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Despite the wide-ranging knowledge that's available these days to help car buyers be more savvy and better able to strike the best deal -- whether they're
shopping new or used -- most shoppers still make some basic
mistakes that cost them money.
Part of the problem is that unlike most other purchases, buying a car is often an emotional rather
than a rational decision -- someone gets what is sometimes called "new car fever,'' and it can't be quenched until
the old set of wheels is replaced by something that's shinier and sexier.
In other instances, the car purchase becomes an unexpected imperative because the old set of wheels
has conked out, has been smashed in a crash or has been stolen.
There's no way to avoid the last-minute need for a new car, but you can avoid common mistakes many
buyers make.
If you do no other research before setting out to shop -- and you should do a lot more, such
as checking price guides, car reviews and your credit score -- avoiding these six mistakes will help keep you out of
car-buying trouble:
1. Thinking only of the deal. When most shoppers think about what they
want to pay, they think only of the final negotiated price, which usually doesn't take into account such things as
taxes and license fees. In many states, the taxes alone can add several thousand dollars to the cost of a vehicle.
By the time these fees come into play, some shoppers feel they're too committed and wind up paying more than they
wanted.
2. Not making a large enough down payment. The biggest complaint people
have after they buy a car is how little equity they have and how long it takes before they are no longer "upside down"
on their loan. There once was a time, before zero-down deals, when 10 percent and 20 percent down payments were normal.
To avoid the pitfalls of being buried in your car loan, put more down, either through a trade-in or cash.
3. Letting your guard down. Most buyers relax once the deal is struck with
the salesperson. But a dealership makes most of its money after the sale, when the finance person takes over and pushes
higher-interest loans or expensive extended warranties. Bargain just as hard after the initial price is set.
4. Deciding too quickly. Despite the expense of a car transaction, most
people rush through the process, either falling prey to that "new car fever" or the sales pitch that this deal is only
good right now. Don't believe it. The deal will be there tomorrow, and it may get better if the salesperson believes
you're bargaining hard. Take 24 hours to cool down and look at the deal in a less-pressured environment.
5. Not knowing what you want. It may seem hard to believe, but some surveys
suggest that car buyers often start out with only a vague idea of what they want or need in a new or used car. That
attitude puts the power in the hands of the salesperson, who can then steer you toward the vehicle that puts the most
money in the dealer's pocket as opposed to what's right for you. Think critically of your transportation needs and try
not to buy more vehicle than you need or can afford.
6. Getting too focused on the monthly payment. Even if you have scoped out
a budget and know you can pay, say, $500 a month, don't go shopping with that figure in mind. Unless you're the most
tight-lipped person in the showroom, you'll eventually let slip that $500 is your target number and, like magic, the
salesperson will come up with a deal that exactly matches your number. Lost in that shuffle will be such critical
things like the term of the loan and value for your trade.
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