Buying a car can be daunting for even the most experienced car buyers. The more prepared you are for the process, the less stressful it will be. Here are 10 car buying mistakes to avoid.
Failing to do enough research
If you don’t do your research, you might make an expensive mistake when purchasing a new vehicle. There are online resources that can give you an idea of pricing for the various makes and models, as well as rebates and incentives. Edmunds is a valuable online resource for finding the best car deals and incentives. You can browse by make or vehicle type. You can also find vehicle reviews on Edmunds, TrueCar, and other helpful sites. When searching for vehicles, it’s smart to compare things such as fuel economy, maintenance costs, and insurance costs on various makes and models. The U.S. Department of Energy is a good resource for comparing the energy efficiency of various vehicles. When researching, look for the total cost of ownership for a particular vehicle.
Having your heart set on a specific model
This mistake may cost you to overpay for a vehicle. It doesn’t mean you can’t get the car you really have your eye on, it just means you need to carefully compare this vehicle with other options. Shop around!
Not comparing several dealerships
You will find different pricing at different dealerships based on inventory and how close they are to reaching their sales quota each month. Shopping and comparing several dealerships will give you more negotiating power when you find the vehicle you like.
Skipping the test drive
You never want to pass on the test drive, even if you’re buying the same make and model you’ve had in the past. A newer vehicle may have features you don’t like or other hidden surprises that can only be found during a test drive. It’s smart to take the car on city streets as well as out on a highway at a higher speed to see how it handles. Familiarize yourself with all of the controls, set the seat to a comfortable driving position, be aware of visibility and blind spots, and see how it rides. If it’s not comfortable during a test drive, why would you buy it?
Neglect in shopping for financing before heading to the dealership
Contacting your credit union representative or researching auto loan rates and terms online is an important first step to car shopping. Failure to shop and secure financing can result in having to pay a higher interest rate on a loan set up by the dealership. Accepting financing from the dealership without even consulting your credit union can lead to higher monthly car payments. Do your homework to avoid making a costly financing mistake. A dealership is not doing you any favors by “arranging for financing.” A local credit union like Choice One Credit Union is a great resource for low-interest auto loans.
Buying unnecessary extras
This is another way car salespeople make their money, upselling you on many extras you don’t need. Things like tire protection packages, VIN etching, and extended warranties are just of few of the many extras the dealer might try to sell you. Paint sealants, rust proofing, and fabric protection are others. The paint on your vehicle is made to withstand the elements, there’s no reason you should need to pay extra for a paint sealant or rustproofing. These are all costly add-ons you should avoid.
Another car buying mistake is not researching the value of your trade-in
This is another step that can be done easily online before car shopping. Kelley Blue Book is a great resource for finding car values, even separating them into trade-in and private party sales categories. Importantly when car shopping, if you don’t know your current vehicle’s worth, the dealership may make you a trade-in offer that’s lower than it should be. It’s as easy as checking online trade-in value resources to help prepare you for negotiating.
Only focusing on the monthly payment when negotiating is another of our car-buying mistakes
Car salespeople will often start the conversation by asking what type of monthly payment you’re looking for. Don’t answer that question! Rather, negotiate one thing at a time, with your trade-in deal coming after you’ve actually negotiated a price. It’s easy for a dealership to meet your target monthly payment by extending the term of the loan or the lease. That will just cost you more in the form of additional interest.
Missing out on rebates and other incentives
Rebates and vehicle incentives can equal big savings. The advanced research mentioned above will help you find these deals.
Not checking with your insurance company on the cost of insurance
Depending on the type and value of the new vehicle you are purchasing, you can be in for some significant sticker shock when it comes to insurance coverage. Talk to your insurance agent when you have an idea of the vehicle you want to purchase.
Avoiding these common car buying mistakes will help you enjoy the ride
After doing your research and avoiding the many mistakes we mentioned above, you should be able to feel comfortable knowing you got a great deal on your new vehicle and vehicle financing. Your local credit union is always the best place to start for a great deal on a new or used vehicle loan. Be sure to compare Choice One Credit Union’s low car loan rates and flexible terms when shopping for financing. Best of all, you can apply for your auto loan easily right online. Learn more about car loans by reading our blog entitled “Avoid These 9 Mistakes with Car Loans.”