Cheapest Way to Buy a Car

Buying a car is one of the largest purchases you’ll make, so it’s always a good idea to try to pay as little as you can. Paying less for a car doesn’t mean you need to sacrifice reliability; you can find plenty of bargains on good cars. There’s no golden rule when buying a cheap car, but you can use a lot of different strategies when browsing for a new vehicle.

Buying used is almost always cheaper than buying new. Modern cars are built better than older cars, so when you buy used you’re typically not buying a car that’s going to break down in a year. New dealers often sell used cars that come with dealer warranties that cover most major problems for a certain period of time. Used car dealers usually sell older model cars and sell the vehicle “As-is,” which means you’re not covered if anything goes wrong with the car. You can also completely bypass financing costs with used cars if you have the cash to purchase the vehicle outright.

If you decide to buy a new car, opting for the lower level trim will save you thousands of dollars. Each car model comes in different styles of trim, which essentially means that one car model has better features and technology than another. Most models come with two to three levels of trim, with the lowest level costing the least amount of money to purchase. You’ll often forgo power windows and locks, special features such as a temperature gauge and safety features such as traction control, but your wallet won’t take as much of a hit.

If you’re stuck between buying a car and leasing one, choose the lease option to save money. Leasing means that you’re basically borrowing the car for an allotted amount of time, which is typically two to three years. Once your lease term is up, you return the car to the dealer. You only pay for the depreciation costs of the car plus finance charges. For example, if you leased a $15,000 car for two years, and the estimated resale value was $9,000 after those years, then you would pay the depreciation costs of $6,000 plus finance charges.

Auctions can be a gold mine if you know how to bid effectively and snag a great deal. Auctions can consist of police auctions, government auctions and just general car auctions. The downside of an auction is the cars come with no warranties, and it’s impossible to judge the exact condition of the car before you purchase it.

There’s nothing cheaper than free. Some companies offer free cars to applicants who apply for the free car program; the catch is you’re driving a car that’s littered with advertisements. Free car programs are usually available in large cities or universities. The entire point of the car is so that the advertisements will generate attention.

Rental companies regularly sell their old rental vehicles for far cheaper than you’ll find on a dealer lot. The only problem with the bargain is you often have no idea if the car is actually in good shape or if there are underlying problems. Rental cars also suffer from past drivers who pushed the car beyond its limits and didn’t take care of the vehicle.

You’ll usually find better deals from private sellers than you will on a dealer lot. Buying from a private seller means that you’re buying used, and that can lead to the proverbial question of why the person is selling the car. Many people sell their vehicles privately because they can get more for them than if they traded them in, but others will sell their used cars because there is a major defect in the vehicle. If possible, take the vehicle to a mechanic before you dish out the money to the seller.