14 Tips For Saving Money When Buying A Car

Today’s post is all about the best car buying tips so that you can save money when buying a car. Not all car dealerships and car salesmen are bad. I know this for a fact because my husband used to be a new car salesman (and he was nice! I promise!). My husband knows all…

Michelle Schroeder-Gardner

Last Updated: June 4, 2023

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Today’s post is all about the best car buying tips so that you can save money when buying a car.

Buying a new car can be fun, yet stressful at the same time. You don't want to get tricked or duped, so here are car buying tips before you go car shopping!Not all car dealerships and car salesmen are bad. I know this for a fact because my husband used to be a new car salesman (and he was nice! I promise!). My husband knows all about the flack that salesmen get.

Despite the reputation car salesmen get, the car buying process is not perfect either.

Whether you are purchasing a new or used vehicle, there are several car buying tips and tricks you should know of so that you can walk away with the best deal possible. There are so many options and extras that come up when buying a car, which means there are many ways for you to end up leaving confused or paying more than you should be.

Whether you are buying a $500 car or a $50,000 one, you want to get the best deal possible. To make sure you don’t walk away from a deal angry or regretful, it’s important to be as knowledgeable as possible.

According to Edmunds.com, the average person in the U.S. spends $483 on a new car payment and $361 on a used car payment.

That’s a lot of money, which can leave a lot of room for mistakes and overpayment.

Before we begin, I want to tell you about several ways that car dealerships make their money. These are things you will want to be mindful of:

  • Your trade-in vehicle. To make a profit on your used car, they will want to offer you less money than they can sell it for. Of course, this is normal, but you want to be mindful of this so that you can get the most money out of your trade-in vehicle.
  • Incentives and bonuses from the car manufacturer. This means that if you can buy a car when a dealership hasn’t reached their selling quota, you may be able to get a great deal on your car purchase. Many times car dealerships will take a loss on the vehicle if it means that they will be able to reach their quota.
  • Financing the vehicle. Dealerships make money when you finance vehicles through them.
  • Extra options, such as an extended warranty.

Buying a new car can be fun and stressful at the same time. You don’t want to get tricked or duped, so here are car buying tips and tricks before you start shopping!

The best car buying tips:


Don’t just think about the monthly payment.

The most important car buying tip I can offer in this blog post is that you should not just care about the monthly payment.

You should only purchase what you can actually afford. Just because the monthly car payment looks affordable, it doesn’t mean that it actually is.

There are car payment terms that are as long as 96 months, which is just crazy to me. A car salesperson may stretch out the car payment so that it looks to be more affordable for you, but you should be aware of the whole cost, which includes things like interest and taxes.

Please, please, please, look at the whole cost and see if that’s actually an affordable amount for you to be paying.


Shop around for your own financing.

If you have to finance your car purchase, make sure you shop around before you agree to the dealer’s interest rate. Sometimes the dealer has the lowest rate, but sometimes they don’t.

You may be able to save yourself hundreds of dollars a year by simply shopping around. Plus, it’s extremely easy to shop around for the best interest rates – start with local credit unions and banks!


Go to a few car dealerships.

You can shop around car dealerships both online and offline.

I recommend shopping online before you go to a dealership, this way you can be prepared by learning as much as possible in advance. You also won’t be wasting your time at car dealerships that can’t get down to the price you want.


Don’t add small and unnecessary extras at the end of your purchase.

When you are about to purchase a car, you will be encouraged to buy many small options that you may not need. This may include extras such as:

  • Tire replacement
  • Paint protection
  • Extended warranties

While you may believe that you need some of the above options, you should make sure that you’re not just thinking about the monthly cost. The financing manager will offer you these extras in a way that makes it seem affordable. But, these extras only appear inexpensive because they are padded into your monthly cost, so don’t be fooled by how “affordable” they seem.

Yeah, $1 or $5 each month may not seem like much, but it can add up to a lot over a 5 year period!

Trust me, you are paying for these, and it’s not just a good deal that you are getting.

Related: 30+ Ways To Save Money Each Month


Determine how much your trade-in is worth.

If you have a trade-in vehicle, you should figure out how much it is worth before you step foot into a car dealership.

