Unless you’ve just won the lottery, you are looking for the best deal when shopping for a new or used car. Understanding how to get the best deal is essential to making sure you don’t break the bank.

Pay with Cash

As the old saying “cash is king” goes, cash has its perks, including when you decide to purchase a car. According to LifeandMyFinances.com, paying in cash increases your chances of getting your car for less than the asking price. Cash gives you a lot of purchasing leverage because the seller doesn’t have to wait for payment. Cash buyers will also save money because they don’t have to worry about paying interest on a car loan.

Invoice v. List Price

According to the Houston Chronicle, the list price is what you see when you look at cars on the lot or ask the salesperson and the invoice price is what the car dealer paid the car’s manufacturer. Based on their findings, room to negotiate can be 10 to 20 percent off the list price. Do your homework for the car’s make and model – information is readily available on the internet.

Go Beyond the Dealer

According to MyMoneyBlog.com purchasing a car from someone other than a car dealer has some benefits. Using Craigslist enables car buyers to find a good used car for a good deal. The website says that you have to use your judgment and ensure you get a good car. It recommends doing a thorough interview with the car’s owner, asking for maintenance records and giving the vehicle a test drive. Another ways to reduce your risk is to get a CARFAX report.

Consider a Repossessed Car

Purchasing a repossessed car can also save you money. With the prolonged economic downturn there is a greater selection of repossessed cars. Many of these vehicles are in great shape. Purchasing a vehicle this way could save you thousands of dollars, but there is a risk of improperly maintained vehicles. USA Today points out that there are dealers that specialize in repossessed only sales, which are a much safer way to have a vehicle inspected and available with some sort of warranty.

However you decide to purchase your next new or used car, you can save money by using this knowledge and applying it to your individual situation.

Photo by Emilio Labrador via cc