A couple of weeks ago a friend of mine went out and bought a new car. And although he got a good deal, he left a lot of money on the table. As you may have picked up from reading my articles, I’m all about getting you the most bang for your buck. Since 50% of America makes $50k or less, we really need to make those salaries stretch so we can still enjoy our lives on a budget.
My goal is to make you all professional ballers on a budget lol. So in the spirit of budget balling, below I give you 7 surefire tips that guarantee the next time you buy a car you don’t just get a good deal. You get a great one!
1. Get All Your Duck(et)s in a Row
For those of you that don’t know what duckets are, that’s 90s slang for cash, money, dinero. I may have just aged myself a bit lol. But on a serious tip, if you’re thinking about buying a car, you really should endeavor to have your financial situation together. Buying a vehicle is a long term commitment, and you shouldn’t rush into it. And you definitely shouldn’t purchase one out of desperation (nothing good comes out of emotional spending).
If you really want to get the most bang for your buck, I recommend above all things that you work on raising your credit score above a 700. I heard John Hope Bryant, founder of Operation Hope, state that “nothing changes your life more, other than God or love, than a 700 point credit score.” And he’s absolutely right. I know from experience that a good credit score really changes things for you. And it isn’t as hard to do as you may think. It takes time, but it’s not impossible. You just have to put your head down and grind it out. Trust me, it’s worth it. It took me two years to get my score above the 700 mark, but when I came out on the other side, I saw first-hand how having a good name can drastically change your life. If you haven’t already, definitely take some time to read my two articles on credit scores.
Once you’ve raised your credit score, I recommend either saving up 20% for a down payment (most dealers want at least 20%) or having a car to trade in. The last two times I just traded in a car and didn’t have to put down any money. But if you don’t have a car to trade in, I strongly suggest saving at least 20% of the car’s value for a down payment.
And last but not least, secure a pre-approval letter from a lender prior to visiting the lot. My mom once told me that’s as good as going to the lot with a cash offer. And she was absolutely correct. For my most recent car purchase, I went to the lot with a pre-approval letter and ended up getting $7,500 off my purchase price. Cash buyers always have a better bargaining position with dealers. Try it out for yourself and see.
2. Be Purposeful About What You’re Looking For
I once heard that if you don’t know where you’re going, every road will take you there. That’s something I think is true and applicable in so many areas of life, including car buying. One of the biggest mistakes I think people make is going to a lot and not knowing what it is they really want and/or need.
Before you show up to a dealership, you should already have in mind what’s important to you. Are you concerned with the features in a car (Bluetooth, gps, back-up camera, etc…)? Is the aesthetic value of the car really important to you? Does the car have to be economical? If so, what’s the lowest miles per gallon that you’ll find acceptable? Is the MSRP of great importance to you? If so, what’s your price range? Are you a $20k buyer or a $30k+ buyer? All of these questions should be answered before you even step foot on a lot, so you can narrow down which “roads” to take.