Kelley Blue Book is a great resource for doing this. While you may not get the exact amount that Kelley Blue Book claims you will get, it can be a good estimator or starting point when negotiating with the car dealership.


Know the right time to go.

There are certain times of the month and year that are better for car shopping than others. If a dealership is trying to meet their sales quota, they are more likely to give you a deal than when they’ve already beat their quota or if it’s the beginning of their quota.

This is because car manufacturers will give bonuses and extra incentives to car dealerships who sell a certain amount of vehicles. This gives car dealerships extra motivation to give really good deals if they are close to their quota.

I know someone who was able to lease a brand new car for just $70 per month, with no money down, because a car dealership needed to meet their quota. They got one heck of a deal!

To know the best time to go, you may want to make friends with a car salesperson, find out when their end of month or end of quarter is, and so on. Or, you could just ask. My husband would always tell people when the best time to buy was and would even call them, but many people did not believe him. If they only knew!


Don’t be afraid to negotiate.

Even if you get a discount, such as a car manufacturer discount, you should still negotiate. Many times, those friends and family discounts mean that you are not able to haggle at all, which can lead to you actually paying a higher price.

Cars sales are meant to be negotiated, whether it is a brand new vehicle or a used one. If you don’t haggle, you will most likely lose out on a lot of money, because negotiating is expected.

Other aspects of the vehicle buying process can be haggled on as well, this includes your trade-in vehicle, warranties, interest rates, add-ons, and more.

Learn more about negotiating at How To Rock At Negotiating On Everything.


Be nice.

No matter what, you should be a decent human being.

Being rude won’t get you the best deal, instead it may make the salesperson and the dealership not want to help you. After you purchase a car you are asked to go through the car manufacturer to grade your car salesperson. If the salesperson knows that you might give them a bad grade, they may not want your deal because it’s not worthwhile to them to have a bad score (which decreases their salary/income).

Plus, you should always be nice anyways. Salespeople are just doing their job and trying to make a living, and the majority of them are good people.


Miscellaneous car buying tips and tricks.

Here are several other car buying tips and tricks:

  • Never shop when you’re hungry or tired. You should always be well-rested and ready for an eventful day.
  • For the car dealership to beat their quota, sometimes they will buy a new car themselves and put it on the “used” car dealership side. The car is still brand new, but is now considered pre-owned. This can allow you to save a good deal of money. However, you do want to be mindful of the warranty, because the warranty has most likely started once the car was officially bought the first time (by the car dealership).
  • Purchase a car at the end of the car’s model year. Dealerships want to move out last year’s model to make room for the new ones, which can lead to a good discount.
  • Look into car insurance rates before you purchase. You may want to contact your car insurance agent so that you are not surprised by a high insurance rate after you make a purchase.
  • Don’t tell the salesperson what your budget is for a monthly payment. You should always negotiate on price first. A dealership will try to get you into something that will just barely fit your monthly payment budget, which can cause you to spend a lot more money in the long run.
  • Be confident. When negotiating, you should always be confident in what you are saying, and do not be afraid to walk away. If it’s not meant to be, then it’s just not.
  • Find the best car insurance. What is the most reliable car insurance company?

What other car buying tips and tricks do you know of? Share in the comments below!

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Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. This is a really extensive list of tips, I’m sure many people will appreciate how in-depth you went with car buying advice. It can be extremely overwhelming buying a new car, especially when you don’t know a thing about the mechanical side.

    I found it quite intimidating being a woman doing the car buying. I often went to car dealerships on my own, so I felt that I really did have to put my confident face on. Your tips covered almost everything I did when looking for a car but one more thing that really helped me is knowing what I was looking for, I did a lot of research and narrowed it down to 2-3 particular car brands/models BEFORE going to the dealership. Doing that research did mean I had a little bit of knowledge on those particular models (whether they had timing belts or timing chains, the recommended servicing timings, etc) which made me more confident in the process of dealing with the salesmen.

    On the note of recommended service timings; you should always check the service book when you test drive a car you like. If the car hasn’t had the proper schedule for servicing then some major processes could have been overlooked. On every car they do particular things on different mileage, if the previous owner has skipped the 10,000 mile service and gone straight to the 20,000 mile service all of the required mechanical work from 10,000 mile might not even have been done!

