It is a sad fact that many people regret their car purchase soon after driving away.
Getting a used car can involve a number of pitfalls which makes it easy to become a car-buying-victim rather than a happy and smart buyer.
To help, here are the top nine mistakes that buyers often make when shopping for a car. Though not in any order, each point is important.
The very worst reason to buy a car is an emotional one, and having an impulse or feeling that the car is right is pure emotion.
Car salespeople are taught from the off to try to sell you a car on your first visit – statistically, a failure to do so will most likely lead to no sale at all, there is no second chance.
They will reach out at any sign of emotion and do their utmost to make a sale off the back of it. Wandering into a dealership just to take a look around is fine if you can keep a level head, but utter something out loud such as ‘I love this car’ and the canny salesman will pounce.
Don’t let your emotions get tied up in the car buying process – it leads to poor decision making and is easy to take advantage of. Salespeople are much better at using your emotions to their end than you are at resisting them.
So many people make impulse decisions and you cannot possibly do your research and make a wise choice if you are working off impulse.
This issue goes hand-in-hand with the impulse purchase. You must go online and research about the cars you are interested in, particularly with interest in:
Research is going to give you a step up in making the right choice and help you weed out poor decisions.
Many car shoppers hugely overestimate their needs for a car, rather than choosing a vehicle based on their actual driving experience and expectations.
You should be looking for a car which meets the real use that you have, not base it on some sort of future plan that may or may not happen. For example, someone with a plan to own a boat and trailer may pre-emptively buy a larger SUV or pickup despite not having the boat yet.
If the plans fall through, he now has the wrong vehicle. Buy based on your present needs, not for unresolved future desire.
There’s a lot of marketing driving cars like the Prius in the market. The cars themselves come with a substantial premium for being part of a modern wave of eco-friendly vehicles but will the fuel savings actually counteract that premium, given the length of time you will have the vehicle and the amount you drive? In reality that hardly ever happens.
Take the time to properly calculate your fuel savings when comparing the different types of engine and evaluate the final price of a vehicle over the years you expect to own it before simply diving ahead and choosing a hybrid because of clever marketing.
This is a massive no-no. You should always look at the cost of insurance on the car you want to buy before going near purchasing one.
If you are upgrading from an average car to something in a much higher insurance bracket the increase in premiums could make the cost of the new vehicle completely prohibitive. It is unfortunate that many people find this out after they have already bought their new car and have no choice but to struggle with significantly increased insurance premiums. Even just going from an old car to a new one in the same range can bump up the cost of insurance significantly.
Take the time to investigate the cost of insurance before you go to the dealerships.
Don’t make your trade-in of your old car part of your new car deal – it is far too easy for the car dealer to structure your deal to make it look like you are getting a lot more for your old car than you truly are.
Make the two transactions independent of each other – sort out the total deal for the new car, and then make a separate trade-in deal once all the numbers are finalised and deduct it from the total. Or, better still, sell your old car separately – you will end up with much more money than any trade-in arrangement.
This can be a real minefield, where the dealer has a map of the mines and you are going along blindfold.
You need to really do your research here and understand everything about the finance package you are looking at – from interest rates, to the level of warranty and any additional products.
Avoid agreeing to anything you don’t truly understand and check with your bank and online to see if you can get a better deal elsewhere.
Towards the final few days of a month – any month – the salesmen and dealerships are under pressure to maximise their figures to hit targets and increase bonuses.
During this time you will get the best deals as they are more eager to just make sales quickly – the last few days of the month are definitely in the buyer’s favour.
At the end of the year, the same is true as dealerships try desperately to rid themselves of the last year’s models before something newer comes along. This makes the last few days of December the absolute best time of any year to buy a car – you can hardly lose if you stay smart.
Do you really need a brand-new car? The depreciation in the first year of car ownership is so high that you lose 20% of the car value simply by driving it away from the dealership.
The car market is absolutely full of excellent used cars – you can save significantly by buying from the used car market instead of looking at showroom-new vehicles. You are not going to know exactly how much until you have done some research.
Compare the total cost of a new car versus the used one. Look at finance costs, maintenance, insurance etc. Most of the time, the used car is going to come out on top – even when the dealership is offering 0% finance.
Buying a car is one of the most expensive purchases you will ever make – losing out only to buying a house, and you are likely to buy more cars than houses.
Become a smart buyer by researching and understanding what you are paying for and you’ll save yourself tens of thousands in the long run.