How Did We Get Here?

Today’s monumental gas prices are rooted in a few large causes such as the COVID-19 pandemic as well as Russia’s war on Ukraine. As a general statement, one might say that supply and demand have changed. So what can you do about it? Use our gas price calculator to find out how this will impact you.

Short-Term Things You Can Do to Potentially Save On Gas:

Use an App to Find Savings 

In this digital age, you can bet your bottom dollar that there are mobile apps that you can use to find cheaper gas or earn cash back on your purchases. Buying the cheapest gas in town means that drivers could save up to twenty-five cents a gallon.

• GasBuddy

GasBuddy is a gas app that could help you find more immediate savings. You don’t have to upload your receipt to receive the savings, and you don’t have to wait until you have enough built up to cash out. With GasBuddy, you get a card from them and you attach your bank account to it for that instant savings at the pump. And users like you can update the prices within the app for the most up-to-date information.

• Upside App

Upside is a cash back app that anyone with a smartphone can use to save money at the gas pump by earning cash back. Upside is a US based company that partners with some of the biggest gas, grocery, and restaurant brands in the nation, making it easy to earn cash back. Download the Upside App and earn cash back on your gas purchases.

• Gas Guru 

Have you ever filled up at a gas station to see a lower price at a station around the corner? Gas Guru can help. It shows gas prices with easy to read maps so you can zero right in on savings.

Gas Rewards Credit Cards

A more common way to save money on gas is to use a Gas Rewards Credit Card. Some of the best gas rewards cards offer great rewards to the card holders. It is important to not carry a large balance as you may end up paying more in interest fees than the rewards you earn from the purchases.

CashBack Credit Cards

Why not save on gas while you spend? You can pad your gas budget with cashback credit cards. Some cashback cards even allow bonus categories where you can highlight gas savings. If you use a cashback card in conjunction with an app like Upside, you can earn twice the rewards.

Pay with Cash Instead of a Card

Gas stations often charge more for card purchases because they are charged fees by banks and credit card providers for each transaction. When you pay cash, gas stations avoid these fees, and pass along some of the savings to you with a discount.

Fill Your Tank on the Cheapest Days of the Week 

Gas prices fluctuate day to day, but trends dictate that there are a few days that tend to be cheaper than others.
According to GasBuddy, a tech company that tracks real-time gas prices, Mondays and Fridays are proving to be the two cheapest days to fill up.

Change Your Driving Habits

According to FuelEconomy.gov, safer driving methods could boost your fuel efficiency by up to 40%. Abiding by the speed limit, accelerating slowly, and coasting more often could add up and make a significant difference in how often you spend money on gas. 

Long-Term Things You Can Do To Potentially Save On Gas:

Electric Vehicles (EVs) vs.  Hybrid Vehicles (HEVs)

Ditch filling up on gas altogether. Electric vehicles have a battery instead of a gasoline tank and an electric motor instead of an internal combustion engine. To put this into perspective the all electric Hyundai Kona Electric gets about 120 MPGe.

Conventional hybrids use their gasoline engines to keep their modestly sized batteries charged as you drive, with no need to plug them in, and virtually every major maker offers HEV cars, SUVs, and trucks.  These HEVs deliver a considerably better fuel economy than their nonhybrid counterparts in stop-and-go city driving because they can recapture energy while braking. For example, the Toyota Prius Hybrid gets on average 56 MPG.

Consider selling your car
Believe it or not, your used car could be worth more now than when you bought it a couple years ago, even though you’ve been driving it in the meantime. Experts predict that the average used vehicle price will surpass $30,000 this year. [Read more here]

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Fix Your Credit Report

Before applying for an auto loan, it’s essential to check both your credit score and credit report. Each of the three major credit-reporting agencies will provide you with one free credit report per year. If you find any errors on your credit report, try getting them fixed as soon as possible. Fixing any discrepancies in your credit report could increase your credit score and credit trustworthiness and help you secure a more competitive rate for a loan.

Try to Get Pre-Approved

Bad credit can make shopping for a car exasperating, especially when you find what you want and then lenders are simply unwilling to extend you a loan. By talking to your bank or credit union, you may be able to get pre-approved for a specified amount. This will help you know your budget without the uncertainty of being rejected due to your credit.

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Make a Larger Down Payment

Unfortunately, having poor credit means that the car loan amount available to you will likely be limited. Additionally, you will most likely face a higher interest rate if you’re approved. However, if you can afford to make a larger down payment, you could lower the loan amount and possibly negotiate a lower rate as a result.

Skip the Extra Features

If you’re buying a car with bad credit, you have to be realistic about the features you want versus those you need. By reducing the number of extra features—those that aren’t absolutely essential (i.e., leather seating; high-quality sound system, sport rims, etc.)—you could help lower the car’s total price and, likewise, the loan needed to pay for it. Reducing the amount of the loan you request will not only make it easier to repay on time, but it might also increase your likelihood of approval.

