Shopping for a car can be a stressful experience for many. There are so many vehicle options and financing options. Unfortunately, so many car buyers make simple mistakes that can be avoided with a little bit of preparation and patience. Making a bad decision on a vehicle purchase can end up hurting your wallet in the long term, and/or leave you saddled with a car for years that you don’t even like. Luckily, this article discusses some of the mistakes that I have seen car buyers make and it also explains how you can avoid making them.
Going light on the research.
This is most common for first time car buyers, but plenty of people who have purchased vehicles before make this mistake. It amazes me that we go on the internet and research product reviews for mundane things every day, but when it comes to purchasing a car many people simply fall in love with the best looking one at the dealership. Salespeople aren’t there to hold a customers hand and identify problems for them a car may have (unless it’s their competition of course!). There are plenty of websites that contain tons of information on anything you’d like to know about a car.
Owner reviews can be good to look at, and they give a potential buyer a sense of what owners see as the positives and negatives of the car. Research the recall information as well! It shouldn’t come as a surprise that Hondas have one of the lowest rates of vehicle recalls in the industry vs a manufacturer like Nissan which has the absolute highest.
Shopping based on monthly payments.
There are various debt-financed options to purchasing vehicles nowadays. Many buyers will take a 72 month option over a 36 simply because the monthly payment is lower, but ignore the fact that you will pay a much higher amount of interest over the course of the loan. The important thing is to shop not based on how low is the monthly payment, but shop based on the total cost of the car!
Many dealers will try and help you purchase higher priced cars that normally wouldn’t be in your budget by offering a longer loan. A long term loan spread out over many months may make it affordable for you to buy a more expensive car, but you will actually be paying a much larger amount of money for the vehicle in the long run.
You should at least consider purchasing a vehicle with a shorter loan life (or none at all!). The average car loan has been increasing in length for many years, but that does not mean that you have to follow the crowd and get a longer term loan.
There are a plethora of websites out there nowadays that can run loan interest numbers for you so you can identify exactly how much interest you would pay by increasing the life of your loan.
Forgetting About Car Insurance Costs
Do not forget about that added monthly cost you will be paying in the form of car insurance! It varies considerably based on your own driving history AND the particular car you seek to have insured. Unfortunately, lots of people forget this fact as soon as they fall in love with a particular car in the dealership lot.
Will you need Gap insurance? Is this car going to cost more or less than your old one? Generally car insurance companies look favorably upon car with higher safety ratings. But sports cars and vehicles with low safety ratings will typically come along with a higher insurance price tag.
Buying a new car simply because new is always better.
This is bologna, and it’s probably my most aggravating common car buying mistake. I’ve never purchased a new car from a dealership before. I personally feel that they are overpriced and whenever you buy a new car they have an immediate significant drop in value. Vehicles such as Hondas, Toyotas, and several other manufacturers have a very strong reputation for reliability and longevity. Although, these vehicles typically hold their value quite well as they age, you can potentially save a ton of money buying a used model in good condition.
It’s true, that you do need to be more careful if your considering a used car. Used car dealerships have a mixed reputation to put it lightly, and outside research is a must. I would recommend having an independent mechanic perform a general inspection on the vehicle. Usually the will do these for little more than $50, and it could save you a lot of money down the road. Another important thing with used cars is vehicle history. Carfax’s are really nice, but there are other services as well that do the same thing, all you need is the Vin number.
Choosing a car that doesn’t fit your needs.
If you were a full-time college student would you buy a used Mercedes-Benz? If you had two young children would you be shopping for a sports car as a daily driver? I hope the answer to both of these questions is no. Even if the college kid could afford the monthly payments, the maintenance costs would kill him. Where is the dad going to put two smalls children in a sports car? You guessed it, trunk.
Many people when they arrive at the dealership fall in love with a car and forget what they needed it for in the first place. Not all cars are made the same in terms of gas mileage, space, reliability and performance. Think about what purpose your new vehicle will serve and stick to the criteria you need.
Buying extras from a dealership that you don’t need
Rust-proofing, paint protection, tinted windows, special wheels, pinstriping, Vin etching, and fabric protection. The list goes on and on. Dealers often try and sell you extras with the car so they can make some extra money off of that sale.
It’s often never worth it to buy these extras from the dealership. Why? Because they tend to inflate the price for all of these “extras”. Many things such as Vin etching, paint protectant, and upholstery protectant can be purchased in kits from local auto parts stores. Window tinting? Sure if the dealership will do it as cheaply as the your local window tint shop but I doubt it.
Dealers may even offer rust-proofing but at this point it is nearing fraud for a dealership to tell you that you need rust-proofing. Why? All modern cars come out of the factory with rust-proofing and it has been significantly diminished as a problem in recent years.
Ignoring the importance of a test drive.
This is by far the most important thing to do, especially for used vehicles but it is important for new vehicles as well. Regardless if you are buying a vehicle from a dealership, a used car dealer or a private seller you should test-drive the care. If the dealership is selling the vehicle “as is”, that is even more of a reason to test drive the vehicle.
You should test the vehicle at a variety of speeds, get on the highway if at all possible, and test it along some bumpy roads. When taking a car on a test drive there are a number of things to look for.
Suspension Issues: This is why you want to hit the bumps, potholes and drive over a speed bump or two. If you hear something jingling around underneath or the car bounces like a 90’s rap video the car is going to need suspension repair.
Technology: Nowadays there is a ton of bells and whistles that they put in front of the driver. Test that crap like a madman especially if it is a used vehicle. If it’s new go ahead and test the bells and whistles anyways because sometimes the entertainment systems can be a real pain in the a$$ to use.
Does the vehicle really match your expectations? No car manufacturer is going to tell you “Hey! we make a sh@@ car, but it’s cheap!” No car manufacturer is going to tell you “Hey! Our last generation handled much better!”
If your looking for a performance vehicle you need to ascertain how the car really handles and picks up speed. Take it on a few sharp turns and take it on a brief excursion on the interstate. Check how responsive the steering wheel is.
Not getting a used car inspected
For the vast majority of buyers it is a mistake to not have a used car inspected before you purchase it, especially if it is from a private party. For those of you reading this who are mechanics and walk around carrying a $2000 code reader, by all means inspect it yourself. However, for most people it’s best to have a used car checked out before you start talking serious numbers.
When should you have the car inspected? I recommend that you get the vehicle inspected after you have test-driven it and you are comfortable paying the seller’s asking price. It’s a waste of time for you to get the vehicle inspected, just to realize after the test-drive that you don’t like the car. It’s also a waste of your time to get the vehicle inspected knowing full well that you would not pay more than $2,000 less than the seller’s asking price.
Final Notes
- Always be prepared to walk away, remember there are tons of cars for sale out there and if this particular car doesn’t fit your criteria, something else will.
- Keep this tips in mind and you will avoid ever making these all to common car buying mistakes!
Interested in more tips on buying a car? Check out this article on buying cars on craigslist!