If you want to buy a new vehicle, then you will know what a stressful experience it can be. At times you may wonder if you are making the right decision, or if you are spending too much.
This is all very normal, but at the same time, you do need to ensure you avoid these mistakes. If you don’t, then things may end up working against you in the long run.
Not Comparing Prices
This may seem somewhat obvious, but if you don’t compare prices, then you may end up paying way more than you should for your car. Dealerships do have the power to set their prices and as a result, the bottom line will vary depending on which lot you visit. If you find a car that you love, then take the time to shop around.
Look at the lowest prices from the dealerships in your local area and make sure that you use this as leverage. You may find that the dealer either matches the price or they give you a better deal so you go through them. Either way, this is a fantastic way for you to make sure that you are not paying over the odds for your vehicle.
Ignoring the Trade-in Value of your Current Car
If you plan on trading in your previous vehicle, then you have to do your research. All too often, shoppers trust their dealership a little too much when it comes to their trade-ins. You need to do your research and you also need to make sure that you are getting a good price.
If you don’t then you may find that you end up losing out in the long run which is the last thing you need. When you go to your dealer, be mindful of the fact that they can’t give you the full value of your car.
They have to make money on the sale as well. That being said, the price does have to be reasonable. The better option here would be for you to sell the car yourself. If you do this, then you are bound to get the best result out of your money and you may even find that you have more money to put toward your new car as a result.
Not Getting a Loan
Again, it is all too easy for you to let the dealership take care of this for you. When you have chosen a car, you will be sent to the finance office to find a loan that is right for you. At the end of the day, every bank and lender will have their packages. They will also have their interest rates. This will be based on numerous factors.
Take the time to chat with a few lenders and find the right interest rate so that you can save time or money over the lifespan of your loan. Even a 1% difference can save you thousands, so it is imperative that you look into things like this. Some loans even come with penalties, or fees when you take them out. As you can imagine, this can cost you even more over time, so take the time to avoid this by securing a loan in advance.
Focusing on Monthly Payments
This is a very common trick for dealers. They try to get the buyer as focused as possible on monthly payments. When they do, they can then add a ton of warranties or extended warranties on top. You might not feel as though you are paying a lot of money for things like this as you will be paying over time. The danger of this is that you may be lured into things that you are not entirely comfortable with.
Consider your monthly payment and also think about add-ons that are big money-makers for dealers. Also, give some thought as to whether or not you need the add-on. If you don’t then refuse to pay for it. If you feel as though you are being pushed then walk away. It’s not worth it.
Not Having a Budget
You have to understand exactly how much you can afford when the time comes for you to buy a new car. If you haven’t worked out your budget already, then now is the time for you to do that. If you work with the principle that all of your monthly bills should not surpass 50% of your income then this is a great system. If you adopt this system, then you can see what you can afford on your payments.
You will also be able to include your interest, title costs and taxes within your calculations. If you are having a hard time working everything out, then make sure that you use a loan calculator. If you do this, then you will soon find that it becomes easier to get a solid overall idea of what you need to pay for. You may also find it easier to know how your loan is going to impact you overall, so be mindful of that if you can.
Rushing the Process
Purchasing a car should take a bit of time. If you rush yourself or if you let the dealership make you feel somewhat used, then there is a chance that you will end up making the wrong decision. The salesperson can help you with the decision as to getting the right trim package as well as various add-ons. That being said, they will be making money based on your decision.
Although you don’t want to be pushed around, you also need to make sure that you are kind to the salesperson. Remember, they are there to help, even if they have an agenda. They are not the enemy, and if you act like they are, then you risk being treated this way.
Ignoring Resale Value
Some car brands hold their resale value way better than others. Part of your research should involve you looking into this data. If you do intend on trading up in the future, then you need to choose a car that is going to retain an extra 10% of its value at the time of trade-in. This can net you thousands. Some models are more popular than others too, so if you can take the time to choose a model that you know is going to be popular later down the line, then this will help you quite a lot.
If you have no idea what model of car to go for, then Volkswagen is a great brand and they last for years on end, so you know you’ll be making a solid choice there.
Ignoring Hidden Costs
If you ignore hidden costs, then this is another major mistake. Add-ons, such as extended warranties or even insurance packages can all make your purchase way more expensive. It would be better for you to consider things like maintenance and gas usage too. If you don’t then you may find that you end up paying way more than you realize.
Make sure that you are happy with everything and that you also give some serious thought to your insurance. It’s best if you consider repairs too. Some cars are more expensive to repair than others, so you need to make sure that you account for this if possible. If you don’t, then although you might save now, you will be spending way more in the future and this can make things way more expensive for you.