|Top 10 car-buying mistakes
Picking the most conveniently located dealership.
No, they're not all the same -- not even for the exact
same makes and models. Ask around -- learn from friends'
experiences. Also, determine your seller's C.S.I. (Customer
Service Index), which is a ranking generally maintained
by automakers for the dealerships that sell their vehicles.
The C.S.I. is a reflection of how well an individual
dealer satisfies its customers both in terms of sales
and service. "You can also check dealerships with the
Business Bureau," says Mondin.
Going by payment rather than price.
This is an
easy mistake to make, since most of us budget, and therefore
think, in terms of monthly figures rather than going
by grand totals -- and gee, paying only $400 per month
sure sounds better than, say, $500, even if the car
payments do drag on a bit longer with the former. But
you've done yourself no favor in getting the dealer
to agree to the lower figure. Why? Because the dragged-out
loan means more interest charges for you -- and more
profit for the seller. In short, keep an eye on the
long-term total, not just the monthly payouts.
Prematurely talking trade-in.
This is another
easy trap to fall into because dealers love to play
the trade-in game. Don't let them muddy the waters:
Negotiate a satisfactory price for the car, then bring
up your trade-in. Another thought: If you bring your
old car in all cruddy and dirty, the appraiser will
rightly assume you don't put much value on it yourself.
Not shopping interest rates.
Too many car buyers
ignore the importance of shopping interest rates, apparently
thinking that if the payment fits into their monthly
budget OK, it must be all right. But unless you have
excellent credit, you're most likely better off getting
your financing elsewhere. The little differences in
the numbers can be huge. Consider this: $20,000 financed
over five years at 3.9 percent costs $2,045.80 in interest.
The same deal at 7.9 percent costs $4,272.20 -- a difference
of more than $2,226.
One-stop shopping at the dealership.
advantage to doing this is convenience -- but in terms
of financing, if you shop around via local banks, credit
unions and other lenders, you may well get yourself
a better deal.
Other things you should shop around for:
various add-ons and accessories. Don't buy more than
you need, and for what you do want, consider other sources.
But before you get too bare-bones about it, remember
that some safety options -- such as anti-lock brakes
and side-impact airbags -- can reduce insurance costs,
a major consideration.
Going it alone when you can use a helping hand.
If hassles give you headaches
and negotiations make you nauseated,
turn it over to a higher (horse)
power. For example, the AAA
Endorsed Auto Buying Program
nets members special pricing
through authorized dealers.
To learn more, log onto aaa.com;
or become a member by calling
Thinking it's over before it's over.
Or, in the
case of car buying, it ain't over till the business
manager sings. You may think you bought your car once
the sales manager shakes your hand and tells you what
a great deal you got. But beware the business office,
often called the finance and insurance office. Dealers
often make as much money in this room as they do on
the showroom floor. Insurance, dealer add-ons, extra
fees and interest rate changes are among the common
ploys you could get clobbered with on your way out the