Apply for Assistance

There may be nonprofit agencies or government programs that provide auto loans to low-income consumers. These vary depending on your state, so it’s best to check to see what may be available. For example, in California, the statewide Clean Vehicle Assistance Program provides personal grants and affordable financing to help lower-income Californians purchase a used or new conventional hybrid, plug-in hybrid, or battery-electric car.

Keep these tips in mind if you’re looking to purchase a car and your credit score isn’t as high as it could be. Although challenging, finding a loan with bad credit is not impossible—it just may take more effort and planning.

Self-Check

Even if you’re somewhat inexperienced with cars and auto repairs, it’s important to do a basic inspection of the car. Some of the things you should check to make sure the vehicle is in good condition:

• Check the tire treads for excessive wear
• Check the headlights and floorboards for signs of moisture, which could indicate if the car has been in a flood
• Look closely at the paint job for signs someone may have painted over rust
• Drive the car with the radio off and listen for any strange sounds

If you proceed to buy the vehicle after your self-check, you could still protect against serious problems that may arise by getting an extended warranty.

Ask the Pros & Trusted Friends

To determine the quality of a used car, you should consider hiring a trusted mechanic who can conduct a thorough examination of the vehicle. Trusted mechanics may find things you didn’t notice such as structural issues or engine problems. They could raise questions you may not have thought to ask, and identify whether the car is driving the way it should. The cost of having a professional check the vehicle could end up saving you a great deal of money in the long run.

It’s also a good idea to bring a trusted friend or family member with you during the inspection and buying process. Someone who’s not invested in the outcome could be more objective than you under the circumstances, alerting you to an issue you may have missed or preventing you from making an impulsive decision.

Check the Records

All cars have a unique Vehicle Identification Number (VIN) that can help you determine the car’s history. Online services, such as Carfax, use the VIN to provide you with a detailed report of the car’s records. These records could tell you whether a vehicle has been totaled or how many times it has been in a collision. Only after checking the records, assuming your other inspections pass muster, should you then consider how you will finance the purchase.

Mistake #1: Buying the First Car You See

If you’re a busy person, it may be tempting to buy the first vehicle that meets your minimum requirements. Before you finance a car, however, it’s worth doing some comparison shopping to see if you’re getting a good deal. Take the time now so you can save time and money down the road. Websites such as Kelly Blue Book, NADA, and Edmunds can help you research and compare vehicles so you can narrow down the car options that may be right for you.

Mistake #2: Skipping the Test Drive

Maybe you have a lot of driving experience, and you’re certain that you know how the make and model of a car will drive. Even if you’re sure that you’ve found the car of your dreams, it’s always important to test drive the vehicle. What if the car has some major blind spots or the seats droop too low or the car jerks too much when starting and stopping? You never know what issues might come up once you’re actually behind the wheel, and it’s always better to experience the ride before you’ve made your purchase.

Mistake #3: Buying a Car That Needs Work

If you buy a car that already needs work, you could end up getting yourself into a sticky financial situation. While you may be getting the car at a lower price, any small issues can increase the likelihood of major repairs down the road. It’s better to err on the side of caution, and make sure you’re buying a reliable car that hasn’t already experienced its fair share of damage. If you think the car could have any potential problems, it may also be a good idea to protect your investment by getting or extending a warranty.

Mistake #4: Ignoring the Vehicle History

You might not immediately recognize a car that’s had issues or been in an accident. It’s therefore important to check the vehicle history report. These records contain critical information about service, recalls, repairs and collisions. Those who skip this step could miss out on some important safety information that may prevent headaches in the long run. It’s always helpful to check the full vehicle history report with Carfax before buying any car, so you can know exactly what you’re getting.

Mistake #5: Buying More Than You Can Afford

The price of the car is not the only cost associated with driving. When you are financing your car, remember that you have to pay for car insurance, gas mileage, routine maintenance, repairs and vehicle registration. If you forget to consider these other costs, you may end up with a car that’s out of your budget.

Inspect the vehicle thoroughly to ensure that there is no structural damage that may affect its performance. You should also be on the lookout for cars with “salvage titles,” which means they were previously totaled in a serious accident, fire, or flood. In most cases, you want to steer clear of vehicles with salvage titles because they might still have hidden issues. Check the full vehicle history report with Carfax before buying a used car so you know exactly what you’re getting.

Check the Engine and Tires
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A car is only as good as its engine. It is always a good idea to have a qualified mechanic check the used car to make sure you’re not buying a lemon. If you have to replace the engine, the car may end up costing you more money than it’s worth. It’s also important to double check the car’s tires. If they’re eroded, you may need to spend even more money to purchase a new set, which could easily cost hundreds of dollars. It may be a good idea to look into extended warranties to protect your vehicle against expensive repairs.

Access to Spare Parts

With a used car, you should expect that some of the parts will eventually need to be replaced. It’s important that you can find these parts on the market, otherwise you may end up paying more if they are not readily available. Try to opt for a vehicle that has accessible spare parts.

Some experts (including Phong Ly, CEO of used car website iSeeCars.com), recommend buying Japanese vehicles due to their reputation for reliability and customer satisfaction. With brands such as Toyota, Honda, Mazda, Nissan, and Mitsubishi, Japanese car makers typically provide reliable vehicles with accessible parts that can be easily replaced.

