Buying a new car is an extremely stressful purchase for most consumers, further complicated by the unscrupulous nature of many individuals associated with car sales. By avoiding a few common mistakes, consumers can maximize their savings when purchasing a vehicle. Here is a quick list of 4 common mistakes, and how to avoid them:
1 – Focusing on Monthly Payments.
When it comes to purchasing a car, dealerships would prefer that consumers finance a vehicle for as long as possible, and even though they do occasionally outright sell a car for money, most of their sales involve some form of financing. The longer a purchase is financed for, the more a consumer ends up paying in the long run. Focusing on a specific monthly payment allows salespeople to manipulate other facets of the purchase, increasing overall vehicle cost.
2 – Fixating on Purchasing a New Car.
Despite what many people may think, purchasing a car is in fact not an investment or at least, an extremely poor investment at best. Vehicle depreciation is extreme, especially during the first two years following production. It is important that consumers accurately balance the value inherent to purchasing a new car versus that of purchasing a used vehicle. While warranties are inherently more extensive on a newer vehicle, depending on relative value, a less extensive warranty offered on a used car may offset the total value of a new car purchase.
3 – Ignoring Dealer Incentives and Special Programs.
Consumers often have a specific make and model of vehicle in their mind prior to initiating the search process. While it is important that consumers are satisfied with the quality record of their vehicle manufacturer, in some instances, competing manufacturers will often offer a similar line of vehicles; manufacturers shamelessly imitate successful competitor brands. By failing to explore competing brands, consumers often miss out on incentive programs and special dealer sales packages. Not all manufacturers offer the same discounts, and many manufacturers run seasonal promotions based on an array of economic and social factors specific to their customers.
4 – Opting Out of a Down Payment.
Consumers often fixate on maximizing the amount of money that they have in pocket when evaluating a potential purchase. Unfortunately, based on the rapid depreciation of most vehicles, many consumers will find themselves currently owing more on a financed vehicle then the current value of the vehicle. Additionally, the larger the principal amount that is financed, the more that consumers will pay over the course of the financing period.
About the Author:
Sean Gray has a wide range of knowledge when it comes to cars. As of now he works for one of the best car buying company.
[Image credit: Flickr/John K]