Buyer’s remorse is unfortunately one of those sinking feelings that most of us have had at one time or another. The worst case I’ve experienced was when I purchased a Chinese water dragon from a pet shop at the age of 13 on a whim. It was when I got home that I came to the realization that I was not only expected to feed it live crickets and mice, but that it would someday grow to be three feet long. That was some serious buyer’s remorse!
This doesn’t hold a candle to the types of mistakes we can make as adults, however, particularly with big-ticket items like properties and cars. If you’re in the market for a new vehicle, you’ll want to avoid the following common mistakes which could lead to you driving away with a bum deal.
1. Buying the wrong type of car
It’s all too easy to get distracted with the range of choices available at a dealership. Before you walk onto a lot, be sure that you have some idea of what you’re looking for. That big SUV may look appealing, but if you don’t engage in outdoor activities or have a large family is it really worth it?
A slick sports car might be calling your name, but with only 18 mpg will it be suitable for your daily commute? Don’t forget to keep your daily lifestyle and needs in mind as you start to compare your options. You can always rent a car for special occasions.
2. Getting carried away with add-ons
Today’s vehicles come equipped with a long laundry list of features, from rust-proofing to lane departure warnings. Some of these can dramatically improve your driving experience, while others will simply be a waste of money. Write a list of the must-have features you’re looking for and don’t pay extra for ones you don’t want. If a car you’re considering already includes features you don’t want or need, try to negotiate the cost down rather than pay extra for them.
3. Not looking at a variety of brands
Advertising is often more powerful than we think, and it’s easy to walk onto a lot with a bias towards one or two main brand names. This could cause you to miss out on a great deal from a lesser-known brand, however. Look at all of your options before you make a decision to ensure that you’re not skipping a better deal with the same features. Car review websites and automotive blogs are a good place to start getting the lowdown on the latest models.
4. Neglecting to take advantage of the test drive
The test drive is more than just a joyride. This is your time to get behind the wheel and feel out a particular car’s features. Ideally, you should do more than simply take the car around the block. Try to get it out on bumpy country roads as well as the highway to see how it handles in different environments.
5. Not reading reviews in advance
In today’s internet age, there’s no excuse for not doing your homework before buying a car. If you’ve narrowed down your options enough to know that you want a mid-sized Suzuki, spend some time reading reviews of the latest models. Look at price points, trim levels, and efficiency statistics. This knowledge may give you leverage when it’s time for negotiation.
6. Using the sticker price as the base for negotiation
One of the reasons for reading reviews is to know what the base price should be for different trim levels of a vehicle. If you don’t do your homework, all you have to go by is what the dealer is advertising. Look not only at the suggested retail price, but at the most basic invoice price. That’s what the dealer paid for the car, and this should be the real baseline for negotiation.
7. Automatically settling for dealer financing
It’s certainly tempting to walk into a dealership and walk out with your financing squared away, but you’ll almost always find a better deal on financing if you shop around and arrange it yourself. Remember that the dealer is the middleman for your car loan, and you’ll pay for the privilege of this one-stop shop.
Take the time to compare financial products from different banks so that you can find more favorable interest rates. At the very least, obtaining quotes from different lenders could help you negotiate a better rate from the car dealer.
8. Only looking at new cars
One of the most common mistakes that car buyers make is only considering buying new. Many gently used cars are in excellent shape, and you save money on depreciation. It’s estimated that brand new cars can lose as much as half of their value in the first three years of ownership alone, which means that you can get nearly new cars at low prices if you’re open to it. Used car financing is also quite competitive.
9. Not comparing trade-in options
Were you planning on trading in your current car at the dealer to help pay for a new one? Be sure to check resources like Kelley Blue Book first so that you know exactly what it is worth. Trading a car in is convenient, but if you’re willing to sell it yourself on a car listings website you might be able to get more for it. This will depend on your car’s age and condition, but it’s worth comparing your options.
10. Failing to look beyond monthly payments
Paying for a car in cash will save you a great deal of money in interest and fees. However, for many of us that’s simply not possible, and some form of financing is going to be necessary. Look at the big picture of car ownership when you’re shopping for a car. You not only have to think about your monthly finance payments, but the cost of maintenance, fuel, and insurance.
Don’t forget to add in interest, add-on features, and administrative fees. Those monthly car payments may seem reasonable at first, but is the car still affordable when you look at the larger picture?
Buying a new car can be daunting, intimidating, and even downright confusing. Don’t be afraid to take your time and shop around to find the best fit, and you’ll not only be able to save money in the short term but also find a car that will suit you for the long run.
Rachel MacDonald is an Edinburgh-based freelance writer who has worked as a copywriter for businesses from London to San Francisco. She specializes in travel, design, and the arts and has a knack for hunting down bargains.
Money Beagle says
I think the last item should be moved to the top. How many people fall into that trap? The answer is ‘a lot’ if you look at how many people, upon talking about their new car, will point out EARLY in the conversation, “Guess what? I’m only paying $xyz per month!”
Mortgage Free Mike says
Great list. Also, look for any and all discounts available. Some major employers offer special incentives.
I got 6% off my car purchase, plus I was able to negotiate an even lower rate.
Great tips all around. I recently purchased a car and decided to go with Carmax because what you see is what you get. I wouldn’t even be tempted with add ons are fancy salesman tactics.
Martha Gonzales says
Thanks for this informative blog post. All the points mentioned here are well thought of. The first point is the best point and vouching for getting away from gas guzzling SUV beast is appreciated. Yes, most of us go for SUVs for their looks and comfort in driving or seating. However, in this pursuit what we generally forget is the fuel efficiency aspect. Great blog post indeed.
Very good tips. My husband used to sell cars. He’ll watch local dealership commercials on tv and point out where they are tripping people up. Trade-in, financing and monthly payments are the biggies. He also hates when they say they will take a trade even if you owe money on it. People don’t realize that a lot of times the dealer will just add that amount in to the new loan. Never tell a dealer what kind of a monthly payment you want to make, always look at the total cost of the loan. With number 7 I would also add to check with credit unions.
Brian @ Luke1428 says
We will be purchasing a car in the next year and will be paying cash. We’ve been saving for 18 months already to build up the amount we will need. I love the fact we won’t have to go into debt to purchase a vehicle.
Simon @ strengthenyourshot says
Thanks for this useful short article. All the factors described here are well thought of. Also, look for any and all unique discounts available. Some significant companies provide unique rewards. Thanks.