If you’ve been on the lookout for a new car, you’re in luck, because Presidents Day is packed with car sales. But if you want to get the best deal, you need to do a little more than just run down to the dealership. Here’s what you need to do before you head out to the car dealerships for the Presidents Day holiday sales.
Calculate what you can afford
Before you even think about what you want to buy, you should think about what you can afford to buy. How much do you have saved up for a downpayment? How much can you afford to pay per month?
How much you wind up paying a month will vary on the price of the vehicle and the repayment term you choose. Auto loans typically range from 36 to 84 months, but you’ll usually get a lower interest rate and pay less interest overall on a shorter loan. So now it’s time to do some math: how much car could you afford to buy on a 36 month term? What about a 48 month term? This will give you a good idea of what you can afford to buy.
Decide what you want
If you want to take advantage of a sale, you should do your browsing in advance. Check out makes and models online so you know what you’re looking for—but you may not want to pin your hopes on anything too specific, as stock at the dealership will be limited. By doing your research in advance, you can make a beeline for the car you want and avoid being oversold on something you don’t need.
Looking to save? Consider these features while you’re browsing:
- How many miles per gallon does it get? A higher MPG will cut your costs at the pump.
- What’s the total cost of ownership? This number considers what you’re likely to pay in total for the car, including maintenance, repairs, taxes, insurance, and more. Edmunds has a calculator to estimate your costs for five years of ownership.
- What are the trim levels? If you’re buying your first car, the term trim level may be unfamiliar, but it’s pretty simple: it refers to the different packages of features the car comes with. For example, the Honda Accord Sedan is available in LX, Sport, Sport Special Edition, EX and EX-L trim levels, each with more features and a higher price tag. Take a look at what’s included in each, so you know what you want and when you can ignore an upsell.
- Consider last year’s models. If the dealership has any 2016 models still on the lot (and it may not), these are the vehicles that are likely to go at bargain prices to get them off the lot.
Comparison shop for extended vehicle warranty and GAP programs
There are two important vehicle coverage plans that should not be overlooked when you’re ready to seal the deal on your next vehicle purchase: GAP (Guaranteed Asset Protection) coverage and an extended warranty coverage plan.
- GAP coverage will help you pay off your loan if your car is totaled.
- An extended vehicle warranty coverage plan can help make those expensive repair bills more affordable.
While these plans are designed to help you save money if you should need to use them, it’s important that you shop around and compare pricing on these plans before you commit—because pricing can really run the gamut from the affordable to the truly expensive.
These coverage plans can be purchased at a dealership or through your lender. However, it’s fair to keep in mind that these products are generally less expensive at a lender like PenFed than what you should expect to pay at a dealership.
Call your insurance company
It may seem silly to call your insurance company before you’ve bought a car, but it can be a very good thing for your finances. Once you’ve narrowed down your options, check with your auto insurance company to see what each vehicle would cost to insure. You may be surprised to find that some cost less than others—possibly enough to change your mind about what you’re going to buy.
Get pre-approved from your lender
While car dealerships will be happy to help you with a loan, they may not be the best deal in town. You’ll usually be better off talking to your financial institution and getting approved for a loan beforehand. Then when you hit the car lot you can focus on finding the perfect car instead of worrying about financing.
Consider buying your next car through PenFed
Whether you’re buying new or used, PenFed has great financing options for your next vehicle with great rates on new and used vehicles. If you prefer to hunt down that perfect vehicle online, then check out the PenFed Car Buying Service. The service allows you to search and sort for vehicles by the features you’re looking for, double-check that you’re not overpaying for the car and features you want, and then helps you secure the deal.