Buying a car requires making calculated decisions, so before you head to the showroom you need to make sure you’re fully prepared. In this article, we’re going to cover 8 common buying mistakes so that you can avoid making them yourself. Ultimately, the key to a successful car purchase is doing the right amount of research and having a good idea of what you want and what you can afford before ever entering a dealership.
1. Buying the Wrong Car
It’s very rarely a good idea to buy a car just because its what they have in stock or what the dealer is willing to put incentives on for. If the vehicle isn’t going to suit your lifestyle and meet the requirements needed for it to be a practical option for you, you shouldn’t buy it. Getting a vehicle that’s right for you means its within your budget, it matches your lifestyle and it suits your personality. If you can check off all three of these boxes, you can feel great about buying the car.
How to Avoid: The best way to avoid making this mistake is by doing a ton of research into the vehicles you’re interested in and pricing them in a car loan calculator to see if you can actually afford the payments.
2. Buying on Emotion
It’s easy to walk around the dealership looking at cars and end up falling in love with one of them. If this is the case for you, it’s important to take a few days to think about if the car is really right for you. If the vehicle you’ve fallen for is out of your budget, consider looking for that same vehicle but in an older model to make it more affordable. Typically, this means you’ll be able to do more research on the vehicle as there will be reviews on its quality and durability compared to new vehicles where the reliability hasn’t been tested over the long run.
How to Avoid: Never buy a vehicle on impulse or on the same day you do a test drive. Give yourself at least a day to sleep on the idea of a vehicle. It’s also smart to visit multiple dealerships to get quotes on the same vehicle and see where you can get the best price.
3. Choosing a Dealer by the Location
A mistake a lot of people make is they go to a dealership based completely on what’s nearest to them. This can often result in going to a dealership where the service or price you get isn’t as good as a dealership that’s 20 minutes more out of the way. Instead, ask your friends or families where they went to buy a car and find out where they had positives experiences. Alternatively, check out online reviews for all dealerships within 50km of you and see what stands out for the right reasons.
How to Avoid: Before you head to a dealership, do your research whether that means asking friends and family or checking out online reviews.
4. Discussing the Trade-in too Early
Most of the time when you’re buying a new car you’re going to want to trade-in your current car. A mistake a lot of people make is they start bringing up the idea of trading-in their vehicle to the dealership way too early. Before you ever discuss trading in your vehicle with the dealership it’s important to get it valued by an outside source. Bringing up trade-in talk without having a true idea of the value of your vehicle is a recipe to be underpaid for the car. It’s in your best interest to negotiate on the price of the new vehicle first and once you have a price on that vehicle you can start negotiating on the value of your trade-in.
How to Avoid: In order to get the best deal on your new vehicle and trade-in value, it’s best to negotiate them completely seperately, always negotiating the price of the new vehicle first. It’s also important to get your trade-in vehicle valued by a third party so you have a good idea of the value of it before negotiating with the dealership. If you’re not satisfied with the amount the dealership wants to give you for your car, don’t hesitate to go trade it into a different dealership.
5. Going Alone if You’re Not Comfortable
If you’re someone who gets overwhelmed and stressed at the idea of buying a car and negotiating a price, consider finding a friend or family member to accompany you. Buying a car is a huge purchase and you don’t want to make a poor decision because you’re alone and didn’t have someone there to help you make the right decision.
How to Avoid: Bring a friend or family member who’s been through the car buying process before and is comfortable with negotiating for you.
6. Being Afraid to Walk Away
Many people have a hard time walking away from a dealership, even if it’s just for a day or two to think about their decision. Shoppers who keep their options open and who are willing to walk away from a dealership and shop somewhere else often end up with a better deal. Ultimately, you need to be comfortable walking away if you don’t think negotiations are fair. You may even get a call from the salesperson you left a few days later saying that they can drop the price ever more than what you had discussed during your initial negotiation.
How to Avoid: Before you go to any dealership, you need to promise yourself that you’ll walk away if you’re not satisfied with how the process is going. It’s easier to do this if you’ve researched multiple dealerships, that way you can go to the next dealership on your list if the first one can’t meet you needs.
7. Letting the Dealer Determine Your Financing Terms
Letting the dealership determine your financing terms often means paying for dealership markups and additional interest that means the dealership makes more money. This means your monthly payments are going to cost you more. While it may seem convenient to leave your financing terms in the hands of the dealers, rarely does it end up getting you the best deal.
How to Avoid: Shop around for car loans and see what the lender interest rates are. Once you know what the lender rates are you can figure out whether what the dealership is offering is reasonable or not. If the dealer is able to beat the rate you found elsewhere, great, if not, go back to the lender and take that rate.
8. Agreeing to the Sticker Price
You should always remember before going into a dealership that the sticker price you see on a vehicle is rarely the price you’ll pay. Instead, look at the sticker price as a starting point of where to negotiate down on the price from. It’s also known as the manufacturers suggested retail price (MSRP), and it just a guideline for dealers to follow. After add-ons and other fees, there’s a possibility that you’ll end up spending more than the MSRP. Some of these costs won’t be negotiable and typically, new vehicles will have less room to negotiate down on compared to used vehicles.
How to Avoid: Use the MSRP as a starting point for your negotiations and start working down from there. The salesperson is going to expect you to negotiate lower than the MSRP so stick to a number your comfortable with. This also means knowing the MSRP of the vehicle’s you’re interested in before ever entering the dealership.