Check the Vehicle’s Documents

Verify the validity of the vehicle’s documents before finalizing any used car purchase. A mechanic may be able to help confirm the quality of the car if you have any doubts; if the seller is skeptical about letting a mechanic look at the vehicle, this may be a red flag.

If you’re at a new car dealership and you’re told that the vehicle is certified pre-owned, this usually means the car has already been thoroughly inspected and includes an extended factory warranty. In this case, you probably don’t need to take the car to your mechanic, since a certified pre-owned vehicle already meets certain standards.

It’s always a good idea to protect your investment. If you purchase a vehicle that isn’t certified pre-owned, you may want to extend the warranty to avoid paying for expensive repairs on your own.

• The Sleazy Salesman 

We’ve all heard of the sleazy car salesman stereotype. There are plenty of reliable and honest salespeople in the car industry, however there are a few red flags that you should look out for. The majority of salespeople work on commission. This means that their pay is directly correlated to selling the products. This results in some people becoming dishonest and forceful when selling a car. Be aware of car salesmen that are rushing you into making a speedy purchase. Common red flag lines include pressuring you into making a purchase by saying “someone else is interested in this vehicle”. Don’t let external pressure impact your decision and make sure to always fact check what the salesperson is saying with your own research.

• So Called Deal Bundles 

Deal bundles are when the seller consolidates the vehicle sale with auto insurance and auto loans. This appears very attractive at first because it offers convenience of a “one stop shop.” However, purchasing your insurance and loans this way often costs you more in the long run. To get the best bang for your buck, research different organizations and compare rates on insurance and loan acquisition from other car sales dealerships or top online providers.

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• Quoting a Higher Price Based on Gender or Ethnicity 

Unfortunately, gender and race bias can often lead to overcharging the buyer. If you are a woman or person of color, it’s important to be careful about the quotes you are given. Compare your rates with those online or bring a male friend along to help circumvent this discrimination.

• Yoyo Financing 

If you have a lower credit score, this tip could help save you money. Yoyo financing is when car buyers with lower credit are tricked into paying up to 5% more than they should. Buyers are normally informed that their financing has fallen through a few days after they have taken the vehicle. As a result, they finance at a higher rate. Avoid this sudden change of pricing and protect yourself.

• Overseas Car Buyers Sending Payment Via Paypal 

If you are considering selling to an overseas buyer, watch out for this scam. Long distance scammers will often claim issues with a freight company and offer to pay a higher cost if you pay for the freight shipping. Selling over Paypal allows them to pocket the money. Avoid paying through Paypal if you can help it and meet buyers face to face whenever possible.

Purchasing or selling a car is a big financial moment in your life. It’s important to stay vigilant and protect yourself from potential scams.

Planning

First, it’s important to know what you’re looking for, how much you’re willing to pay, and what options are available. Look at Consumer Reports, J.D. Power, or the Long-Term Quality Index to check the quality of specific car models. Also, speak to your local mechanic who could provide insights about what details to look for in a car and how you can spot a reliable vehicle.

To establish your budget, track the costs for your current car, including monthly payments, insurance, fuel, maintenance, repairs, and registration. This will help you know how much you can afford when buying a new car. The government provides a simple and free spreadsheet to help you make a budget from Consumer.gov. Knowing what you can afford with a pre-approved loan can also help you narrow down your options.

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After deciding on a car and budget, you can then research available offers. It’s a good idea to research prices online and even request price quotes from different dealers to get a baseline of what is available in the marketplace.

Negotiation

Now that you have a plan in place, the next step is negotiation. Before walking into a dealership, write down your targeted down payment and monthly payment expense. Then, write down the absolute highest amount you can afford. Keep these numbers in mind and do not share them (especially your absolute highest amount) with the salesperson. These numbers will be your anchors during the negotiation and will allow you to stay confident and make clear decisions under pressure.

Your research from planning could help control the conversation regarding the pricing of a car. It could also give you a better understanding of the different price points for various options or add-ons, which can aid in your negotiation. Additionally, the quotes you may have received from other sellers could let the dealership know there is competition for your business.

As you negotiate, try to keep your emotions in check and be ready to leave if you feel pressured or if the pricing doesn’t line up with your research and budget. You may also be able to increase your leverage if you already have financing in place. This could remove the opportunity for the dealership to “play around” with the numbers and squeeze more money out of the deal by offering a lower monthly payment over a longer-term. The dealership won’t have as much wiggle room to take advantage of you.

Closing the Deal

At the end of the day, both you and the seller are trying to get a deal done. The seller is trying to not lose money on the car, and you’re trying to pay as little as possible. Going into the dealership with a plan, and having your financing in place are great steps toward helping you negotiate and ultimately close a deal for the car you want.

Once an agreement has been reached on price, paperwork needs to be completed so the deal can be finalized. Before signing anything, it’s imperative that you read each document, paying close attention to ensure all of the numbers and terms match the deal you agreed upon.