the Ford Focus, Honda Civic, Hyundai Elantra and Dodge Charger. Models slated for change in the coming year include the Toyota Camry, Chevrolet Malibu and Honda Accord. Models slated to be discontinued include the Buick Lucerne, Cadillac DTS, Dodge Caliber and Ford Ranger.
Hot Incentives — Incentives are one way car manufacturers move iron, with some deals designed to offer far better bargains than others. Typically, the best deals take place toward the end of the model year or calendar year, with rebates ranging from $500 to $3,500. Add in other incentives such as military rebates, recent college grad and loyalty rebates and the savings can prove significant. Shop around too — dealers in your area may offer additional specials, particularly on a trade in.
Before you buy any car, contact your auto insurer. You may find that your insurance costs will rise by hundreds of dollars, effectively eating up your savings. Some models, particularly those that test well with the IIHS, are insured for less. Know what all of your costs will be before making a purchase decision, avoiding a surprise that goes beyond sticker shock.