Avoid Common Mistakes When Buying a New Car
Getting a new car can be exciting, but it’s also a big financial commitment. If you’re aware of frequent car-buying mistakes, though, you can make informed decisions as you go through the process. Here are some common blunders to avoid when you’re shopping for a new ride.
Mistake 1: Not Researching Enough
There’s a lot to consider before settling on the vehicle that fits your budget and lifestyle, so it makes good sense to start with some research. The Insurance Institute for Highway Safety speaks to safety concerns with its comprehensive ratings that you can sort by make and model.
You may also want to look into some reviews on other features that are important to you. Sites such as Consumer Reports offer a variety of best/worst lists, like Best American Cars, Best New Cars under $30,000, Best/Worst Third-Row Seats and other rankings.
Doing the leg work to narrow down your list can help you focus when you actually begin shopping — either at the dealer or online.
Mistake 2: Discussing Your Trade-In Up Front
Many buyers trade in their old car when shopping for a new one, because it can be an easy way to part ways with it. But experts suggest avoiding any talk about a trade-in until after you’ve negotiated the price of the new car. Consumer Reports says that’s because there’s too much opportunity for the salesperson to “work” the figures when you’re negotiating both vehicles, giving you a great deal on your trade-in, for instance, only to make up the difference on the cost of the new car.
Once you’ve settled the terms of the new car, then bring up the trade. The Federal Trade Commission (FTC) says you should come prepared for negotiations by knowing your car’s worth, which you can check in the National Automobile Dealer Association’s NADA Guides, the Kelley Blue Book or other similar guides.
Mistake 3: Passing on the Test Drive
Once you’ve narrowed your options to a couple of models, Consumer Reports states that it’s important that you take a test drive. Passing on that can be a mistake, because there can be big variations in the handling of different models.
Drive each vehicle on the same day, for at least 30 minutes, Consumer Reports advises, so you can compare models more effectively. Consumer Reports also recommends driving the car over different road surfaces and, whenever possible, in various driving conditions. Take notes about the quality of the drive:
- Does it offer a soft, quiet ride?
- Does it brake and accelerate effectively?
- Is the visibility adequate for you (from the front and back)?
Mistake 4: Not Shopping for Financing
If you’re planning on financing your car, you’re not just limited to what the dealer offers. In fact, the FTC says a loan from a dealer may not be the best you can get. Shop around, the agency suggests, and consider options from banks, credit unions and online lenders.
When comparing financing, avoid focusing on the monthly payment, the FTC cautions, because it doesn’t accurately represent the total amount you’ll pay for the loan. Instead, the agency recommends comparing the annual percentage rates and the length of the loan to select the best deal.
Though it’s easy to get overwhelmed or even caught up in the excitement of buying a new car, avoiding these common car-buying mistakes can help you become a successful shopper.
Originally published on July 20, 2018.
Dad: Kids, one day, when you’re much, much older, a time will come when you’re going to want to start…driving.
And when that day comes, it’s important that you know how to buy a car responsibly. So, listen up.
First, do your research.
You’ll have a LOT of cars to choose from. You have to ask yourself, do you love this car? Or do you just love the way it looks? Is it reliable? Is it safe?
Next. Never put all your cards on the table. If you have a trade-in, don’t mention it upfront. This is what we call a “neg-oh-shi-ay-tion tactic.”
Daughter: Daaaad, can I trade my car in for a new one?
Dad: No. Next, never skip the test drive.
Son: But I haaaate tests!
Dad: No no, this is a good test! A car is a BIG commitment. You have to try before you buy!
Okay, last thing: shop for financing. Don’t just settle. Make sure you’re getting the best deal. Understand?
Kids together: YAHHHHH! LET’S BUY A CAR! LET’S BUY A CAR! LET’S BUY A CAR!
Dad: Well, I’m really glad we had this chat. You know you guys can always come talk to me about this kind of stuff.
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