Buy an expensive car without spending more

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Everyone’s looking to save a few bucks these days, whether you’re buying a big or a small car.

While the cost savings is substantial on less-expensive cars, many people will want more features that they have to offer. For those with finer tastes, there are a couple of strategies for car shoppers to “find” some extra money to buy a more expensive car without getting a larger car loan or using precious savings.

Let’s say that a $500 monthly payment for a three-year car loan at the current national average for interest appeals to you. There’s just one problem: You want a car that costs more than the $16,500 you would be financing at those terms — and you don’t have any savings to put down. What can you do?

First, determine what your current car is worth. Check the value at several third-party car information websites such as, Kelley Blue Book or, and print out the results you get from each site for trade-in and private-party sales. If your current car is paid off, then the entire amount of the sale or trade can be applied to a more expensive car.

Even if you still owe on your current car, you’ll “find” some money to put toward your new car in the form of the equity you’ve created in it as long as you’re not “upside down” in your current car loan.

You’ll almost always get the largest amount for your current car if you sell it yourself in a private-party sale versus trading it at the dealership. The difference can easily be $1,000 or more. Selling the car yourself will require some extra legwork on your part, but it’s worth it to get the extra cash.

Next, do some research on the manufacturer’s rebates, dealer’s incentives and “personal discounts” for certain groups of car buyers that are being offered on the more expensive car you want. Visit the manufacturer’s website to see any current cash-back rebates that are offered and check to see if the manufacturer is offering any personal discounts, such as for car buyers who are students, military personnel or certain professionals. These discounts can be combined with each other and the larger cash-back rebates.

Then use a third-party car information website to research any dealer’s incentives — cash offered to the dealer by the manufacturer for selling a slow-selling car. A dealer can share this incentive with the buyer in the form of a further discount, but only if you know to ask for it.

Rebates and personal discounts from the manufacturer as well as dealer’s incentives frequently add up to $2,000 or more, so taking this available cash discount is often a better choice than using the manufacturer’s low-interest financing. To determine which is the best deal for you, use Bankrate’s car rebate vs. low-interest calculator.

By selling the car on his or her own, and by going after available rebates, discounts and incentives, a car shopper can easily “find” at least $3,000 — often $5,000 or more — while not spending any savings and still financing the same $16,500 in the original scenario. At $5,000, that’s the difference between a Toyota Matrix and a very nicely equipped Toyota Camry, for example.

While car shoppers may opt to spend all of their “found” money by buying a more expensive car, keep in mind that it’s financially best not to finance the taxes and fees associated with your purchase but to pay for those upfront. So part of this newfound money should ideally be allocated to those costs.

Finally, the cost of ownership on the more expensive car is going to be somewhat higher, so figure those costs into your budget before you make your purchase.

Ask the adviser

If you have a car question, e-mail it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories.

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