Whether you are in the market for a new or used car, there are some basic techniques you can use to save yourself money. Given the price of your next car purchase, the savings could be significant. From a few hundred on a used car to many thousands on a new car, becoming an educated car buyer will help put some of that premium priced gas in your new ride.
When in the market for a new car it is important to understand what market you are actually in. Not what type of luxury car you are looking for, rather flip it around and take a look from the other side – that of the car dealers.
Do you live in what you’d call a “competitive market” or is it just “Old Joe’s Car Lot” down the street? It’s called capitalism. In the free market, the belief is that companies will compete and the customer will win out with a lower price and more options. For cars, this definitely seems to be ringing true.
In a recent study produced by “AOL Autos Best Deal Program”, it was uncovered that many markets around the country are selling new cars at significantly higher “% off MSRP” than less competitive markets. But by how much? Let’s take a look at some closer numbers:
1. Tampa/Orlando, FL – 10.0% off MSRP
2. Baltimore/DC Area – 9.9% off MSRP
3. Atlanta, GA – 9.4% off MSRP
4. Newark, NJ – 9.3% off MSRP
5. Los Angeles, CA – 9.1% off MSRP
6. Dallas, TX – 8.8% off MSRP
7. Philadelphia, PA – 8.8% off MSRP
8. Miami, FL – 8.4% off MSRP
9. Boston, MA – 8.2% off MSRP
10. San Francisco, CA – 8.1%off MSRP
From just the top 10, there is a 2% variance in price reductions.. Where does your local market stand in relation to this chart? It’s hard to tell, but it’s not hard to get down and do a little research to compare the car prices in these markets to yours.
But what if there are significant savings in some other market.. I’m 500 miles away?
It’s a valid point but it shouldn’t stop us. Do some more research – Flights, trains, busses etc.. Can you get there and back with a significant savings over your local market?
In the market for a used car? You are in luck, the internet is on your side!
There are a myriad of online portals for listing and/or searching for your next used car. In your search for a used car, these sites offer a great deal of information to gain the perspective needed and in the end, save yourself some money along the way. A quick list of the most popular:
1. Autotrader (pay-to-list)
2. Car.com (pay-to-list)
3. Ebay (pay-to-list)
4. Craigslist (Free-to-list)
Researching the used car market is a bit different than that of new cars. While we can thank AOL for producing data on the most competitive markets in the United States, when it comes to buying a used car it is up to us to utilize the resources available to make an educated decision. The beauty is, it’s not difficult and when you couple the excitement of a new car (new-to-you) it can be rather fun.
In it’s simplest form, run down the following bullets for the typical car make and model you desire:
Build a quick comparison list for each of the previously mentioned used car sites on the following metrics:
1. Average price for different production years
2. Average price for different mileage levels on each product year
3. Does this model have different product levels? (i.e. basic, luxury, sport)
4. Adjust the distance from your residence to determine market value in areas slightly outside your region.
Packed with this analysis, you will become more educated into the value of the car you would like to purchase. From today’s price to that of what it may be worth a year or two down the road, this knowledge will help you determine the best value in town. Use it to bargain with local dealers and/or owners to drive down over-prices options.
A few more aspects to keep in mind (as an educated car buyer):
1. Service records – Yes or No?
Service records represent more than just a history of repairs or maintenance. They provide valuable insight into the type of previous owner for your next car. As an example, there are mixed feelings on the popular car company – SAAB. On one extreme owners will tell you to stay away from older SAABs as they are unreliable. This is in part because there are many older SAABs still running and you can pick one up cheap.
On the other side of the spectrum lie total SAAB enthusiasts who would purchase from no other manufacturer given the option. They are avid enthusiasts because SAAB did produce some of the most reliable engines in the history of car production, for at least a while. Point is, if you are in the market for a SAAB, the difference between a used car with a service history and one without will likely be the factor that polarizes you to one of the two differing trains of thought regarding this line of cars.
2. Warranty – Yes or No?
Obviously buying from a dealer can often times mean paying a higher price tag for your car. However, the benefits are often times worth the price increase. For one, they will likely have the service records as listed in #1. Second, dealers are typically required to offer at least some sort of warranty on repairs. The financial burden of repairs can be costly, not to mention the piece of mind when knowing you don’t have to worry!
In conclusion, the moral of the story is that a car purchase should not be taken lightly. It can mean the difference between thousands of dollars lost and/or thousands of dollars worth of repairs down the road. The educated car buyer can walk off with keys to a great value AND a reliable means of transportation for years to come. Given the ease in which we can become educated, the decision is solely in your hands..