Some of us want to get behind the wheel of a new car as quickly as possible. We go with what our hearts tell us and forget what our head is saying. Sometimes the car we buy is a mistake. It's not one you can easily take care of either, considering new cars lose their top retail value when you drive out of the dealership. These cars might not drive well, cost too much or simply end up not being right for you. So what can you do? Here are the top 5 car buying mistakes and how you can avoid them.
5. Visiting only one or two dealers
One common mistake is visiting only one or two dealers in your local area. Leafier suburbs may attract higher prices than other areas. A car is a major purchase, so doing the hard work by comparing dealers will help your bottom line.
4. Looking at the monthly payments, not the overall price
Sometimes, low monthly payments are enough to convince would-be car buyers to sign on the dotted line. It's a common mistake. Low monthly repayments often end up costing you more in interest and charges, especially if the loan term drags on for five or more years. A good price and suitable payment plan is a better indicator of how much everything will cost over time.
3. Bought a car they didn't really need
Some people buy cars they really don't need. Think about it - if you only use your car for occasional trips to the shops, buying an off-road 4WD isn't going to do you much good. You'll be forking out way more for repayments, insurance, fuel and maintenance than you really have to. Consider your lifestyle and needs before committing to a car. Not just flashy "gas-guzzlers," you equally don't want a compact hatchback if you're part of a growing family.
2. Didn't shop around for good finance rates
If you think a 2%, 1% or even 0% interest rate is good, think again. Ultra-low dealer finance usually have hidden costs attached. These include not being able to negotiate a lower price or balloon payments at the end of the loan term. By talking to financial professionals and motor vehicle loan brokers, you may get a much better deal.
1. Didn't do enough research
The biggest mistake anyone can do is not doing enough research beforehand. There are so many impartial guides out there on fuel economy; road safety; comfort; how family friendly a car is; and even depreciation. So there's really no good excuse for not doing your homework. Thoroughly research a variety of cars you may want to buy. Research all the available finance options. Do the knowledge work before settling on a car and finance plan that's right for you.