Most Common Car Buying Mistakes

In order to ensure you buy a decent car and get a good deal you must conduct research, have a budget, and perform due diligence. Here's how.

Most Common Car Buying Mistakes

Buying a new car takes a lot more than walking into a car dealership and choosing one that suits your fancy. Unfortunately, this is an error many car buyers make.

In order to ensure you buy a decent car and get a good deal you must conduct a great deal of research, have a feasible budget, and perform your due diligence.

Top 7 car buying mistakes to avoid

A car will likely be one of the first major purchases you make, but this purchase can be very costly and disappointing if done without proper research and preparation.

With adequate knowledge of what to look out for when car buying, you can skip the regrets, frustrations, and costly mistakes that car buyers go through. Here are the top 8 car buying mistakes people tend to make and the ways you can avoid them.

1. Buying the wrong car

Just because the price being offered for a car matches your budget doesn’t mean it’s a good deal. Some cars come with a history of issues that will drain your pocket even more after you buy them. Also, you can’t buy cars simply because look they look nice or have a trendy brand name. Keep in mind that expensive top of the line cars also tend to have expensive car parts and costly maintenance.

When choosing a car, you should keep in mind your lifestyle, needs, and budget. If you live in a temperate region and you choose a car that isn’t suited for your environment, you’d likely run into many issues. 

Car depreciation is also something to worry about. Most new cars lose 20- 25% of their value in the first year of purchase. If you decide to resell your car soon after purchase, you could be in a significant bind, as it often takes as much as 3 years before you break even on a new car.

2. Choosing a dealer solely for convenience

Due to the convenience, people shopping for cars usually go to dealers close to their location. But setting your sights on only one dealership will not give you all the best options available.

The wise thing to do is to search online identifying the dealer ratings and also ask around for the best car dealerships that give great prices and quality cars. Ask friends and family members who have more experience buying cars, and also look out for the Customer Satisfaction Index score for any dealership you choose.

It’s important to do your homework on any car dealership because many of them will slam you with ridiculous high-interest rates and terms of payment that are way worse than banks or lenders often offer.

They’re mainly driven by the gain they make from the interest rates they charge, and so they like to push “Buy here, Pay here” options to unsuspecting buyers. Also, many dealers spike their prices with fees and unnecessary markups that will have you paying more than you bargained.

Before you make a final decision on a car or dealership, you can also look up records of complaints about the dealership on Better Business Bureau.

Finally it is important to note that there is a significant difference in dealerships which sell direct from manufacturers and those which are general used car dealers. Those who sell direct from manufacturers are in the business of selling a specific branded car and they can often provide great interest rates on new and certified pre-owned vehicles, while used car dealers tend to have more predatory lending practices.

3. Buying a car without seeking help from professionals

Sometimes, going to a dealership without help from pros can leave you with a bad deal. A car buying professional will give the car a thorough examination for common car issues that you may not be able to detect. Also, they understand the value of different cars better, so they know when you’re making a bad buy. They’re not emotionally invested in the purchase like you are, and they will help you make objective decisions.

Negotiation is another necessary life skill essential for car buying; if you’re not very skilled at it, you can get ripped off.

This is especially important for impulsive buyers, poor negotiators, or first-time car buyers who don’t know the ropes. It’s a big purchase, and going in with backup may just be what will save you from a bad deal.

You can get the services of an auto broker to secure a good deal for you or work with a service like AAA Endorsed Auto Buying Program for safer purchases.

4. Not doing enough research

 Research is one of the best ways to get familiar with different car options before hitting the auto dealership. It helps you understand the preferred car model, variations, how great the car is, and any shortcomings it may have.

Research also means you find out how fast the car’s value depreciates, the car’s book value, its safety ratings, how much maintenance the car would require, and any essential information that can help you negotiate better deals. You can also obtain research about the specific car in question by obtaining a vehicle Carfax report. This report can inform you about the car’s maintenance upkeep and whether the car has been in major accidents or has a salvage title. Most dealers are willing to provide you with this information.

5. Not getting financing before going to a dealer

Before you go car shopping you should seek to obtain financing in advance.

It’s not enough to focus on the maximum monthly car payment you are approved for; think about other variables like: scheduled maintenance, gas, repairs, and insurance as these factors can easily add hundreds of dollars per month to the cost of the car.

When negotiating, always start with the vehicle’s price, then talk about the trade-in value, financing, and lastly, the monthly payment.

Never let the dealer determine your financing. Instead, check if your bank or loan vendors offer auto loan packages within your credit range before visiting the dealership.

6. Getting bad credit or high-interest rates

When negotiating a car loan, it’s important to take your time to find the best available deal. Compare interest rates so that you can avoid hurting your credit score, getting a loan with a high-interest rate, or being underwater on your car loan.

The process may look stressful and time-wasting, but in the end, you’d find a deal that’s fit for your budget and credit score.

7. Purchasing a car above your budget

Before buying a car, you must understand the actual cost of car ownership. Paying the monthly payment is not all there is to buying a car. You must know that owning a car comes with a lot of responsibility and other extra charges.

To determine your car budget you can afford, consider the costs of loan payments, auto insurance, fuel, maintenance, and repairs, etc.

Before you sign the paperwork…

Buying a car is a long process, but getting the best car deal makes all your hard work worth it. Before signing the paperwork, ensure you have not made the car buying mistakes we’ve discussed above.  They’ll save you a lot of financial worries and help you find the ideal car for your budget.

You can get in-depth knowledge of the best car buying techniques, lending practices, tips, research methods, and more in this thorough course on car buying and maintenance

Categories: Buying and Maintaining a Car