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How to Buy a Car in 2024 and Get the Best Price
Purchasing a car in 2024 can be an overwhelming process, with changing market trends, financial considerations, and a variety of factors to consider before stepping into a dealership. Understanding how to buy a car in 2024 can make getting a great deal more attainable if you follow a strategic approach. This guide will help you navigate each step to secure the best price on your next vehicle.
Step 1: Understand the Current Market
The landscape of car buying has changed significantly in recent years. Before the pandemic, inventory levels were much higher, but they plummeted to an all-time low during 2020-2021. However, 2024 has seen a shift back toward pre-pandemic inventory levels. With nearly 3 million new vehicles available each month, the industry has moved from a “seller’s market,” where sellers could dictate higher prices, to a “buyer’s market.” This means there is more room for negotiation, as dealerships have more cars on the lot and are increasingly willing to offer incentives to attract buyers.
Furthermore, as you consider how to buy a car in 2024, keep in mind that interest rates, which have been high in recent years, are finally beginning to stabilize, with the U.S. Federal Reserve recently lowering its rates. This could translate to more favourable rates for car loans in the near future. As competition among dealerships heats up, potential buyers may find more incentives and financing deals, making it a good time to consider purchasing if you’ve been holding off.
Step 2: Review the Used Car Market
If a new car isn’t on your radar, the used car market also has its own dynamics to consider. Used car prices reached record highs over the past few years but have now begun to drop. However, due to limited lease returns (down by approximately one million vehicles), there is still a degree of scarcity in certain segments, particularly for two- to three-year-old used cars. As a result, these near-new used vehicles might still command premium prices, and buyers might encounter less room for negotiation on high-demand models.
For those financing a used vehicle, it’s worth noting that interest rates on used car loans are still relatively high—around 14% on average. Staying aware of these rates and negotiating down where possible can save you significantly over the loan’s lifespan.
Step 3: Calculate Your Budget
Before deciding on a car, establish a clear budget based on what you can afford. A good rule of thumb is the 10% rule: do not spend more than 10% of your gross monthly income on total car expenses, including the loan payment, insurance, fuel, and maintenance. For example, if you earn $5,000 monthly, aim to keep your car expenses under $500. After accounting for insurance and other expenses, this would leave you with around $400 per month for a car payment.
To understand what price range this allows, speak with your bank or credit union to find out how much they could lend you to keep within your target monthly payment. Let’s say they determine that $400 a month covers a $20,000 loan. If you also have $5,000 available for a down payment or trade-in, you’re looking at vehicles priced around $25,000, including taxes, fees, and other costs. This approach keeps you within your budget and avoids overspending.
Step 4: Conduct a Needs Assessment
It’s essential to identify your specific needs before car shopping. Consider whether the vehicle is for personal or business use, how many passengers you’ll typically carry, and any specific features or types of vehicles (e.g., SUVs for family use, compact cars for city driving) that will make your daily life easier. This “needs assessment” helps you focus on cars that truly meet your requirements instead of getting swayed by attractive but unnecessary features.
When visiting a dealership, be aware that salespeople will often perform a similar assessment to better “match” you to a vehicle. By completing this assessment independently, you can enter the dealership with a clearer idea of what you need and resist any sales tactics designed to push you toward pricier models or features.
Step 5: Consider Electric Vehicles (EVs)
Electric vehicles are increasingly popular, but they come with unique considerations. Evaluate your lifestyle to see if an EV is practical for you. For instance, assess the availability of charging stations nearby, whether you can install a home charging unit, and the cost of these installations. EVs have the advantage of being environmentally friendly and often have lower running costs, but they currently depreciate faster than traditional vehicles. If you decide to go electric, consider leasing rather than purchasing, as this allows you to benefit from EVs’ low running costs without worrying about the rapid depreciation.
Step 6: Start Your Search Online
Once you’ve decided on the type of car you want, begin your search online. Visit the manufacturer’s website to configure the model according to your preferences and get an idea of local inventory. Many websites, including CarEdge, offer search tools that provide information on inventory, pricing history, and insights into the fair market value of specific vehicles. This research will give you an advantage when it comes time to negotiate.
For used cars, take advantage of multiple online resources to compare prices across dealerships and gather data on the car’s history, how long it’s been on the lot, and how its price has fluctuated. This data is invaluable for negotiating the best price.
Step 7: Request Out-the-Door Pricing
One of the most critical steps in how to buy a car in 2024 is to request the “out-the-door” price when communicating with dealers. This price includes all fees, taxes, and any dealership-installed extras, reflecting the total amount you would pay if you were writing a check on the spot. Avoid discussing monthly payments or down payments at this stage to keep negotiations straightforward. Once you have the total price, you can then move to discuss financing terms that work within your budget.
When contacting dealerships, aim to communicate via phone or email initially rather than visiting in person. This keeps interactions focused on price and avoids unnecessary pressure from sales staff. Be prepared for dealerships to prompt you to “come in and discuss it,” but stay firm on getting the out-the-door price first.
Step 8: Pit Dealerships Against Each Other
To maximise your leverage, reach out to multiple dealerships and obtain quotes from each one. By doing this, you can use one dealer’s offer as a bargaining tool with another, encouraging them to offer a better price to win your business. The end of the month is an excellent time for car shopping, as dealers are often more motivated to make deals to meet their monthly sales targets. Starting this process around the middle of the month allows you to negotiate at your own pace, with the goal of closing the deal by month’s end.
Step 9: Finalise Financing in the Finance Office
Once you’ve agreed on a price, you’ll go through the finance and insurance (F&I) office, where the dealership will offer additional products, including warranties and protection plans. It’s wise to review all offers carefully and consider whether they truly add value to your purchase. To avoid surprises, try to secure pre-approval from your bank or credit union beforehand, so you know what interest rate you qualify for. In the F&I office, you can ask if the dealer can match or beat this rate, providing you with leverage for better financing terms.
Final Tips
To ensure you’ve secured the best deal possible when learning how to buy a car in 2024, double-check all paperwork before signing and make sure that all agreed-upon terms, rates, and fees are accurately reflected. Following this approach and being thorough with each step will give you the best chance at driving away with a great deal on your new or used car.
Want more? Click here for How Many People Use Online Platforms to Buy Cars? – Tech Drive Play
Zachary Skinner is the editor of TechDrivePlay.com, where tech, cars and adventure share the fast lane.
A former snowboarding pro and programmer, he brings both creative flair and technical know-how to his reviews. From high-performance cars to clever gadgets, he explores how innovation shapes the way we move, connect and live.
