Save Money With These Top Tips For Buying A New Car

Looking to buy a new car? Here are 10 top tips for buying a new car so that you can learn how to save money with your next car purchase. Enjoy this new car buying guide! I’ve recently heard a lot about people spending an exorbitant amount on their monthly car loan. Personally, I know…

Michelle Schroeder-Gardner

Last Updated: June 1, 2023

Disclosure: This post may contain affiliate links, meaning if you decide to make a purchase via my links, I may earn a commission at no additional cost to you. See my disclosure for more info.

tips for buying a new car

Looking to buy a new car? Here are 10 top tips for buying a new car so that you can learn how to save money with your next car purchase. Enjoy this new car buying guide!

I’ve recently heard a lot about people spending an exorbitant amount on their monthly car loan. Personally, I know several people who spend over $1,000 a month on their car loans while barely making enough to cover that and all of their other bills.

So today, I want to give you some tips for buying a new car so that you can save money on your next car purchase.

According to USA Today, the average new car price is around $37,000, with the average new car buyer paying around $550 a month with loan terms of 69 months. Many people are buying more expensive cars and taking out loans with high interest rates in order to “afford” them.

In fact, according to Edmunds, the current average annual interest rate on in 2019 is 6.19%. I’ve even seen car buyers with interest rates of 20% and higher.

And, people are extending their car loans for longer periods of time in order to get an even lower monthly car payment. While 72 months used to be a crazy long time to finance a car, terms of 84 months are even starting to become the norm.

Now, I’m not saying that you shouldn’t have a car loan or buy a new car. But, I do want people to be more mindful of their car spending and be more knowledgeable going into the car buying process.

Today’s post is all about the best tips for buying a new car so that you can save money when buying your next vehicle. And, many of these tips for buying a new car are also tips for buying a used 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 about the flack that salesmen get, and he even helped with some of the tips for buying a new car that I’m going to tell you about.

Despite the reputation car salesmen get, the car buying process itself can be really stressful for everyone.

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 available. To make sure you don’t walk away from a deal angry or regretful, it’s important to be as knowledgeable as possible.

Cars aren’t cheap, which can leave a lot of room for mistakes and overpayments. You can buy a car that doesn’t meet your needs, is too expensive, and more.

We’ve had a lot of vehicles in our life, from a really cheap $500 car that ran well (yes, you can find good vehicles for cheap), to expensive new vehicles. And, we’ve used all of the tips I’m going to share with you today.

Before I tell you the top tips for buying a new car, I want to tell you about several ways that car dealerships make their money. These are things to be mindful of:

  • Your trade-in vehicle. To make a profit on your used car, car dealerships will 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. Even though it takes a little more work, you can often make more money if you sell your car privately instead of selling it to a dealership.
  • 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 (this is covered more in my list of tips for buying a new car). 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. These are things like an extended warranty and upgrades.

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

Here are my best tips for buying a new car (or used one):


Think about the WHOLE COST of the car.

The most important of these tips for buying a new car that I can offer you is that you should think about more than just the monthly payment. This is the smartest way to buy a car.

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 every month.

Even if you aren’t buying a brand new car, used cars can still cost you more than you think in insurance and taxes, so always think about the total cost before you purchase your next vehicle.

Related: Jerry Insurance Review: How To Save Up To $800 A Year On Insurance


Shop around for your own car 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 first dealer you visit will have the lowest rate, but sometimes they won’t.

You may be able to save yourself hundreds (or even thousands) 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!

I’m in quite a few Facebook groups about personal finance, and this topic comes up over and over again: people who are excited about getting a car loan with an interest rate of over 20%. And sadly, many of these people are buying brand new cars, not realizing how much they are about to pay because they don’t know much about personal finance.

20% is not a good interest rate for a car loan – so please don’t be excited about that! I am saying this to help you, not to be mean in any way.

You should shop around and make sure you are getting the best possible rate. If you are getting a 20% interest rate on a car loan, then you should probably not be buying a brand new car. There are plenty of more affordable vehicles that are older but still quite reliable.


Visit more than one car dealership.

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 in advance with the costs, loan terms, extras, and more. While shopping around does take time, you won’t be wasting it on a dealership that can’t get down to the price you want.


Skip the extras at the end.

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:

  • Paint protection
  • Extended warranties
  • Upgrades

While you may believe that you need some of those 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, $10 or $50 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. Dealerships make money on these extras.

Related: 30+ Ways To Save Money Each Month


Figure out how much your trade-in is worth.

