Car Loans | Couple Wealth
Affiliate Disclosure: This article may include affiliate links and we may receive compensation if you click, at no cost to you.

People trying to sell you a new car want to make money and they often try to upsell you on features you don’t need. I had made this mistake when I bought my first car. I was too impatient and ended up buying a car which was a bit on the expensive side.

When you are buying a new car, there are a few ways to save money, even if you go for your dream car. As one of the biggest purchases in your life, selecting the right financing can be extremely important.

We will go through some of the best ways to save money and get the best deal on your next car.

Negotiating the Best Sales Price

The easiest way to save money on your next car is to make sure that you are paying the lowest cost possible. If you can get by with a a used or certified pre-owned car, you will save money right away.

No matter what you buy, always negotiate the sticker price at dealerships as you could save quite a lot of money. Ask for any deals or discounts that they might have available. Don’t buy right away and come back later to see if they might be more flexible in pricing.

By looking at multiple car deals, you can choose one that is cheaper and more affordable. Often people go for the first or second car they see but you should be patient in the fight for saving money.

Choose the Best Auto Financing

The key to success in buying a new car and not going overboard is first getting a fair loan offer at the dealership. People often forget or completely ignore the cost of auto financing in the total price.

The interest you pay on a car loan can add up quickly if you’re not expecting it.

A great example I read on MoneyUnder30 was that “if you then finance the car for four years at 6% with nothing down, you will pay over $2,000 in interest. Financing the car for three years at 4% with a $1,500 down payment, however, can save you over $1,000.”

Often, dealers try to get done with the paperwork as quickly as possible to sell their cars. However, you need to refrain from doing that and instead search for multiple lenders.

Take the time to visit them to negotiate with them for better deals. This way, you will get the best out of your deal for the car you want without having to break the bank.

There are loads of tools online, including places like Monevo, where you can search up different deals and choose the best deal that you think will help you save money. Plus, it is a completely free tool to use.

Tips to Financing a New Car

If you think cars are a good investment, I am afraid you are very much wrong. Cars have a pretty lousy resale value since they depreciate very fast. The moment you drive a new car off the lot, it loses its resale value.

This doesn’t mean that you should not buy a car because many of us need cars to travel to our jobs or drop kids at school. As long as you need a car for travel, it makes sense to make the investment.

One of the essential tips is NOT to pay interest on your car loan. The big reason is that, each year, your car’s value decreases by a certain percentage.

For example, if your car is worth $5,000, it might have a depreciation rate of 5%, and next year your car would be worth $4750. So when you pay back your loan with interest, you face a term known as negative equity. This is when you pay more than what something is worth, in this case, a car.

Most of us do not have cash lying around for us to spend on a car, so we take out a car loan. But, this does not mean we should start buying cars we can not afford or pay back.

This is another form of debt trap you could face. Why not avoid it altogether. You need to make a budget and try to access the financial situation.

Ask yourself the question “Can I afford a car?” or “Can I afford a Mercedes?”. As much as you might want the Mercedes, it might be a better idea to settle for a Toyota.

How to Finance a Car and Save Money

Financing a car can come at a significant cost, which is why you should try to get the best deal possible. Here are a few ways to save money on your automobile financing.

1. Improve Your Credit Score

The question is can you get a car with a bad credit score? Yes. Do I advise getting a car on a bad credit score? Not if you can avoid it!

If you have a bad credit score, you will end up paying way more than you need to. Lenders charge higher interest rates to people with low credit scores because they are riskier loans.

Having a good credit score will help you get better car loans and prevent them from charging higher interest rates. If your credit score isn’t great, take some time to see if you can improve it to save on your car loans.

Credit Karma is a free tool to check your credit score, which will help you determine where you stand in getting a car.

2. Use Online Lenders

Everything is shifting online, and so are the car dealers. You have to submit a credit application, after which the car dealer or loan shows you a deal they are willing to offer you. It is often much easier to get accepted for a loan online, especially with bad credit.

You could also use the online loan service or dealership as a benchmark for future deals and offers, and you could use it to your advantage to reduce prices and get better deals off cars. It is a smart way of looking at things without having to run around car dealerships.

3. Shorten the Term of Your Car Loan

The shorter the loan period, the lower the interest rate, and that is what you should be aiming for precisely. However, before this, you have to create a budget and find out what you can afford for a car.

Dealers often come up with attractive deals that may seem to be less expensive on the surface. This may include offering a lower purchase price for the car but at a higher interest rate spread over a long period.

It might be tempting to get a so-called “cheaper” deal, but in reality, it is not any cheaper with interest. This is why it is essential to be mindful of the true cost of a car loan.

4. Make a Larger Down Payment

Having a down payment is a good way to reduce the overall cost of your vehicle by reducing the amount of interest you pay. A lower loan amount helps to reduce your debt and the interest paid.

Let’s say you are buying a car for $15,000. It is possible to get loans with $0 down, but then you have to pay interest on the full $15,000. However, if you have a $5,000 down payment, you can reduce your interest you have to pay.

Whenever possible, try to increase your down payment to the maximum that you are comfortable with to save money. The only exception would be if you can get a loan for $0 down and 0% interest.

5. Get Gap Insurance

According to, “Gap insurance is an optional car insurance coverage that helps pay off your auto loan if your car is totaled or stolen and you owe more than the car’s depreciated value.”

For example, if you crash your car and still owe around $5000 on your loan, the insurance company will only cover $3000. In short, you lose money and are without a car if you don’t have gap insurance.

The best place to get gap insurance will be online, or contact your auto insurance agent about it. Getting gap insurance is a great idea if you have a large balance on your auto loan and are not expecting to pay it off right away.

6. Pay With Cash

I would recommend paying extra costs such as taxes, fees, registration fees, or extras by cash. The main point is not to add more cost to your already expensive car loan by paying interest.

Although it is a little harder at larger dealerships, it is sometimes possible to negotiate a lower sales price by paying for a car with cash.

Paying the full amount upfront will also help you avoid paying interest and other fees that might be associated with a loan.


Car financing can get expensive if you don’t fully understand how they work. Take the time to research your car loan options and pick the best lender for your situation.

Try to make a down payment and keep your overall loan as loan as possible. Keeping your interest rate to the minimum will also be important in saving money on your new car.

Similar Posts