Buying a brand new car for the first time is exciting. However, dealerships too often see first-time car buyers as easy targets because many of them lack the experience and knowledge on how to get a new car without being taken for a ride. Here are five of the most common mistakes first-time car buyers make (and how to avoid them.)
Mistake #1: They Buy With Their Eyes Not Their Brain
Of course, you want a new ride that is stylish and has great features, but you need to really think about how you are going to use this car and what kind of driving you do on a daily basis. What seems great on the lot may not be the best fit for your lifestyle.
Also, before you go shopping have a clear understanding on what you can afford. More often than not the first question the salesperson will ask is “So how much do you want to spend per month?”
Don’t fall into this trap. Really take a hard look at your budget and financial goals. For some of you, a new car is just not in the cards even if you think you “deserve it.”
Even if new car payments are comfortable, don’t get hypnotized by what you think is a good deal just because it sounds like a big discount. The young lady who bought the Kia thought she was really making out with $5000 off the MSRP. Only to find out that her “new” car was really a used one, and that price isn’t so great.
So don’t take the first offer at face value. You may do better elsewhere, or with a different brand. Go home and shop around from the comfort of your computer. When the dealer says “This price is only good today,” that usually means you aren’t getting their best price.
Mistake #2: They Don’t Consider Used Cars
Some people think the only way to get a reliable car is to buy a new one. While new cars will offer you a factory warranty for several years in case something comes up, that doesn’t mean used cars are ticking time bombs waiting to drain your wallet.
Lightly used and Certified Pre-Owned models will still have the balance of a factory warranty and may provide some additional coverage. Some cars take a hard hit when it comes to depreciation. This means that you can often pick up a really nice ride and spend less than you would if you were to buy the same car new.
Again the key thing is to do some research, cars that have higher resale values may not offer the best buy if you only get one that is 1-2 years old. Compare the discounts on the new model against the used prices before making your decision.
Mistake #3: They Don’t Check Their Credit Or Get Pre-Approved
If you have never bought a car before and have limited or no credit history, it will be a challenge getting approved for a car loan. You want to know what you are up against before stepping foot into the dealership.
Often first-time car buyers will require a co-signer on their loan in order just to qualify. These can be awkward conversations and your loved ones may be apprehensive when it comes to lending a hand. The reason being is that if you don’t make the payments, they are on the hook, and their credit rating could take a hit.
Mistake #4: They Bring The Wrong Person With Them
If you are new to car buying, I strongly recommend bringing someone else along to help you think things through and be the voice of reason. But remember that older doesn’t always equal smarter.
I’ve seen it happen far too many times when first-time buyers brought along their parents or siblings only to have the whole family end up with a raw deal from a shady salesperson. Make sure you bring someone who knows how to stick to their guns and is willing to ask the tough questions.
This is a purchase that should be discussed in detail ahead of time. Typically, the best course of action is to spend a few days test driving cars just to see what you like and what you don’t. Then make some phone calls and solicit quotes. When you are looking at numbers on a screen this takes a lot of the emotions out.
Mistake #5:They Don’t Read All The Paperwork
Let’s be very clear about this: when you buy a car, you are signing a contract. More often than not that contract is designed to work for the dealership, not you. Despite popular belief, there is no “cooling off” period where if you come to find out you got totally ripped off the dealer has to undo the deal.
You should read, understand, and ask questions about the document you are signing. In addition to the purchase price, there will be other fees. Some of them are legit like registration fees. Others like GAP policies and “executive packages” are usually not worth your money and are just another tactic to take money from an uneducated car buyer.
If at any point in time you feel pressured or uncomfortable, just walk away. You can always find another car and another car and another deal. Not every dealer is out to rip you off. Many of them just want to give you a nice price and send you away feeling good with the hope that you will come back to their store for your next car.
But this is a major purchase that can have serious ramifications on your finances if you aren’t careful. Be patient, be diligent and be smart.