5 Mistakes You Should Avoid When Buying a New Car

Buying a car can be both exciting and stressful at the same time. Sure, you get to upgrade your ride, but you also have to deal with car shopping, aggressive sales tactics, and negotiating a good deal. It’s a lot, and if you rush the process, you could end up with a car you don’t love or a loan that leaves you overpaying.

Most car-buying regrets stem from a few common mistakes. Let’s break them down so you’ll know what not to do when buying a car, and what you should be doing instead! This will help you find the right car at the best price, and with loan terms that fit your budget.

Before you step onto a car lot or browse listings online, it’s important to know what you want in a vehicle. If you buy a car without doing some comparison shopping, you might not get the safety features you want. Another dealer might also have a lower sticker price or offer other brands.

With any new or used car purchase, you must research your options. Start by checking J.D. Power and Consumer Reports to see which brands are most reliable. The less you have to spend on repairs, the more you’ll have for other needs.

Also, consider the total cost of ownership, including the fuel economy and insurance. Many hybrid vehicles get 40-50 mpg, and some electric vehicles (EVs) get the equivalent of more than 100 mpg. Luxury cars, sports cars, and EVs are typically the most expensive to insure, while small cars usually have the lowest insurance costs.

Many car dealerships offer car financing, but it’s not always the best deal. Their interest rates are often higher than what banks and credit unions offer. If you don’t get preapproved for a car loan before you start shopping, you may have to go with the dealership financing, which could cost you more.

Loan preapproval is when a lender does a preliminary review of your finances and gives you an estimate of how much you qualify to borrow and the interest rate. It helps you narrow your choices, and it can also strengthen your negotiating position. With preapproval, salespeople will treat you like a cash buyer, which means you can negotiate the purchase price instead of focusing only on the monthly payment. 

Credit Unions, like Bowater Credit Union, can save you money. They typically offer the lowest car loan rates because they are nonprofit organizations. They also provide more personalized service to help you find the best loan option for your needs.

If you plan to sell or trade your current car, you’ll need to know what it’s worth. The higher your trade-in value, the more you can negotiate off the bottom line of the vehicle you’re buying. Websites like Kelley Blue Book and Edmunds can help you check current car prices for your make and model.

Another option is to sell your vehicle instead of using it as a trade-in. Many dealerships will buy your car, but you may get more by selling it to a private buyer. You can list your car on local buy-and-sell sites to reach more buyers in your area.

Many salespeople try to sell additional items like fabric protection, wheel locks, paint protection, and extended warranties to increase the profit over what the dealer paid. These extras can increase your total cost and car payment. You have a right to decline any add-ons you don’t want. 

If you do want any dealership extras, consider purchasing them from other businesses. Dealerships may charge more for these products and services than what you’d pay elsewhere. You might find them for less at independent shops, auto detailers, and third-party warranty companies. Taking a little time to compare costs could help you save hundreds, or even thousands, of dollars.

When you sign on the dotted line after test driving and negotiating, you should feel confident that you got a good deal. A bad deal not only leaves you frustrated, but it can also lead to higher monthly payments.

You don’t have to say yes to any deal. If you don’t like what you’re being offered, simply walk away. Saying no to protect your finances isn’t rude. A salesperson might offer a better deal if they think they are about to lose a sale, or you might find a better one somewhere else. 

Dealerships typically get new inventory every 30 to 60 days, which is why you shouldn’t fall in love with any car. New opportunities come along all the time.

Taking your time when buying a car helps you find the best fit for your needs at a great price. It also ensures that you get the right financing to lower your payments and save on the total cost.

This checklist can help you stay on track as you navigate the process:

• • Research reliable brands and models
  • Get preapproved for a loan from a credit union
  • Know the trade-in value of your current vehicle
  • Decline add-ons you don’t want
  • Compare prices from multiple dealerships
  • Check your credit score and correct any errors
  • Test drive multiple cars
  • Review the vehicle history report for used cars
  • Have a used car inspected by a mechanic
  • Read the purchase contract carefully before signing anything
  • Take your time and avoid pressure to buy immediately
  • Walk away if the deal doesn’t feel right

Ready to buy your next new or used car? 

At Bowater Credit Union, our competitive rates are often lower than those at dealerships and banks, and our flexible terms can help you get payments that work for your budget. Our friendly team is here to help every step of the way. 

Get preapproved today — and shop for your next car with confidence.