Cars are expensive! Even among “economy” cars, prices for new models can be up in the tens of thousands and average car prices are approaching record highs. That’s an awful lot of cash, especially considering that many Americans have less than $1,000 in the bank.
Still, owning a car is far from optional in many parts of our country. If you live in most parts of the US, you’ll find that getting around without a personal vehicle is either very difficult or very expensive. That means that you can’t visit family and friends without buying a car. You may not even be able to get and keep a job without one.
This leaves most of us Americans in a tough spot. We need cars, but we don’t necessarily have the budgets for them. This can cause Americans to take out too much auto debt and wind up defaulting. That’s the wrong answer, of course: Taking out too much debt is a bad idea that can trap you in a perpetual cycle. Instead, you need to calculate exactly how much car you can afford and stick to that level of debt.
There’s a problem there, of course: Your budget may not look so appealing. Don’t worry too much, though, because there are ways in which you might be able to stretch your budget without changing it too drastically:
Avoid the dealership
Ask car buyers, and they’ll tell you: If you want to get ripped off, just head to a car dealership. The dealership model has been infuriating consumers for years. Show up to one, and you’ll quickly be found by a salesperson who has to weigh their own commission against your transportation needs.
They make more money when you buy pricier cars, and that they make the most money when they can sell the most cars to most customers the fastest. They want you to spend, they want you to spend big, and they want you to do it now! Needless to say, that’s not particularly conducive to you finding a car that fits your budget and maximizes value for you.
The best way to get a great value on your next car is to skip the dealership and instead shop on online car sales websites. Such websites have come a long way since the early days of the internet, and these days they’re every bit as reputable as (and in some cases more reputable than) their brick-and-mortar car dealership competition.
Check out online auto auctions
If you want to maximize your value even further, consider a certain type of online car sale: the auto auction. Instead of asking for a given price on a vehicle, some online dealerships hold auctions for vehicles. This can result in fluctuations in price and, depending on the timing of the auction and the market for the vehicle, the winning bid could be a lot less than the actual value of the car.
Of course, nailing the perfect deal takes a mixture of timing and research. It’s important to find out everything that you can about vehicles that you bid on so that you can make your purchase when you know you’re getting a great value. If you prefer not to bid, don’t worry. Auto auction websites almost always have “buy it now” features.
Target used cars in the “sweet spot”
You’re probably aware that buying a used car can help you save some money. But let the buyer beware: Not all used cars are created equal. In fact, some clunkers can end up costing you in unexpected ways when they suffer mechanical problems that newer cars would have avoided. Plus, used cars are older than new ones (obviously!), which means that they may not last as long. In turn, means that you’ll be considering all of these budgeting problems again sooner than if you’d found a way to land another model.
You can get the best of both worlds if you find your “sweet spot” with used cars. Target cars that are used but still relatively recent model years. Look for ones that are still in great shape. You’ll pay more than you would for a clunker while still dodging depreciation. Plus, you’ll be the owner of the car for most of its life which will give you more control over how long it lasts. Take good care of it, and you’ll be stretching the value of your purchase even further.