Buying a car is one of the biggest purchases of your lifetime right after buying a house. So why do so many rush through the process ending up with buyers remorse after the fact? Here are some of the worst mistakes of all time to keep and mind and avoid when going car shopping.
1. Lower payments: Everyone wants a low monthly payment but having a low payment can secretly suck you dry of money without you knowing it. Lower payments means having a longer financing term. When you finance you pay interest on your loan every single month. The less money you pay on a monthly basis the more money you pay over the long run. If saving money is your game go shorter term. It will also save you money when you sell the car as it won’t depreciate in value as much.
2. Longer the loan the worse it is: This goes hand in hand with number 1 but it’s worth mentioning again to drive home the point. Having a longer term loan costs you more money. You can save thousands over the length of the loan if you have a shorter term and pay more on a monthly basis. Your car will be worth more once you’re done paying it off.
3. Buying new: Buying a new car seems like a good idea. There is something nice about buying something no one else has ever touched or driven before. You know exactly how it’s been driven, taken care of and cleaned. If any problems arise then you know it’s from you and nobody else. The problem is that nothing loses value like a car. The second you sign that paper work you lose money and you’ll lose money every second you own it until you sell it.
It’s always better to buy used as you’ll save thousands over the long run. There are plenty of things you can do when buying used to ensure you’re getting a quality vehicle. It’s more than worth the trouble to do a little research on what to look for when buying used to save thousands of dollars upfront.
4. Not spending enough time with the car: As a cars engine and transmission warm up you’ll get a better feel for how the car actually is. When buying a used car spend as much time as possible driving it. Drive it on the highway. Drive it around the block. Drive it in as many situations as possible to see if you notice anything off or different in the different environments.
Listen to the car and see if you hear any knocking or skips in the engine or smell anything funky. Remember, you’ll be stuck with this car for a long time. It’s almost like going on a 10 minute date with a girl or boy and marrying them immediately after. You wouldn’t do that would you? Treat your car in a similar matter as you’ll at least be with it for a few years.
5. Salesman rush: A good salesman can make it easy to buy a $50,000 car and not have you think twice. A salesman knows once you start second guessing yourself that’s when the deal will crumble. Their job is to make the buying process as smooth and comfortable as possible. Don’t let the salesman rush you through the whole thing. Take a deep breath and remove yourself from the environment if you have to before making a decision.
It’s easy to sign paperwork when a salesman is hovering over you pushing to make a decision. Go in there with a set price you’d like to spend and don’t let the sales team divert you from that. If you go in there not knowing what it is you want they will take you for a ride and be able to put you into whatever they want to put you in.
6. Know the statistics: Did you know that the top 10 reasons people buy a car has nothing to do with low price, low payment, financing, high resale value or longer warranty coverage? Some of the top reasons for buying a car are reliability, interior comfort, exterior styling, gas mileage, quality of workmanship, dealer likability and convenience and performance.
If you go into a dealership knowing exactly what you’re looking for you won’t end up having buyers remorse. You won’t end up spending more money than you set out to in the first place and you’ll be much more satisfied with your purchase.
7. For the looks: A lot of people will choose looks over performance. They don’t want to get stuck in a vehicle that makes them look bad so they may overlook reliability. This is one of the most common mistakes. Do your research and narrow down your search to a few cars that are low maintenance and high reliability.
8. Not thinking of depreciation: There are cars out there that depreciate faster than others. If you want a car that you’ll lose less money on focus on cars that don’t lose as much value and are reliable. Subaru retains it’s value better than just about anything out there. 1990’s Toyota 4Runners are also still very sought after as they last well into the 200,000 mile range and are all around great cars.
9. Not researching enough: When you’re about to buy a car it’s important to do your research. Don’t buy anything until you’ve gathered enough information. Buyers remorse can be a big part of buying a car if you don’t do your homework and don’t know what you want. It’s important to start the process of research long before you’re ready to buy. Take months if you have to and get a good understanding of whats out there and the market in general.
I have been in the business for roughly 12 years and these are the biggest mistakes I’ve noticed from first hand experience as well as from reading up on the issue as well. It’s surprising how quickly people will just buy a car and be surprised by all the fine print later on down the road. If you can just stick to whats on this list and follow what I have listed you’ll be able to find a great running car as well as save thousands of dollars on the loan.