Inflation is an increase in the prices of goods and services, and it can significantly impact your finances – especially if you’re in the market for a new car. Whether you’re pre-approved for a car loan or not, there are several important factors to consider when shopping during periods of inflation.
To start, it’s essential to understand your budget and the financial situation clearly. This means looking at your current income and expenses and any future obligations that may impact your ability to take on a car loan.
When inflation is high, the purchasing power of your dollar decreases, which means you’ll have to spend more money to buy the exact car you could have purchased last year. Here are a few tips to help you save money when shopping for a new vehicle during economic inflation.
1. Do Your Research
Before setting foot on a car dealership lot, it’s essential to do your research to know exactly what you’re looking for and how much it should cost. Use online resources like Kelley Blue Book or Edmunds to get an idea of how much specific models are selling for in your area, and don’t be afraid to shop around at different dealerships to get the best price. Remember, during inflationary periods, dealerships will try to make as much money as possible, so it’s essential to be informed buyers.
Don’t forget in your process to ask the dealership to show you maintenance records and documentation of recalls having been dealt with before you purchase. These factors are more about the safety of your family than economic benefit.
2. Consider Buying Used
One way to save money when buying a car during inflation is to consider purchasing a used car instead of a new one. Not only will this allow you to avoid the initial depreciation hit that occurs when a new vehicle is driven off the lot, but it will also give you more negotiating power since dealerships are typically more motivated to sell used cars than new cars. When considering a used car, be sure to have it inspected by a certified mechanic before making any decisions.
3. Look for Manufacturer Incentives
Many automakers offer vehicle incentives to boost sales during inflationary periods, such as cash-back rebates or low-interest financing. These incentives can go a long way in helping you save money on your purchase, so be sure to ask about them when negotiating with the dealership. Manufacturer incentives are typically advertised in dealer showrooms or on the automaker’s website, so they’re easy to find if you know where to look.
4. Get Pre-Approved for Financing Ahead of Time
If you’re planning on financing your vehicle purchase, getting a pre-approved car loan from your bank or credit union before heading to the dealership is wise. This way, you’ll know exactly how much you can afford to spend and won’t be tempted by dealer financing offers that may not be in your best interest. Getting pre-approved for funding takes some of the negotiating power away from the dealer and puts it back in your hands – which is always a good thing during inflationary periods.
5 Pay Cash If You Can
Paying cash for a car is always the best way to save money since you won’t have any monthly payments or interest charges eating into your budget. If you can’t pay cash outright, try to make as large of a down payment as possible to keep your monthly payments low. This will help keep your overall costs down and allow you to stretch your budget further during these inflationary times.
6 Budget Carefully
When shopping for your new car, remember to budget carefully during your ownership. You’ll be paying a monthly car payment but are also fully expected to keep adequate insurance and up to date with routine maintenance while you have the car. Make sure you also account for these additional costs when budgeting so you’re not surprised by any extra expenses down the road.
Bang for Your Buck
Follow these few simple tips, and you’ll be sure to save money next time you’re in the market for a new car – no matter what the state of the economy is! During economic inflation, you need to get the most out of every dollar, and since the dollar has lost value during inflation.
Do your research ahead of time, consider buying used, look for manufacturer incentives, get pre-approved for financing before going to the dealership, and try paying cash if possible. With these tips in mind, there’s no reason why inflation should stand between you and your dream car!