    One last point – a newer car with very high miles has been “worked harder” than an older car with lower miles, I’m not sure how true it is but I was recommended to steer clear of over-worked mileage cars.


    1. When my husband was a car salesman, his dealership did things a little differently. They were always told to sell to the woman, and pretty much ignore the man. Because in the end, usually it’s the woman who decided whether a car would be bought or not. Lots of dealerships do it the other way and ignore the women, which can be very frustrating!

    2. altackr

      My father taught me many years ago. Never make car payments. Never trust a car salesman. MSRP doesn’t mean a thing. The manufacturer can’t tell the dealer how much to charge. Save enough cash. Put the money on the dealers table. Tell the dealer this is all I will pay, OTD. “Take it or leave it”. No haggling. The dealer will usually say “no”. Then by the time you get home there will be a phone message for you. “Come back and pick up your new car up”

  2. Mrs. CTC

    These tips are all really good, and I love how little they have to do with the technical specs of the car itself. Yes of course you should make sure that you not buying a piece of scrap, but you should also check the total costs of financing and compare to other financing options.

    Not looking for a car when hungry or tired, and check the dealer’s quota: that’s just genius.

  3. Beks

    The first car i bought myself, I thought I was getting a good deal, but that thing broke down so often it was ridiculous. And it had a million small things that were going wrong with it. I hated it with a fiery passion. When I finally traded it in, I started a lease (Not the best idea, I fully admit), but considering everything that’s covered on it right now, the fact that it had 6 miles when I drove it off the lot, and I’m only paying $20 more per month in both the payment and insurance, I feel like I got a good deal. I’m also taking better care of it, since it’s a lease. It’ll still count toward a trade-in when I return it, and I’m hoping by then I’ll have good credit, and a lot saved for a down payment. But the whole car buying process is exhausting, and I hate it. I love my car, though.

    1. Yeah, the whole car buying process can be very exhausting!

  4. Great tips, Michelle. Buying a car can be an intimidating experience! I love your tip about not shopping hungry. We don’t really think about that when doing large purchases, but that can definitely color the experience. Being willing to walk away is important as well. I would add, consider waiting 24 hours before going through with the purchase. It’s amazing how sleep can cast a new perspective on a major decision.

    1. Yes, sleeping before making a big purchase is a great tip!

  5. Great tips for what is probably the second biggest purchase you’ll ever make.

    Love the insider tips from a former salesman! Most dealerships work on quarterly sales targets making the end of March, June, September and December the best time to buy. Also you’re more likely to get a better deal on a convertible in winter!

    I’d also add that, sure it’s a little more hassle, but selling your old car privately could net you a much better deal than trade-in.

  6. Norman

    Although I don’t plan on buying a car in the near future, I do appreciate all this insider advice! I think the key is to have as much information about car dealerships and how they work in general (e.g. meeting quotas, moving new cars to the used dealership). The more we know, the better the position we are to negotiate.

    I would also add that you may be able to negotiate the prices of any add-ons. I would guess that dealerships make quite a margin on the add-ons to begin with, so there may be negotiating room there. Or if you notice something wrong (but not a dealbreaker) with an old car, you can use that as a negotiating piece to lower the price.

  7. David @ Thinking Thrifty

    Some great tips here, although being a tight wad I just couldn’t do it. We needed to update our car recently as the other one was costing fat too much to keep fixing up. Luckily I managed to negotiate a deal with my boss to give me an advance out of my wages which we pay back monthly, meaning the car will be paid in 6 months and not 5 years. But, that’s luck i suppose!

  8. Vicki@Make Smarter Decisions

    This is incredibly important information for folks. I hate negotiating for things like cars – so we bought our last one from our mechanic who is also a very small-time dealer. We figured if he had to maintain it (and we’ve used him for years and totally trust him!) – he would give us a good deal. I don’t plan to ever step foot in a dealership again based on what you explained! I just wish more people would read and act on what you wrote here. I wrote about financing issues and attached it here as well.

