Car Buying Mistakes to Avoid
Those looking to buy a new car now have more information than ever before on where, when, and why to make their purchase. But while that vast network of facts, figures, and opinions can prove to be a great resource, it can offer just as many opportunities to make a mistake in the process.
When buying a car, there are several things to look out for to make sure you don't end up regretting your purchase later.
Don't Neglect Your Research
As stated above, there are more ways than ever to seek out the perfect vehicle, but figuring out the best way to navigate that information can be tricky and intimidating. We've compiled a guide to researching a new car for that reason.
The time you spend researching will go a long way in making the process as successful as possible. After this phase, you should have a good idea of:
- The car make and model you want.
- Whether you want a new, used, or a previous model year car.
- How much the car should cost.
- Where to get the vehicle.
Keep in mind while researching to focus on the type of car that you need, instead of the type of car that you want. Ask yourself pointed questions; for instance:
- Do you have a long commute? Consider cars with better gas mileage.
- Do you have a large family? Consider cars with more seats and storage.
After determining the big factors about your purchase, there are a few other things to keep in mind, to ensure you're happy with the car you buy:
- Leather seats; latest technology; moon roof, etc.
- General comfort.
- Will you have enough legroom? Do the seats offer enough support?
Determine the Correct Budget
It's easy to get drawn into flashy new models or to keep adding options to a car until its price tag is unrecognizable. Blowing the budget is a frequent mistake people make when buying a new car.
Sit down with a pencil and paper and consider all of your budgetary costs, and how much you can afford to spend on a car. We've put together a guide to creating a car budget, but some things to generally keep in mind include:
- The total price of the car—NOT just how much you will pay monthly.
- Your financing needs or options.
- The length of your car loan.
- The interest rate on your car loan.
These factors will give you a better idea of how much the car will truly cost you over time.
Don't Give In to Pressure
Many dealers will try to dazzle potential car buyers with talk of breathtaking today-only prices. Rely on your research and your best judgment. If you don't feel comfortable with signing off on a new car in that moment, it's okay to wait a day or two.
Buying a car is a big deal, and something that will most likely affect your budget for years. Take the time to ensure you're making the best decision possible.
Know Where to Get the Best Price
Generally, it's recommended to visit several dealerships in order to get the best price when buying a car. Don't just settle for the dealer down the street. After doing your research, you should have an idea of what is a bad, good and great asking price for the car you want.
You can also:
- Use a car buying service to handle the details for you.
- Negotiate remotely.
- Most dealers offer this opportunity online. Often overlooked, it's a great option for people who are uncomfortable with face-to-face bargaining.
Factor In Your Trade-In
Trade-ins are another aspect of the budgeting process when buying a car. Our guide to trading in a used car lays out all the details, but some general ideas to keep in mind are:
- The value of your used car.
- Whether your car will be attractive to the dealer.
- If you're currently paying off your car, how much is left on your loan compared to your car's trade-in value.
Still, be careful when considering this option. While it's possible to knock more money off the purchase price of the car you want to buy by trading in your old car, it also allows the dealer more leverage in the negotiating process.
Remember Your Car Insurance Agent
The new purchase will likely also have an affect on your car insurance bill, so include your agent in the process. Some questions to keep in mind include:
- Will this car cost me more or less than I'm currently paying?
- Do I need gap insurance?
- Can I ask for a vehicle history report?
Often, insurance agents will have different considerations in the process, so they may remind you of other questions to ask the car dealer.
Pre-Arrange Your Financing
This step is an especially important way to sidestep a mistake once you reach the finance and insurance phase of buying a car.
Walking into a dealership with a pre-approved loan will allow you to:
- Negotiate as a cash buyer.
- Know exactly how much you can afford to spend on the car.
- Understand if the dealer can offer you a better interest rate.
We've laid out all the options for securing different types of financing here.
Understand Your Warranty Options
There are a number of ways to protect your car well into the future of your ownership, including:
- New car warranties.
- Service contracts (commonly thought of as extended warranties).
- Certified pre-owned warranties.
Again, it's important to do your research and make sure you know the difference between each type of contract. Walk away from the dealership knowing you made the best decision you could, instead of fearing that you were pressured into taking the wrong option.
Get the Most Out of Your Test Drive
Just as it would be risky to buy a new pair of jeans without trying them on first, so would it be an unsound idea to buy a car without driving it. Still, car buyers will often bypass this aspect of the process.
A test drive can give you several insights into the car before you make the purchase, including:
- How it feels.
- Can you reach all pedals and controls?
- Are there any blind spots? Can you see out of all the mirrors?
- Breaking smoothness.
- Engine noise.
While these factors may seem small on their own, they could add up to make someone regret their decision to buy a certain car.