Published by Umer Financials
Posted on April 28, 2016
When you’ve decided to buy a new car, but are intimidated by the process, how can you feel confident in your choice at the end? Making mistakes when purchasing a new vehicle could prevent you from getting the best value for your money. But if you are aware of common car-buying mistakes, like those explained below, you may have an easier time avoiding them.
“Being prepared is the most important thing a car buyer can do,” says Eric Lyman, vice president of industry insights for TrueCar. “Car buying can be spontaneous and emotional. If you properly prepare, you can eliminate some mistakes down the line.”
This preparation begins with research and ends with seeing, touching and feeling, says Lyman. “The car market is very competitive and the difference in quality between makers is so small now, it’s important to see the features, quality and style in person so you can make a more informed decision.”
But preparation doesn’t just apply to the car; it’s also important for financing. Lyman suggests visiting your bank before going to the dealer to get prequalified for a loan and understand what you can afford. In addition, says Lyman, find out what financing options the dealers offer. If your bank has a better deal, present it to the dealer to see if they can work with you to match it.
Lyman also suggests using a car buying service that provides pricing, performance, technical and safety information for new and used vehicles. “These services address the biggest areas of uncertainty and common pitfalls of consumers during the car buying process,” he says. This includes eliminating negotiations, comparing prices for similar vehicles in your area, and determining the value of your vehicle trade.”
Most dealers offer test drives of their vehicles and it may be a mistake not to take advantage of that, says Consumer Reports. You will be spending plenty of time behind the wheel, so Lyman says it’s important to find out if you will be comfortable there.
Consumer Reports suggests taking at least 30 minutes to drive and fully evaluate the vehicle. It’s also a good idea to take the vehicle on the freeway during a test drive, notes Lyman, to get an understanding of how the car handles road and wind noise, as well as vibrations.
“And be sure to try every feature you would use in a normal day-to-day situation [during the test drive],” he says.
Even though the car looks pretty or handles well, it may not be practical for your needs in the long run. Consumer Reports notes a vehicle’s safety, pricing, reliability, ratings and reviews should all factor into your decision. Lyman advises considering each of these with the next five years in mind. Are you starting a family and need a vehicle big enough for several riders? Are you becoming an empty nester and looking for something smaller and more fun? Consider taking a broader view on how long you plan to own the vehicle and what your usage needs look like over that time, he says.
Sometimes a salesperson will make you an offer that’s lower than the sticker price to make you feel like you are getting a deal, but that might not be the best you can get, according to Consumer Reports. As long as the vehicle you are interested in is not in short supply or high demand, dealers may have a bit of wiggle room on the price.
When it’s time to talk deals, don’t only focus on the monthly payment number, says Lyman. Even if the salesperson can meet your desired monthly payment, Lyman says there are other factors to consider so you don’t pay more in the long run.
“A lower monthly payment driven by a longer term loan can increase interest paid over time and doesn’t necessarily correspond to a lower transaction price,” he says. “When negotiating price, also factor in the value of your trade-in and aftermarket service contracts so you understand the whole deal.”
Recognizing common car-buying mistakes is the first step to becoming a smarter shopper. Proper preparation can help you get the car you want at the right price.