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We’ve all heard terrible stories of car salesmen charging more than a car is worth. We’ve also heard of excellent bargainers shaving hundreds (or even thousands!) off of a car’s sticker price. Buying a car is a major purchase, so it’s important to calculate a budget you can afford, put in the necessary research and be prepared to negotiate the costs and terms.

1. Get Educated

It’s important to know how much car you can afford and then look for cars in your price range that serve the functions you need and want. You can check around among manufacturers or auto sales sites to see the market value and find a good deal. Spending some time online can save you lots of money in the long run.

2. Time the Market

If you plan to buy a new car, consider purchasing an outgoing model when new models first come out, advises TrueCar.com, an automotive pricing and information website. This is typically in late summer or early fall. For example, most 2016 models will go on the market between August and October of this year. That may be a great time to buy a 2015 model. You can also sometimes get a better deal on cars, both new and used, buying at the end of the month, if sales employees are trying to meet their quotas.

3. Bring Your Own Financing

If possible, it’s a good idea to get pre-approved for your auto loan by your financial institution before you hit the dealership. A pre-approval should last about 60 days — plenty of time to find the right car and close the deal. After negotiating the vehicle price, you can ask the dealer if he or she can provide a better offer on the financing.

4. Beware Dealer Strategies

Car dealers use all sorts of strategies to squeeze more money out of your car purchase. To avoid paying more than you should, it’s a good idea to check your credit report ahead of time and use that research you’ve done to push back on any claims that don’t seem right. (You can get a free credit report snapshot from Credit.com.) Be on special alert for the “bait and switch,” where dealers agree to offers or discounts that are later lost or vetoed by the manager.

5. Negotiate Everything

The most important thing about buying a car is realizing that everything from warranties to loan interest is negotiable. It’s important to think about the whole cost of the car, though, and not just monthly payments. A dealer may be able to get you lower monthly payments that will fit into your budget but extending the loan term means you will end up paying more in the long run. In this case, the term of the loan might outlast the car — and that’s a situation you definitely want to avoid.

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