Top 10 Car Buying Mistakes

Most folks consider buying a car very stressful and sometimes intimidating.

The reason they find the process stressful is a lack of knowledge. With an understanding of how car dealers operate and how to develop a price, a trade value, and knowing your credit profile, buying a car is easy and can be painless.

Being prepared is crucial if you want to drive off the dealership lot as a happy new car owner. Unfortunately, many car buyers skip the prep work and end up in a car they really do not like, or they overpaid for. I want to help you avoid that, so I am sharing the Top 10 Car Buying Mistakes.



Top 10 Car Buying Mistakes

1. Buying A Car You Cannot Afford

Overall, it is your responsibility to know what you can and cannot afford. Review your personal finances, create a budget, and determine what you can comfortably afford beforehand.

2. Not Knowing What Rates and Terms You Qualify for Before Going into The Dealership

A preapproved auto loan starts you out on the right foot. You get an idea of how much you can afford, and you will have an interest rate that you can then compare to the dealerships financing, which might actually offer the lowest annual percentage rate. Look for a loan application on the mobile web pages of your bank, credit union, or other lenders such as Capital One or Nationwide. It is a good idea to do your own research on which lender will work best for you.

3. Skipping the Pre-Shopping Research

Like our moms told us when we were kids, "You have to do your homework." The same holds true for buying a car. Conducting research before heading to the dealership gives you a car buying advantage. First, you will want to narrow down the type of car you need. Is a minivan ran SUV right for you? Are you in the sports car stage of life? What are the latest safety features? Which ones are most important to you? Consumer reports and reviews are also a valuable tool to use when choosing the right vehicle for you.

4. Not Knowing the Market Pricing on the Car You Would Like to Buy

Car dealers are always having a big sale, they want you to buy a car right now, today only. They also want you to believe you just happen to show up on the last day of their latest and greatest, once-in-a lifetime sale. Do not fall for it! There are tons of free online companies to provide a wealth of information about any vehicle you are interested in. You should easily be able to find out a fair market price for whatever vehicle you decide on before you go into the dealership. If you pay over market pricing, it is your fault. Keep in mind, market pricing is for the AVERAGE vehicle. There are exceptions such as a 2013 Toyota Camry with only 23,000 miles. Market adjustments should be expected for situations like these.

5. Not Knowing the Value of Your Trade-In

If you are planning to trade in your old car, showing up without doing an appraisal of the vehicle beforehand can cost you thousands of dollars. Research your car online at Edmunds.com or kbb.com, taking into consideration the condition of the car. BE HONEST about the condition of your trade. Print out your findings and take them with you to the dealership. Another option is to sell it to a dealership outright via online purchase tools, but you will forfeit any tax credit you would get which could easily cost you.

6. Not Test Driving the Exact Vehicle You Are Purchasing

I have heard so many car buyers say, "I don't need to drive it, I know what it drives like," "l rented one before and loved it," or the best one is, “l just drove one at the dealership down the street." Each vehicle is its own machine and each one is different. Vehicles are man-made machines and machines sometimes have faults. There may be ten of the same cars and each one may drive or act slightly differently. Not driving the exact car you are going to buy may keep you from realizing that something may not feel quite the same as the last one did.

7. Letting Emotions Steer Your Negotiations

If you are a good negotiator, this will not be an issue for you. When it comes to car buying, people tend to get emotionally attached to a car they think they want which makes walking away from the deal so hard for them. After driving the car, finding the color you want and getting close to the price you hope for, you are sold. But good negotiators are not afraid to walk away. Keep the emotions out of it and never ever buy under pressure. It is always a good idea to "take a walk" outside if your emotions start to take control and you need to reset. You must use logic in negotiating. The way your grandpa taught you does not work anymore. You are not going to get $7,000 off ANY pre-owned vehicle anymore. You also, cannot get a 2021 Escalade for $400/month. Math is math.... you cannot make it equal what it doesn't.

8. Not Putting Money Down

The $0 down ads car dealers run everywhere have changed the thinking of the car buying society. Even though $0 down sounds very appealing, it is a very big mistake! Not putting any money down when buying a car will end up costing you a lot more money overall. Car dealers and finance companies advertise "$0 down" because they make more money off the interest when you buy a car. At the very minimum put down enough money to cover your tax, title, license. Paying interest on TT&L is not a good financial decision and just does not make any sense.

9. Not Purchasing Warranties or Gap Coverage

If you do plan to keep the vehicle longer than the warranty that it comes with, you can consider buying an extended warranty. They usually cost between $1 ,000 and $2,500 depending upon the cost of the vehicle and the manufacturer. High end vehicles can often be more than that. There are other coverages that, when explained, make sense. If the finance manager does not take the time to go into detail about what protections are available to you, ask them to explain them. If you see the value and want to purchase the vehicle, you can negotiate the price! If you do not purchase GAP coverage at the dealership, you should get it with your insurance company! 

10. Finally, Stop Being Rude to the Salesperson You Are Dealing With

They are there to provide a service for you! They do not set the price of the car, the warranty, the interest rate, etc. They are simply trying to help you get into the vehicle you want and provide for their family! You want the best deal then BE NICE!