A Great Deal on a New Car is Out There—Despite Tariffs. Here’s How to Get It.
If tariffs, rising inflation and ongoing shortages have you nervous about buying a new car, a used car or concerned about expensive car repairs, you’re not alone. But there’s a silver lining: During the pandemic we learned new and better ways of buying a car, selling a car and getting a car repaired. Even without the pressure of tariffs and price increases, these are great strategies to use any time.
This story is 100% human researched and written based on actual first-person knowledge, extensive experience and expertise on the subject of cars and trucks.
Before You Shop, Shore Up Your Finances and Credit Score
This is always the first place to start when it comes to car shopping. Get a copy of your credit report and if there are things on it—a phone plan with a delinquent payment history? A credit card that’s over its limit? A department store credit card that you never use?—that hurt your credit score, fix them. By paying off loans, closing unused credit accounts and clearing up unresolved disputes you can increase your credit score significantly.
Read: Buy This Not That: The Best Used Cars That Are Just as Good As New
Line Up Your Financing
This can’t be stressed enough: Get your loan approved before you start car shopping. You’ll know what you can really afford to spend and what your monthly payments will be. You will also learn what interest rate you qualify for, which can be different when financing a new car vs. a used car and it can vary by the length of the loan.
Best of all, having your financing done gives you negotiating power. And here’s another thing to know: The dealer makes money from any loan, not just the ones they originate. So if you’re told that the dealer won’t make any money if you get a car loan from your bank to finance the car, that is incorrect.
Read: These are the Best Budget Trucks and SUVs Under $30,000—or Really, Sub-$27K For Wiggle Room
Accurately Assess Your Trade-in
This was one the things we saw in the pandemic that we will probably see in the coming months: an increase in used car values. Get several assessments of the value of your car, especially if you’re going to trade it in: Ask the dealer for an offer; look at CarFax, Kelley Blue Book or other third party marketplace for an assessment, and take it to CarMax for an offer. With three price evaluations you should have the true value of your car.
Read: Looking For the Ultimate Budget Ride? These are the 8 Best Cars Under $25,000
Negotiate Your Purchase and Trade In Separately
Even if you are trading in an old car for a new one, agree on your purchase terms separately from the trade-in. Then, agree on your trade in and subtract that from the price of your purchase.
While it may seem easier to do them together, or as if both are part of the same equation, it’s not; the process can cloudy the transaction or allow the dealership to hide fees or upcharges. Do these transactions separately so you know exactly what you’re getting for your old car and what you’re paying for your new one.
Then: The Shopping. Figure Out What You Really Want and Need
This is harder than it looks, and may take some time to look at and test drive new cars. Give yourself time, do the research on things that matter to you and watch a lot of videos to really get a feel for features you may want, or may not want in your new car.
Once you decide on certain features or a certain type of car, cross-shop the entire category. Just because your friend loves her Ford Explorer doesn’t mean its the perfect car for you.
Shop Around, and Not Just Around Town
This is the one thing that trips up a lot of buyers. You can actually shop for a car anywhere in the country. If you find the car you want, or a great price, at a dealer a few states away and are willing to go get it, you can not only get exactly what you want but get a better deal than the dealer down the street is offering.
One you have an offer from one dealer, you can ask dealers closer to home for a counter offer; you may get it. And, if the car you want is at a dealer far away, you can always have it shipped. This may add $1,000 or so to the price of the car but if you’re saving $5,000, or simply getting the car you need, it’s worth it.
Look For Extras That Sweeten the Deal
Even with prices impacted by tariffs and inflation, there are great cash-back deals on many cars right now, low interest rates offered by the car makers and other added-value goodies such as student discounts, military pricing and other incentives that can soften the blow of a big purchase.
Look closely at the fine print to ensure you qualify, and only go for those if the car itself is the right car for you. But if it is, incentives may turn your purchase in to a sweet deal.
Buy a New Car On Line
This is something we were not able to do before the pandemic but now there are many ways to buy a car on line. Many car dealers will do all the paperwork on line and even deliver the car to you so you never need to go to a dealer to complete the purchase.
You can also buy a Hyundai from Amazon. The car will actually be delivered to you from a local dealer, but Amazon negotiated the pricing and features for you so it’s a pretty transparent transaction.
And then, you can buy a used car from a vendor like Carvana or DriveTime. These companies allow you to shop and purchase on line and will deliver the car to you or allow you to pick it up when it’s ready for delivery.
Buy Out Your Current Lease
This is one of our favorite buying options for a “new” car: buy the leased car you’ve been driving for the last three years. You can finance it through your bank, the dealer who leased the car to you or the carmaker’s finance arm. Look at your lease agreement for a buyout price and compare it to the market; if it’s priced competitively or lower than what the car would cost used, and the car fits your needs, it can be a very good deal and will save you the headache and frustration of car shopping.
Is Your Current Car Worth Repairing?
This is the question many of us find ourselves asking: Should I fix it or replace it? There are several things to look at: the cost of making current repairs; the cost of likely future repairs and the cost of scheduled maintenance. Add also the cost of insurance, the cost of fuel and any other expenses you regularly incur.
Then, compare those costs to what you’ll get for your trade in, how much you’ll need to put down in addition, the price of insurance and your monthly payment. You may find that a new car with a $500 monthly payment, in the end, will be cheaper over the next few years than major repairs that still leave you with an older car with a lower residual value.
Get a Second Opinion
When trying to figure out if you should repair your car, get several opinions: Ask your local mechanic, ask your dealer’s service tech, and perhaps ask the question of owners groups; you’re probably not the first person to have this issue with your car.
We love Repair Pal for diagnosing issues and pointing us to a good mechanic who is familiar with our car and its repair needs.
New or Used? How to Tell
Very often, budget alone can be the deciding factor: Can you get a better car with more features that has some miles on it for the same price as a new car that isn’t as nicely equipped? Some things to consider: A new car and its warranty deliver more peace of mind; new cars typically come with lower interest rates; even the lower entry-level trim models can be pretty loaded with nice features, and these may outweigh the fancier options on a used car.
If you do decide to shop a used car, look carefully at the features on the car and make sure you’re getting what you want, look at the CarFax or vehicle history, and have it inspected by an independent mechanic to ensure it hasn’t been flooded, crashed and that it’s key systems are in good working order.
There are a lot of great options out there right now, so just because the news of tariffs and inflation is a little scary, buying a new car doesn’t have to be.
More About:Car Buying