Saving Money on Your Next Car

Summary

The transcript summarizes a podcast episode focused on providing tips for saving money when purchasing a new or used car. It covers strategies like paying in cash to avoid interest, researching models and prices online, considering lower trim levels, negotiating effectively, trading in old models, and more. Key takeaways include the significant savings from not financing, the importance of credit scores and pre-qualification, sticking to budgets with affordability calculators, and leveraging online tools for price comparisons across dealers.

Chapters

Introducing Money-Saving Car Buying Podcast

The host Ralph introduces a podcast episode on tips for saving money when purchasing a new or used vehicle, either by paying cash or financing with better rates.

Paying Cash To Avoid Interest Payments

Paying the full price in cash can save thousands in interest payments over time. A $38K Honda Accord financed at 3.9% over 5 years accrues $3,100 in interest.

Researching Models, Prices and Inventory Online

Research online using Blue Book values to compare models, necessary features, pricing and real dealer inventory before visiting lots. This allows setting budgets and priorities.

Getting Pre-qualified and Knowing Credit Scores

Pre-qualify for loans from multiple lenders to get good rates. Also check credit scores beforehand since better scores mean lower interest rates from dealers.

Using Affordability Calculators to Set Budgets

Online car affordability calculators help determine suitable prices based on down payments, income, other expenses etc. This prevents overspending beyond means.

Considering Lower Trim Models

Opt for lower trim models without unnecessary features to save thousands. Don't get swayed by extra gadgets that don't fit needs.

Action Items

1. Research 10 academic articles in my field over the next month to identity key value words for specific journal or reader community codes.
2. Compare writing focused on communicating my ideas versus oriented toward changing audience thinking - track reader reactions.
3. Research 2-3 academic communities I am targeting for publications to deepen understanding of values, assumptions, anddoubts.
4. Aim for reader-defined value not original or new knowledge.

Now here's your host, Ralph Estep Jr. Welcome to the Ask Ralph show where we provide you with valuable financial advice to help you make smart decisions.

And today we're diving into a topic that affects many of us. And that's how to save money on your next car. Whether you're in the market for a new or used vehicle, these money-saving tips will help you get the best deal possible.

So stay tuned for our episode on how to save money on your next car. This is one you don't want to miss, folks.

Welcome to the Ask Ralph podcast. We're listening to an experienced financial professional can help you make sense of confusing questions, current headlines, and industry trends about taxes, small business, financial decision making, investment strategies, and even the art of proper budgeting. Ask Ralph makes the complex simple by sharing his real-world knowledge with all things financial.

And now back to the podcast. Here's a quick fact. Did you know that one of the best ways to save thousands of dollars is paying for your car in cash?

By doing so, you'll avoid paying interest on a loan and keep more money in your pocket. However, if financing is necessary, don't worry, we have tips for that too because not all of us can afford to buy a car with cash.

So let's jump right into our first tip. And like I said, the first tip is pay cash if possible. Pay for your car up front to save on interest payments. For example, financing a 2024 Honda Accord hybrid touring starting at $38,540 with a 20% down payment at 3.9% interest for 60 months could save you up to $3,100 in interest.

So we're talking about paying cash worth versus paying interest, which would cost you $3,100 in interest. Tip number two, research. Before making any decisions, do thorough research on the car you want to purchase.

Check Kelly Blue Book values and compare models to determine what features are essential and which ones can be sacrificed to lower the price point. And I'm hoping we're going to be able to see more inventory out there.

This has been difficult as of late. You know, trying to find vehicles that dealers actually have has been a challenge. So even if you were able to research, you may get stuck with what they have. But I think we're starting to see some changes in that.

So let's move on to tip number three. And that's look for manufacturer or dealership financing deals. Keep an eye out for those attractive low or zero percent interest rates from manufacturers or dealerships if your credit is excellent.

I did a podcast a few days ago on how to get your credit score improved because this is really important that you improve your credit score so that you can give yourself better options when it goes for time to purchase a car.

Number four, check your credit score before you shop. Knowing your credit score can help determine whether it's worth waiting or working on to improve it before you go buy in a car. A higher credit score may qualify you for better interest rates.

You don't have that dreaded meeting with the finance manager who tells you that they're unable to help you because your credit score isn't great or maybe they wail you with an interest rate that's just off the charts because your credit score isn't too good.

So on to step number five and that's pre-qualify for a loan. Shop around different lenders to find competitive interest rate offers on new unused cars before starting your search. This will help you keep your budget intact and prevent overspending.

I used to be the executive vice president of credit union. I used to tell our members all the time, if you're in the market for a car come see me first. Let me pre-qualify you for a loan so that you don't even have to deal with the finance manager at the dealerships and I'm not making negative comments about the finance men or women at dealerships.

All I'm saying is give yourself more options. Now number six, stick to a budget. You're able to use a car affordability calculator to determine whether you can comfortably afford a particular car. This will prevent you from spending beyond your means and potentially save you thousands.

I mean go and look at one of these calculators before you go car shopping so that you're not amazed when they give you a monthly payment. Number seven, which goes right along what we're talking about and that is estimate your payment before buying.