One of the best tips for buying a new car if you’ll be trading in your vehicle is to know how much it is worth before you step foot into a car dealership. This is important for car buying negotiating tips.

Kelley Blue Book is a great resource for researching what you’re old car is worth. 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 when to shop.

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.

This is one of the best tips for buying a new car that my husband learned from selling cars.

To know the best time to shop for a new car, 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 someone at the car dealership.


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 usually 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.

Other aspects of the vehicle buying process can be negotiated 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. This is one of my tips for buying a new car that applies to most other aspects in your life.

Being rude doesn’t get you anywhere. It won’t get you the best deal, and it may actually 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 (for no reason at all), 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. If you’re nice to them, they may be willing to help you out a little more.


Miscellaneous tricks and tips for buying a new car.

Here are several other tips for buying a new car (or used one):

  • 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, even if it was bought 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 before you purchase. You should contact your car insurance agent so that you are not surprised by a high insurance rate after you make a purchase.
  • Figure out what you’ll need to pay in personal property taxes for your car, which varies state to state. You will need to add this into the total cost of your car.
  • 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.

What other tips for buying a new car can you share? Leave them 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. I definitely agree with you on skipping on the upgrades. Definitely read the fine print on the car warranty and everything else in the contract before signing and driving away before shelling out one red cent in $ gUaP $ to the car dealer, because you never know how much you’re paying in hidden fees until you read EVERYTHING.

  2. I definitely second the tip on checking insurance rates before you buy the car. I think it’s a step that most people skip and can surprise a lot of people when their new car rates are double their old car’s rates.

    1. Jonathan,

      I couldn’t agree with you more. Thing is, most people don’t do their homework by researching best insurance rates pertaining to age, years driving, and points on record (if any). Insurance rate comparison is crucial if one is in the mindset of purchasing a new vehicle.

  3. This was very helpful! We currently have no car loan debt (thank God!) and are not planning to get newer cars any time soon, but as a person who has been burned by many seedy (and others not so much so) cars salesmen, I can’t tell you how amazing it will be having these tips, once we decide to upgrade our current vehicles. Thanks, Michelle!

  4. Darrell Handley

    Hi Michelle,
    I was an idiot and got sucked into a bad new car deal due to my questionable credit and my old car was totaled in a hit & run! I needed transportation quickly!
    I bought the car a 2017 Malibu in March of 2018. I’ve made all of my payments early but they are killing me ($394/mo.).
    When can I sell this car and come out with enough money to buy another less expensive car that is affordable? I try very little and have less than 4,000 miles on it.

    1. Brent

      Surprised you left out researching the car’s invoice price and using that as a point of reference in determining how much to offer.

      Also, tips on starting the pricing discussion with multiple dealers via email would be helpful since most people don’t know how to start the dialogue.

  5. C Holmes

    Good Evening! I found your information helpful. However, what are your thoughts about leasing a car???

  6. Another great article Michelle! You have a lot of excellent tips in there. I think your tip about negotiating the full price and never the monthly payment is one of the most important aspects to buying a car that will be financed or leased.
    Of course, the monthly payment can vary a lot depending on the length of the car loan and the interest rate, so negotiating around the monthly payment makes no sense. If you are planning to finance a car, don’t tell the dealer that you want to finance it until the end; after you have already negotiated the actual full price of the car!
    Thanks again for the great article!

  7. Hello Michelle,

    It’s been awhile.

    I totally agree with you especially on the idea of shopping around. Some dealers tend to sell higher than others but if one can shop around and make inquiries here and there, I’m sure he will get a fair deal.

    Thanks for sharing great value here.


  8. Derek McDoogle

    I found it interesting when you said to purchase a car at the end of the car’s model year. My cousin wants to buy a new car for his wife. Thanks for the tips shared in this article such as not telling the salesperson what your budget is for a monthly payment.

  9. Matt Johnson

    Really good post.

    I often feel that people are buying cars more for a status symbol rather than a necessity. As with most high cost items, especially those that are more ‘luxurious’, this can lead to too many people getting into unnecessary debt.

    Shopping around is certainly key, but negotiating extras to be included in a new car purchase is a good idea too. Something such as a yearly service plan could save you a hell of a lot in the long run.

  10. Derek McDoogle

    My brother told me that he would like to get a car so that he does not have to take the bus anymore to go to work and school. I like how you suggest setting up a budget for a car that you can really afford. I will share this article with him so that he can take it into account when he gets his new vehicle.