With all the available information to assist would-be car buyers – most shoppers still make common mistakes that cost them money. Whether it’s a new or used car, the more knowledgeable you are the better chance you stand to get a great deal. Unlike many other purchases, such as auto insurance, which is a necessity in all states, buying a car is more often an emotional decision rather than a rational one.
If you become afflicted with what is sometimes referred to as “new car fever”, you won’t be satisfied until you replace your old battered ride with a newer, shinier, flashier set of wheels. Or, you may be forced into the buyer role because your current car has just been stolen, totaled in a crash or simply died. And, that creates another problem – the rush to find a worthy replacement.
That’s when a buyer is most susceptible to making any of six common mistakes. Aside from doing your research by checking price guides and reviews of the type of car and model you’ve set your mind on…get your credit score as well, so you know if you qualify for a better interest rate on your purchase.
1. Don’t only think of the deal – You may have an idea of what you want to pay as final negotiated price. But, most shoppers forget about taxes and license fees and that could add several thousands of dollars to the end cost of the vehicle. Once you’ve committed to the sale price minus the extra fees, re-negotiation is rarely an option, and you’ll end up paying more than you wanted.
2. Don’t make too small a down payment – Zero-down deals are good up to a point. Often, the result will be that you have little or no equity in your new vehicle and that means you’ll need to make a substantial amount of monthly payments before you’re no longer “upside down” on your loan. Should you have an accident and the car is totaled, you could be left holding the bag. In other words, you could owe more than the car is worth, which can cost you plenty if your loan company wants you to pay the difference between the two.
3. Don’t let your guard down – In many cases, the buyer relaxes once they’ve struck what they believe to be a deal. However, dealerships make most of their money after the sale. Avoid falling prey to higher interest rate loans or expensive extended warranties when the finance person takes over. It’s their job to push these on you…adding even more to the original price you agreed on. Don’t be afraid to bargain here as well.
4. Don’t be too quick to decide – We’ve all been there and heard it before. A great sales ploy is that the deal is only good if you decide right now. Truth is, the same deal will probably be there tomorrow and may be even better, if you show the sales person you’re a tough negotiator. When the pressure is on, most buyers crack and give in…which is never a good thing for you. Take time to think about it. Avoid jumping at the offer just to cure your “new car fever”. You could feel a lot worse in the morning with a bad case of “buyer’s remorse”.
5. Don’t go shopping if you don’t know what you want – Surprisingly, many new and used car buyers frequently start out without a clue what they need or want. If that’s you…you’re at an immediate disadvantage. The power is entirely in the hands of the sales person, who knows his inventory and will steer you in the direction of vehicles from which he stands to make the most money – instead of what’s right for you. Start out your day with an idea of what vehicle best fits your needs and budget.
6. Don’t focus excessively on the monthly payment – Avoid shopping for a car with a set monthly payment in mind. Regardless of the amount, don’t let the sales person know how much you can afford. Once he knows your target number, of say $400, he’ll come up with a deal that exactly matches the amount. Unfortunately, he may end up telling you the only way he can give you those payments will be with a longer term loan…and, may even diminish the value of your trade-in, if you have one.
So don’t fall victim to the pitfalls of buying a new or used car – by simply avoiding these 6 common mistakes.
Do you consider yourself an expert at buying a new or used car? Feel free to share your thoughts in the comments section below.