    1. I don’t think there’s anything wrong with dealerships – it’s more about being knowledgeable.

      1. Vicki@Make Smarter Decisions

        I agree for most dealerships I guess, but there are a few that have questionable practices and prey on those just may not understand. Great point Michelle!

        1. Yes. My husband often had customers who were really rude to him and pre-judged him. He made the same amount of money regardless of how much the person paid for the car, so he didn’t mind if someone got a deal or not. That’s something that many consumers do not realize.

  9. Because I hate wasting time driving all over town to check out vehicles for sale, I save a ton of time by literally emailing every single dealership that is within driving distance, telling them exactly what make and model I’m looking for, say when I want to buy (ex. I’ll be buying something by the end of this week), ask if they have what I’m looking for, and if so, what is their best price. Aside from the first car I ever bought right after graduation, I pay cash for my vehicles, so I state the fact that I’m paying cash in the email too.

    After I hear back from them all, I take the lowest price I was offered and see if the others will beat it. This is easiest if buying brand new since then you’re comparing apples to apples. But even for used vehicles it can help to be able to say something like “I’m torn between your car, and this other one at X dealership. Yours would be the winner if you can lower your price a bit more. Can you do that?”

    Then all that’s left is to check out the vehicle in person and make sure it’s as good as it sounded via email (and for used cars, get a trusted mechanic to take a look at it).

    For used vehicles I look at private sales too… sometimes you can find a gem for a great price.

  10. I think your tip about being prepared to walk was golden. I don’t have a tip other than to share this 5 minute video from Dave Ramsey called “Drive Free – Retire Rich”. We’re on our second iteration and it’s worked well for us.


    Don’t miss the last line. It still knocks me out!

  11. Monica@wellideclare

    Oh wow! Thanks for sharing! I hate to say it but I’m not the easiest customer when it comes to buying a car. I feel like I’m being scammed from the second I walk onto the lot. I know that’s not always true but I’ve gotten several “deals” that weren’t deals at all. My husband and I drive very old vehicles so eventually I will have to buy a replacement. I appreciate your article and hope to remember these tips!

  12. Love these tips! Especially focusing on overall cost instead of just the monthly payment. I hate car shopping, but my husband loves it. He’s the negotiator and will sit in a dealership for an entire day. We have had good luck selling vehicles on our own and landing somewhere between trade-in vs. private sale price on Blue Book. I’ve worked for a dealership and you’re right the money their bread and butter is selling trade-in vehicle, extras and financing. Not new vehicles as you would expect.

  13. Ugh. I hate car shopping. That’s one of the reasons I keep my cars for as long as possible! Looking and buying cars are so stressful! The car I’m driving now has 187,000 on it. I’m hoping it lasts for several more years!

    Do you think car dealerships give better deals to people who pay in cash or to the people who finance? Or doesn’t that matter?

    1. If you finance through them, they make a little bit more money. However, it’s hard for them to know if you are financing through them until the end, so that’s hard to say. I don’t think they give deals for paying in cash, though.

  14. Fantastic tips. I recently went through a car negotiation process and am still wondering if I overpayed for the vehicle or not. One thing that they did tell me was that they would have sold it to an auction for the exact same price if I had walked away from the deal anyway. That got me wondering why it was beneficial for them to sell it to me in the first place but after reading this article it’s clear that it benefits them because they’re able to meet their quota and increase their sales!

    1. Yes, they are willing to take a loss on many vehicles. Many times people do not believe that!

  15. We just bought a new car a couple of weeks ago (our first new car, ever!) and I have to say this list is spot-on! Especially the party about being hungry. The whole process takes forever whether you’re just looking or actually planning to buy. Those salespeople know how to trap you! Because we were planning to trade in they took away our car keys and basically held us hostage the first time until I practically had to yell at them that we were NOT buying a car that day! So annoying, and something I hope to not have to do again for a VERY long time.

    1. Aww that sounds like a bad experience!

  16. My husband and I play good cop, bad cop. He’s the good cop; I’m the bad cop. That means I already know a low price I am willing to pay, and I am willing to walk out the door. It has worked both times we purchased a car!

