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How To Save The Most Money On Your Next Car Purchase

If it's almost time to buy a new car, don't rush off to the dealership just yet. It pays to plan ahead and do some research before you make that big purchase, and it's too easy to get caught up in the excitement of shopping for a new car and get roped into paying more than you should. Here are some tips to help you save the most money on your next car purchase.

Choose used

This really is a no-brainer. Not only do used cars cost less than new ones, they don't lose 11% of their value the minute you drive them off the lot, according to Edmunds' calculations. Don't think that used cars are of any less quality than new ones, either. Thanks to people who trade in cars frequently, there are many great newer model cars only a few years old sitting on car lots across the country. You just need to get out there and find one, and you'll be ahead in the savings game.

Avoid franchise car dealerships

Although you can find great used cars at franchise car dealerships, it can be harder to save money there. Independent used car dealerships, on the other hand, can be a great place to save on your next car. There tends to be a wider variety of cars to choose from at an independent dealership, and if you shop at one of the "used car superstores," you have a very good chance of finding something that's within your budget. 

One caveat with independent dealerships: if you finance your car through them, they tend to be higher than franchised dealerships. It might be cheaper to finance through your bank or credit union than to take on financing at the independent dealership's rates.

Buy from an individual

This can be the least expensive way to buy a new (to you) car, but it's also the riskiest. Make sure you can verify the car's history and have a trusted mechanic give it a full inspection before making any deals.

Pay in cash

Even better than finding a cheaper used auto loan, paying in cash can make a huge difference in your savings. Many independent auto dealers will be happy to offer a discount for paying in cash, so be sure to ask. This may mean saving up your money for a while before you can afford to buy a car outright, but it also means no car payment hanging over your head and no interest to pay. If you offer to pay an individual in cash, you could see substantial savings. 

Time your purchase just right

There are certain times of the year when you may get a better price on the vehicle you want with very little haggling at all. In the summer, car dealers in your area may sell off their 4-wheel-drive vehicles at a discount, since the cars generally aren't in demand until the winter. Also, shop at the end of the month, when sales people are more likely to be flexible with the pricing in order to meet their sales quotas. Also, if you plan on using a tax refund to buy your car, wait. Many dealerships take advantage of the influx of ready buyers during the tax refund season, and the choice of cars on the lot could be reduced, too.

Know the true value of the cars you look at

Thanks to smartphones, you can now walk onto any car lot armed with the ability to see approximately what each car is worth based on blue book values. Apps that let you compare prices and even check a car's history using the VIN number mean you'll never have to wonder if that great deal you're getting is just a lemon in disguise.

Check out sites like to start searching for used car dealers near you.