How to Buy a Cheap New Car (Tip 7 of 10)

TIP 7: Have your finances sorted

There’s no point merely going with the flow inside the new car dealership, and taking them up on their finance offer – at least not without first shopping around for the finance, if only to convince yourself what terms, conditions and rates constitute a good deal.

Dealerships are paid a hefty commission to convert buyers to the company-preferred financier – so there’s a lot of incentive in it for them to get you to sign up. You can use this as a bargaining tool: ‘I’ll take you up on the finance, but you’ll need to give me [insert demand here]’. Or you might be able to arrange better financing on your own.

Me? I’d want to walk into the new car dealership with the money ready to rip – effectively able to write a cheque within 24 hours, if not on the spot. This puts you in an even more compelling position when bargaining at the end of the month – ‘here’s the money; I want that car’. Any salesman with an IQ over the room temperature (in degrees C) would be a mug to let you walk out the door, especially if the dealership needs a few crucial sales to get it across the line at the end of the month.

Talk to your financial adviser, because there is more than one form of ownership for cars (hire purchase, chattel mortgage, etc.) and factoring in your own circumstances is vital to choosing the form of ownership that most benefits you from a taxation and straight financial perspective.