Buy used or certified pre-owned
Potential savings: $15,104 on average (as of publication)
Since new cars lose around 20% of their value in the first year alone, you can shave thousands off your purchase price by buying a used car instead. If you’re worried you’ll end up with a lemon, consider getting a certified pre-owned car from the original manufacturer. These cars are thoroughly inspected and often come with extended warranties.
Want a new car without a long-term commitment? Consider
leasing a car.
Improve your credit
Potential savings: $2,316 on average (as of publication)
When you improve your credit score from “fair” to “very good,” you’ll save an average of $2,316 on your car loan and over $39,000 across different types of credit, like credit cards, personal loans and mortgages. Lenders offer lower rates to borrowers with high scores and a history of on-time payments, which translates to thousands of dollars of savings across your lifetime.
Look for rebates and deals
Potential savings: Several thousand dollars
Manufacturers sometimes offer special car rebates or discounts to encourage people to buy their cars. Rebates are typically discounts on particular car models or for a specific group of people, like college grads or teachers.
If you have excellent credit, you may be able to snag a 0% APR deal, meaning you won’t have to pay interest on your car loan. It’s unlikely that you’ll be able to combine 0% financing with a rebate, so use our car loan calculator to see which option will help you save more money.
Make a bigger down payment
Potential savings: Hundreds of dollars
It may seem counterintuitive to spend more upfront to save money. But the more you put down for your car, the less you’ll have to borrow — and the less money you’ll pay in interest. Plus, making a larger down payment can help you qualify for a car loan with bad credit.