Premium styling. Flawless paint. Glistening tires. That unmistakable new car smell. Everything about a new vehicle practically begs you to buy it. When you close your eyes and think about driving your brand new set of wheels off the lot, it quickens your pulse a little, doesn’t it? Shopping for your next vehicle is a uniquely exciting experience. Usually until you look at the price tag, that is.

If you haven’t priced cars recently, you may be surprised by the figures you find. According to a recent report by Edmunds, the average loan amount for a new car jumped to more than $32,000, and the average monthly payment rose to $558. Sure, the latest models may be nice, but facts are facts—that’s a lot of money to pay for a car.

Now, before we go any further, if you’ve been saving up for your dream car and figured out how to buy it without demolishing your budget, then by all means – go for it! But if you find yourself in the market for a new vehicle and you want to avoid overspending, we’ve got five tips to help you hang onto more of your hard earned money.

5 Ways to Save Money When Buying a Car

Do your research.

The last thing you want to do is show up to a car lot with no idea what you’re looking for. Lack of preparation puts you at the mercy of the salesperson. And while they may be genuinely nice people, sales professionals make their living by getting you to buy a product at the highest price possible. So, before you head to a dealership, narrow down your choices by doing your research. Thanks to the Internet, companies like NADA, Car and Driver, and CarsDirect can help you sort thousands of options by everything from location to price to trim packages.

Get preapproved. ​​

Once you’ve determined which vehicle fits your preferences and meets your needs, it’s smart to get preapproved for financing. There’s a good chance you’ll find better financing rates through your local credit union than through another lender. Once you’re preapproved, you’ll know how much you can afford, what interest rate you’ll pay, and what your monthly payments will be. This information gives you the upper hand in price negotiations and keeps you from getting distracted by dealer tactics that focus strictly on monthly payments. Preapproval lets you negotiate based on the most important aspect—price.

Shop for incentives.

When sales are lower than expected, automakers will often extend money saving incentives to encourage buyers to purchase their vehicles. This is an instance where the manufacturer’s loss can be your gain. If you’re not already loyal to a particular make or model, you may be able to take advantage of dealer incentives such as discounts, rebates, and lower APR on financing. If you are loyal to a specific type of car, that can work in your favor as well, as some car companies will offer customer loyalty incentives to encourage you to keep driving their cars.

Ask for a lower rate. 

There are plenty of books, websites, and podcasts that offer tips and tricks on negotiating more effectively. While most of their ideas have merit, there’s one suggestion that may seem a little too simple and straightforward—ask for a better deal. In most cases, a dealer or salesperson will start negotiations with an offer that benefits them the most. Asking them to do better is part of the game. To give yourself the best chance of success, be polite and be prepared to walk away. Some dealers will play hardball, but when they have an interested buyer (especially one with preapproved financing), most would rather sell a car for a little less than let it sit on the lot and hope another buyer comes along.

Choose a used car instead.

Maybe this tip isn’t exactly a way to “get a new car for less,” but it is an excellent way to save money on your next vehicle purchase. Since most new cars depreciate an average of 20% in the first year and nearly 50% after five years, buying a preowned vehicle is a smart way to steer clear of that depreciation. It’s also worth mentioning that in addition to their lower upfront prices, used cars usually cost less to insure. Save now. Save later. That’s a pretty convincing sales pitch, isn’t it?

When you’re ready to start shopping for your next car, we’re confident that you can handle the research portion. But when it comes to the financing and preapproval, do yourself a favor and contact us here at First Financial. We may be able to offer you a lower rate and more flexible terms than a traditional bank or lender.* Give us a call today. You’ve got nothing to lose — except months of unnecessary interest payments!

*APR = Annual Percentage Rate. Not all applicants will qualify, subject to credit approval. Additional terms & conditions may apply. Actual rate may vary based on credit worthiness and term. A First Financial membership is required to obtain a First Financial auto loan and is available to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. See credit union for details. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan.