The Cheapest Way to Buy a Car: A Comprehensive Guide

Buying a car is a major financial decision, and it's important to make sure you get the best deal possible. If you're looking for the most cost-effective way to purchase a vehicle, buying a used car is the way to go. Used cars come with more standard equipment than they did a few years ago, and they tend to cost less than new ones. To get the best deal, it's recommended that you pay cash for your car if possible.

If you want to buy a new vehicle, getting pre-approved for a loan is the best way to get the best possible price. Get pre-approved by your bank, credit union, or other financial institution and take that pre-approved loan to the dealership when you shop. This will give you something to compare with the rates offered by the dealer and allow you to negotiate terms that are comfortable for you. It's also recommended that your loan be no longer than 48 months and that your monthly payment does not exceed 15 percent of your income.

To keep your credit rating as high as possible, it's important to keep your credit card balance low and limit the number of tough inquiries about your credit. Another great way to drive a new car without getting a loan is to lease a vehicle instead. Leases are available for 24 or 36 months and will have a set number of miles allowed depending on the terms. If you're willing to travel, Indianapolis is a great place to start looking for a used car.

It's also a car-heavy city, so if you live in or near the Orlando-Daytona Beach area, it's worth traveling there to get an inexpensive used car. At Bankrate, we have been helping people make smart financial decisions since 1976.We have maintained our reputation for more than four decades by demystifying the financial decision-making process and giving people confidence in what steps to take next.