Buying a car, whether it is new or used, is a significant decision. Cars require a long-term financial commitment, and it is important to avoid making mistakes that could have negative financial consequences. Here are five mistakes to avoid when purchasing a new car:
- Failing to conduct research: It is crucial to research and understand the current car-buying market. This includes considering factors such as pricing, inventory, and timing. Having this information will enable you to budget and plan the process more effectively. Sometimes, it may be beneficial to wait for a better opportunity.
- Not getting preapproved for a loan: Being preapproved for a loan has several advantages. It allows you to know the loan amount you qualify for and the interest rate you will be paying. Additionally, it demonstrates to the salesperson that you are serious about your purchase. Being preapproved removes the pressure and stress of negotiating financing contracts at the dealership. To avoid higher interest rates, it is advisable to research loans at credit unions, as they are non-profit organizations that serve their community.
- Not knowing the value of your current car: If you plan to sell or trade your current car, it is essential to know its current value. This knowledge will help you get the most money out of it and prevent being taken advantage of. Kelly Blue Book is a great resource for determining the trade-in value of your car. Another option is to sell your vehicle at a different dealership than the one you plan to buy from, as this can potentially maximize your profit. You can also obtain quotes from CarMax and Carvana to negotiate the price of your current vehicle.
- Purchasing unnecessary extras: Salespeople often try to sell additional items such as fabric protection, wheel locks, paint protection, and extended warranties. These extras are not essential, and you have the right to decline them. To avoid this, you can request the out-the-door price, which includes all costs.
- Being afraid to say no: You are not obligated to accept the first offer you receive. If you are not satisfied with the deal being offered, you can simply walk away. Conducting thorough research and shopping around will put you in a better position to negotiate a more favorable deal.