Utilize an auto loan calculator to estimate your monthly payments based on your vehicle's value, tax, interest rate, down payment and trade in value. This will give you a clear idea of what to expect financially so you be prepared when the salesman ushers you into the finance manager's office.

You'll know what to expect. Number eight, and this is an important one, calculate car insurance and taxes. This is all part of the deal folks. Before purchasing a vehicle, obtain several car insurance quotes based on the type of vehicle you're interested in.

Additionally, research your state's tax rate for vehicles to factor that into your budget. You know, this is something you're going to have to add to either your down payment or to your amount that you're financing.

Let's move on to number nine, consider a lower trim level. Opting for a lower trim level can save you thousands of dollars while still providing reasonable and reliable transportation. Don't be swayed by unnecessary features that they don't align with your needs.

Now look, all of us want all the cool bells and whistles and all the newest gadgets, but you really have to look at what those things are costing. Always tell my clients to take a look at that sticker and see what they're really charging for all of those additional options.

Another thing to do is number ten, compare new versus used. While new cars may have higher interest rates compared to used cars these days, deals can be found on less popular models or dealership inventory that needs clearing out quickly.

So this is an idea where you might want to compare, you know, new versus used. Number eleven, get an instant cash offer on your trade in vehicle. I'm going through this right now. Personally, we've got a minivan that we're trading in and we used to cart the dogs around and we're upgrading it to a little bit nicer minivan.

And rather than just going to the dealership and saying, hey, here's my trade, what are you gonna give me? We're actually looking at some real cash offers, you know, Kelly Blue Book, you can go on there, put all the specifics in the VIN number and all that stuff.

And they'll send that out to dealers who, and trust me, I had this very situation happen yesterday, they will reach out and make cash offers. You can also look at online buying places like Carvana.

So before heading to the dealership with a trade in, use tools that provide instant cash offers for your current vehicle from multiple dealerships. This allows you to negotiate better deals and potentially save money when purchasing from the same dealership.

Let's move on to number twelve, window shop first. Test drive several makes and models before settling on one particular vehicle. Take time to consider all options without feeling pressured by salespeople.

You know, the online ability to do this is amazing now. You can basically sit in the front seat of your car right from online. Another thing, number thirteen, is consider an outgoing model. If there's a new model year debut coming soon for the car, you'd like consider buying the outgoing model instead of, you know, because why dealerships may offer discounts or incentive to sell these quickly.

Number fourteen, be willing to walk away. Don't feel pressured into making an immediate decision if it doesn't feel right or if there's room for negotiation elsewhere. You know, you're not trapped in a dealership.

They don't magically lock the doors when you go inside the dealership. You can walk away. A lot of people don't realize that. And a lot of these salespeople, they're trained to keep you there. You know, what can I do to make this happen today?

Number fifteen, shop online and check prices at multiple dealerships. The internet has given us the ability to do just this. Utilize your smartphone to check pricing at various dealerships and communicate with salespeople.

I've literally sat at the salesperson desk and said, listen, I can get this same car down the road for $2,000 less. What can you do to help me? Don't hesitate to use offers from one dealership to negotiate with another.

Hey, look, in the end, you're trying to get the best deal for yourself. Number sixteen, trade in your older model for credit. If you have a highly sought after model, consider trading it at the dealership and using the credit towards your new vehicle.

In some states, this can reduce the taxes you pay on the new car. It's a great idea. Number seventeen, negotiate. Let me say it again. Number seventeen, negotiate. It's all about negotiation, folks. Don't be afraid to negotiate prices and ask for breakdowns of additional fees or add-ons that you don't want or need.

Don't let them add all these things to the end, you know, ask questions and say, I don't want those things. Number eighteen, lease a car instead. Leasing a car may be more affordable than an outright purchase, especially if it does make sense for you.

Look for monthly leasing deals and how you can set those up for low or no down payment options to save even more money up front. Number nineteen, buy a used car from a private owner. There's all kinds of sites on the internet for this now.

Purchasing from a private owner often allows for significant savings compared to buying from dealerships that mark up prices for profit. Listen, they have the right to do that. We're all in business to make money.

But make sure you save platforms like private seller exchange when buying cars privately. You want to just buy these in some alley on some back street in your town. Well, I hope these tips will help you save money on your next vehicle purchase.

Remember, always do thorough research, stick to your budget, and don't be afraid to negotiate for the best deal possible. Listen, in the end, be sure to share this podcast episode with friends and family who could benefit from these money saving tips.

If this is a podcast you want to share with anybody that's in the market for a new car. You can visit our podcast page at www askralphpodcast.com where you can leave us reviews or voicemail messages with any questions, you'd like us to answer on future episodes.

This episode is brought to you by Saggio Accounting Plus, experts in financial management that you can trust. Well, that's all we have for today's episode of Ask Ralph Show. Stay tuned for more episodes where we tackle your toughest financial questions.

Until next time, keep asking Ralph. And like I said, go to our website askralphpodcast.com, click on the little microphone icon down at the bottom and leave us a message and maybe you will be featured on one of our next podcasts.

So take care, my friends. Thank you for joining us on the Ask Ralph podcast. And with a simple click to subscribe, we'll invite you back to our next episode. And remember, financial issues don't have to be complicated.

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