best tips for buying a car in 2015

How Your Idiot Neighbors Will Help You Save On A Car In 2015

A funny thing happened during the Great Recession: New car prices dropped and used car prices rose.

Cash-strapped Americans who needed a new ride cruised right past new-car lots, which forced panicky manufacturers to slash prices. Instead, Americans bought used, which increased the demand — and thus prices.

This year will be different, experts say, and that could benefit debt-ridden Americans who need new wheels.

New cars sales will soar this year, analyst John Murphy recently told an industry gathering called the Automotive News World Congress. Murphy predicted 17.3 million new vehicles will be sold, compared to 16.5 million last year. He expects the trend to continue through 2018.

One reason Americans are buying more new cars: They feel like it. A national study by car-buying site found more than 3-in-5 recent new car buyers bought “out of want, not need.”

AutoTrader’s CEO Jared Rowe was giddy at the results: “When consumers start to make big purchases out of desire rather than necessity, they are clearly showing more confidence about their personal financial situations.”

Or they’re acting like idiots and overspending on something they don’t really need. That’s good news for the rest of us. Here’s how…

1. Buy used

Used car prices are dropping, according to the NADA Used Car Guide. One reason is “a higher used vehicle supply” — in other words, lots of idiots are buying new cars they don’t need, so used cars are going unsold. NADA predicts used vehicle prices will drop  2.5 percent this year. But that’s just an average: Mid-size car prices will drop by 4 percent, while compact car prices will drop 6 percent.

That doesn’t hold true for used trucks, however. Low gas prices mean more big truck sales, so expect an overall price increase of 5 percent for mid-size and large pickup trucks.

2. Open your mind, not your wallet

Another stupid reason car buyers will spend too much this year, according to another AutoTrader survey:

 In 2015, 72 percent of recent car buyers reported that they purchased the vehicle they had in mind when they first visited a dealership. This is a statistically significant increase from the 66 percent who reported doing so in 2014.This increase is being driven by used car buyers, who exhibited the largest change year-over-year.

That’s right. Otherwise intelligent adults telegraphed exactly the kind of car they wanted and didn’t budge. You can save by being smarter than that. But how do you know what models to look for?

3. Buy cars for those with bad credit publishes an annual list of the best new and used cars for “sub-prime” buyers. Sub-prime auto loans account for more than half of used car sales and a quarter of new car sales.

The most recent list, released last March, doesn’t have the flashiest cars — but it does shows you what people like you consider affordable and dependable. At the top of the new car list were the Dodge Avenger, Kia Optima, and Kia Forte. The most popular used cars were the Nissan Altima, Chevrolet Silverado 1500, and the Ram 1500.

If you can wait, a new list should be out in just a few weeks.

4. Fix your credit first, if you can

Bad credit is obviously bad for buying a car, but few people realize how bad. There’s clear evidence you’ll pay a lot more money for a car.

For example, those with the highest credit scores can pay less than 3 percent interest on a new auto loan, while those with scores at 569 or below (a textbook “bad” credit rating) can pay up to 19 percent APR on an auto loan. Someone with a “fair” credit rating (620-699) buying a $20,000 vehicle with a 5-year loan will pay about $2,200 more than someone with a “good” rating (700-779) buying the exact same vehicle.

It’s worth it to correct damaging mistakes on your credit report before you buy the car. Start by using to request a free copy of your credit report from one of the three credit bureaus: Experian, TransUnion, or Equifax. You won’t be able to see your credit score, which lenders use to make the decision, but you’ll be able to see what’s wrong and what needs improvement.

Conclusion: Supply and demand affects the prices of everything we buy. Fortunately, when other people overspend, we can benefit. It just takes some self-control not to follow the herd right over the cliffs of financial insanity.

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