New cars can be a status symbol, an escape, or just a reliable way to get from point A to point B. For these reasons buying a new car is different for everyone. Some buyers go in level headed and ready to haggle, others jump the gun and buy the first flashy vehicle that speaks to them on the lot. Whether you plan to do a bit of research, or choose a car based on intuition alone, here are 5 of the major mistakes you should avoid.
1. Not Checking the Blue Book:
That big yellow sticker is difficult to argue with, which is why so many new car buyers will haggle based on what they see on the sticker. The downside to this method is that sticker price is rarely based on the true cost of the car. This is the price that the dealership has chosen based on several factors, including what employees are getting for commission. When you haggle down on cost, base your negotiations on the blue book value of the car, or discover the manufacturer cost, and go from there. Of course, no dealership is going to give you a car for the bare bones price, but you’ll still get the best deal if you know exactly what figures you’re working with. When it comes to buying a vehicle, information is always your friend.
2. Forgetting to Arrange Financing:
Yes, most dealerships offer in-house financing on vehicles. To do this, they go through a bank of their choice and create an agreement which may or may not be in your best interest in terms of interest. Sometimes, the in-house financing is the best option, and will give you top value on your purchase, other times, a competitor bank will provide a better rate. Shop around before you step foot on a sales lot, to save yourself the headache of haggling, only to find out that the financing options are too steep for your pocketbook. This also gives your dealer a clear-cut idea of what you can afford, and how you plan on financing. It opens your options, and will save you time in the long run.
3. Brand Loyalty:
This is a big one, and it really limits your options in terms of style, price, and even dealer incentives. Many individuals will continue to stick with a brand that has given them good results over the years. You see this a lot with truck drivers, who are loyal to Chevrolet, or lean more toward Fords. While it’s good to know that there is a brand out there that speaks to you, it’s bad to limit yourself based on this knowledge. Not all vehicles by each brand are made the same, or to the same safety standards. You could end up paying more, or wind up with a shorter warranty period, or less incentives by choosing based on brand.
4. Choosing Based on a Special Deal:
Special deals are attractive, which is exactly why dealerships make them. Sometimes they are trying to promote a new vehicle on the lot, other times they are trying to get rid of something they received too many of. Whatever the reason, a special discount offer isn’t always the best option for you. It could land you with a car you didn’t really want, based entirely on the fact that there was a rebate involved. Instead, take your time, do your research, determine what style you need, and go from there. If the best deal on the lot coincides with what you’re looking for in a vehicle? Bonus! If not, keep searching until you find what you need.
5. Not Negotiating the Bottom Line:
Low monthly payments sound great until you add them all up and realize what you’re paying in total over the lifetime of your purchase. One of the biggest mistakes new car buyers make is not focusing on the bottom line price of the car, and instead, haggling over monthly payments. A low monthly payment might make it easier to pay rent on time, but it doesn’t really give you a discount on the car you’re paying for, unless you can bring the cost down everywhere. Be bold, and haggle until you can get the best possible price; it’ll be worth it in the long run.