A new car is one of the most significant purchases most Americans make in their lifetime.
In 2018, 7 million Americans were behind on their auto payments, which is why it’s important to do your research before you buy.
Despite wanting new cars, many Americans have car-buying anxiety. About 1/3 say that they’d rather sit in the middle seat on a plane or do their taxes than bother with visiting the dealership.
You can help alleviate those fears and anxieties by avoiding certain car buying mistakes, though. If you’re gearing up to make your next big car purchase, keep reading to learn 10 common car buying mistakes to avoid when shopping for a new vehicle.
1. Obsessing Over a Specific Make and Model
There’s nothing wrong with wanting the car of your dreams. However, if any part of you is unsure or open to other types of cars and models, try to remain open-minded throughout the process.
There might be an alternate vehicle you haven’t considered yet that’s better for you or your family. Before you head out to any dealership, go online and compare reviews, safety, reliability, pricing, and other ratings. When you’re a knowledgeable buyer, you’ll be more confident knowing what you want and open to considering other options.
Don’t hesitate to tell a salesperson that you’re shopping around. There’s nothing wrong with conveying that you’re keeping your options open.
2. Obsessing Over Price
When potential buyers are talking to dealers, one of their biggest fears is getting ripped off. When buying a car, everyone wants to know if they’re getting a good deal.
Buyers want to know whether they paid more, less, or average compared to other buyers who purchased the same car.
Remember that certain trimmings can add significantly to the price, too. If you can do without the leather seats or sunroof, do it. Focus on what you consider as necessities, and be flexible on the rest so that you don’t end up overpaying for something you can’t afford.
Technically-speaking, everyone drives a new car. If you buy a certified used car, you can still leave the lot feeling proud in an almost-new ride.
3. Skipping a Test Drive
Maybe there’s a specific make and model of a car you’ve always dreamed of owning. However, it’s essential that you make sure to test drive that car and other options as well.
What looks good on paper and in photographs might not be the right fit for you. It’s crucial to test drive so that you can get a feel for your potential ride for the next few years and make sure that it works for you in comfort, style, and other aspects.
Spend 30 minutes inspecting the inside of the vehicle, looking around, and taking it for a drive. It’s worth it to spend more time being sure initially than to end up with buyer’s remorse later on.
Plus, test driving cars is fun, and every salesperson expects you to do it. Take your time to test drive as many cars as you need before deciding on the vehicle you know is the best choice for you.
4. Focusing Too Much on the Monthly Payment
So many car salespeople lead with “What kind of monthly payment can you afford?” Of course, everyone has to consider their budget and figure out what they can afford each month. However, you don’t want that to be your main focus.
Start by negotiating the initial vehicle price. Then, discuss the trade-in value and then whether or not you’ll finance or lease. From there, you should determine the monthly car payments.
If you only pay attention to the average monthly payment, the salesperson could end up lumping in the loan or lease terms, the trade-in value, and the vehicle price altogether to make it seem like you’re getting a great deal.
5. Forgetting to Call Your Insurance Company
If you’re considering a new car that’s much higher in value than your current vehicle, you might be in shock at how much your monthly insurance payments increase.
Before you settle on any new car, give your insurance company a call. Have a few cars in mind, including year, make, and model, when you call. That way, you’ll get a better idea of how much your premium might increase with the purchase of a new car.
The more you know about your future options for insurance, the better you’ll be able to say how much you can afford to pay each month, too.
6. Forgetting to Value Your Time
Time is money. Some car shoppers become so consumed with getting a great deal on a car that they end up spending weeks shopping for a new car.
Don’t forget to think about all the time you invest in monetary terms. Sure, you might find a better deal weeks later, but was it worth all the time you took away from doing other things in your life?
7. Underestimating the Total Cost of Ownership
Emotionally, it can be easy to think that you must have a new car once you’ve settled on the make and model of your dreams. Some of us will go to any means to justify our purchase, convincing ourselves that, over time, we’ll save money on gas, maintenance, and other things.
It’s important to stay objective, though. Crunch your numbers to determine if it’s really worth the cost in totality. Include your insurance costs, the depreciation of your new car, how quickly you’ll be able to pay it off, and how many miles you plan on putting on it.
While you might be emotionally inclined to make a purchase, make sure that it’s realistic, too.
8. Not Pre-Qualifying for a Loan
It doesn’t matter how great you are at negotiating. If you don’t choose your financing wisely, you could lose a lot more than you save.
So many shoppers enter the dealership without thinking about where they’ll get their auto loan. The salesperson can secure a loan for you, but it’s not always the best option.
Dealers tend to mark up interest rates over what buyers actually qualify for, as it boosts their profits. Over the course of your loan, this can make a significant dent in your pockets.
Before you step onto the lot, shop around, and get pre-qualified. Take the time to compare lenders and find the best rate that fits your needs. If you end up getting a better offer at the dealership, you can take it.
Otherwise, you can have peace of mind knowing you’ve already secured a loan offer that you’re comfortable with.
9. Setting Expectations Too High
Sometimes, the abundance of choice we have can be detrimental rather than helpful. When we feel pressure to make a perfect choice, it can lead to anxiety and even depression around that choice.
If the product in question doesn’t lead up to our expectations of perfection, it can leave us feeling disappointed. Regardless of how much you want to land the perfect ride, remind yourself that it’s just a car. Don’t let the anxiety, buying process, and suspicion of getting ripped off lead to a bad experience overall.
When you drive off the lot, you want to feel happy about your decision and not focus on the potential failures of your new car.
10. Not Understanding Financing Terms
Maybe you’re great at negotiating, and you manage to talk your salesman into taking an extra $1,000 off the price. If that’s the case, congratulations on being an excellent negotiator!
Just make sure that you pay attention to and understand other financing terms.
If you take a chunk off the initial price but find yourself locked into a high-interest rate with no money down, it’ll cost you more in the long run.
Many buyers regret the loan terms later on or not forking over a down payment.
Avoid Classic Car Buying Mistakes and Enjoy the Process
So many potential new car buyers obsess over not getting ripped off when they shop around for new cars that they forget to analyze all the ways in which they might lose out financially.
If you’re in the market for a new car, take your time. Start online first by exploring different models, reviews, safety, features, reliability, and pricing.
Once you’ve narrowed down your selection, shop around at different dealerships, and test drive several cars until you find one in which you feel comfortable and confident.
Before you do that, though, find a car loan with a low interest rate so that you don’t end up paying more than what you qualify for at the dealership. Talk to your insurance, too. Ask about how your rates might increase based on different vehicles you’re considering, so you have a more accurate depiction of your future monthly car payments.
When you avoid the common car buying mistakes, you’ll enjoy the process of shopping for a new ride that much more.
Are you ready to find out what type of car loan you qualify for? Apply now, and you could be driving off the lot today!