Buying a new vehicle is generally the largest purchase, next to a residence, that most people undertake. Because of the lasting financial implications involved with purchasing a new vehicle, you should take care not to make one of these mistakes when you are buying.
Relying on the dealership for financing is the first common mistake. Don’t be tempted to get everything at the dealership just for the sake of convenience. You should shop around for financing, compare rates and terms. A pre-approved loan through your own bank or credit union can often save you money on interest and give you some leverage when you are negotiating; you won’t “need” a certain dealership to work a deal for you and you can be prepared to walk away if they don’t come up with a satisfactory package for you.
Rushing into something you don’t want or need just to get into a car is the second mistake we are looking at. Car dealerships often have cars with extra options or features that you don’t need or want, but because they are already on the cars in stock, some people pay the extra costs to drive off with a car right then. If the car you want with the features you want isn’t in stock then you should have the dealer get one in for you. A little patience can save you a lot in extra costs.
The third mistake is not thinking in terms of the grand total. Don’t be pulled in by a seemingly small monthly payment; ask bottom line what the buying price is. Salesmen love to say that a car is only “this much” a month and you don’t realize how much you are actually paying for the car unless you talk interest, length of loan and extras.
Walking onto a car lot ready to purchase without doing some research is the fourth mistake. Do not rely on the sales staff at a car dealership to be your sole source of information. You alone have your best interest in mind when making this kind of a purchase; salesmen are paid a commission to sell you a car, regardless of your ability to maintain the note or the impact it makes on your finances. A salesman I know once told me that they bring home a commission whether or not your car is repossessed down the road for non-payment; so you must independently find out about the options for financing, car models and other information before you decide to commit to a sale.
The final mistake is buying based on emotion. The feel of the wind in your hair when you test drive that sports car may be nice, but if it doesn’t meet your needs then you shouldn’t purchase it. The new car smell lures many people who just want to walk out with something right then. Buy according to your needs. A larger family, and the lifestyle that comes with it, isn’t compatible with a 2-door sports car. By the same token, a single person probably won’t be needing to undertake the expense of a larger sports utility vehicle.
Avoiding these common mistakes can help you avoid buyers remorse later.