    1. That’s the role in most relationships when purchasing a car – car salesmen know this 🙂 Wes was always told he needed to sell to the woman (because they make most financial decisions and were usually the deciding factor in whether a car would be bought or not), not the man, haha!

  17. “No matter what, you should be a decent human being.”

    Best piece of advice in the article! I think that’s a big misconception when it comes to negotiating. You really don’t have to be a jerk to get your way. People are MUCH more willing to work with you and compromise if you’re coming from a place of respect.

    1. Right? It’s sad that I even have to say that. However, when my husband was a car salesman, people were often very mean. Eventually they would become nice and say something like “I never thought the car buying experience would be this pleasant.” He got many great and positive reviews so it stunk that people would prejudge him just because he was a car salesman. He worked with many other very nice guys too!

  18. Totally agree! Negotiate multiple times! When I bought my new car (which I’ve since sold) I was offered a 3.9% interest rate to start which I negotiated multiple times down to 1.9%! Also, your advice about not getting any extras is dead on! I worked so hard to negotiate on the interest rate only to lose money in the back-end by taking the “paint protection, windshield replacement, add-ons” that were probably covered by my insurance anyways! Great tips!

  19. Jake White

    The very best way to buy a car is by email. After test driving and researching, I identified the car I wanted to buy. I went to the dealer website and qualified for financing first, then located the exact car I wanted. Next, I contacted the dealer by email. I told them my financing was already approved, told them the car I wanted and stated the price I wanted to pay. They kept asking me to call or come in, but I kept replying by email. I had control and they wanted me to relinquish that control by calling or coming in person. I told them I would come in to complete the purchase as soon as they agreed to the price I wanted to pay. It was the best car buying experience, I’ll never do it any other way.

  20. Sherrie

    Great tips. I’ve gotten a really good deal on an awful car, and a really awful deal on a really good car. If I had to choose, I’d take the bad deal on the good car! Thankfully, I don’t have to choose. I, too, drive cars a long time. Nothing drives as good as paid-for feels, right?

  21. Kaitlynn Marie

    These are all great tips! I’m working on saving for a down payment so I can finally buy my first car. I know it’ll be used, and definitely not newer than 2006, but these tips will certainly help.

    1. Adam

      Don’t forget to watch out for the warranty scams. They tell you you should get the warranty or you have to get the warranty to get that lower interest rate. You don’t have to get the warranty. I just dealt with this with a dealership today. They wanted me to pay $2500 for a warranty from a company that didn’t even rate well with the bbb. And over time it would have cost me $4000 total at end of loan. What they actually do is sell you a warranty for 1000 at 2500 and then pocket the rest. I’m not sure if they continue to collect the interest but I think they do. Cause the bank gets what the bank or finance company gets via the interest rate. The warranty is all the dealer.

  22. Paige @ Live, Laugh, Budget

    I definitely got screwed the first time I bought a car. I’m on my third now due to some unfortunate luck with car accidents. Luckily, for cars 2 and 3 I found a very trustworthy dealership through word of mouth. Check reviews online of the dealership and ask friends and family for referrals. I will only buy cars from this dealership from now on, they are wonderful.

    The only thing I would add to your list of tips is one “extra” that may be worth it. If you have a low down payment and you want to buy instead of lease, consider gap coverage. After totalling three cars in just a little over two years (one car fire and two car accidents) the gap coverage completely saved me when insurance would not cover the full amount of my remaining loan. This is helpful since the car usually depreciates faster than you are scheduled to pay it off, unless you have a large down payment or make extra payments to keep ahead of the depreciation.

  23. These are all really great tips. I feel that car sales industry is a relic and we still have to approach it with things like this in mind. At least now there are online car buying options. I just don’t know how many people will really use it though.

  24. Wow, I didnt know you would reveal all the secrets lol. I detail cars at the dealership so this makes since. The best time to buy a car is most of the time at the end of the month. Thank you!

  25. I liked what you said about not just worrying about the monthly payment. I never really thought about how long it can take to pay off a car depending on what you pay monthly. We’ll be sure to find out what will be best for us and for how long we’re willing to pay off a car.

  26. What a great post. Informative from start to finish. And yes, you can compare car dealership to any small business. Meaning that this post is full of valuable information for anyone and everyone