Yep, getting a new set of wheels is one
of those wonderful sources of high-octane excitement -- but don't get too revved
up, Rover! The myriad decisions regarding car buying are ones you want to make
with a clear head.
"Car-buying is, or should be, a calculated
decision," notes John Mondin, an auto travel counselor with AAA. "It's
a major purchase."
So, before you go cuckoo for that coupe
or raving for that roadster, consider these top 10 mistakes car buyers make --
before you have the "showdown
in the showroom."
1. Ignoring your needs.
To paraphrase the immortal words of Mick Jagger, you can't always
get what you want, but at least in the realm of cars, you're much
better off with what you need. Sure, SUVs are all the rage, but
do you need one to drive the mile and a half to bingo every Sunday?
Is that racy red sports car really the best choice for your family-of-five-kids-and-growing?
"Don't let a mid-life crisis guide your decision,"
cautions Mondin.
"Getting a spiffy new sports or status car may
give the buyer an immediate lift," adds Miriam Biddelman, a
private-practice psychotherapist. "But while the lift may not
last, the bills surely do. This is not a good path to go down."
2. Showing your hand.
"This is a business transaction," points out Paul Calisi,
president of the AAA of New York's Auto Buying Program. "If you
fall in love with a car, be sure not to overreact and get too anxious.
Give yourself some time to sit back and make sure it's the car for
you." In short, don't let your heart rule your head -- it can
lead to aching in both body parts. Also, keep a grasp on reality.
If you can afford $20,000 and the object of your affection lists for
$30,000, you might be able to negotiate it down to, say, $27,000;
but there's no way you're going to be able to buy it for $20,000 unless
there's a $7,000 rebate.
3. Bad research and no research.
Buying a car is not rocket science, but you could compare
it to a high school term paper. To do it right, you've got some
homework ahead of you. The good news is that with the advent of
the Internet, a world of information -- never available to our parents
and grandparents -- is just a click away. And usually for free.
Resources such as Kelley
Blue Book, Edmunds.com
and Autobytel.com
provide tons of information on pricing, rebates, holdback incentives,
options, packages, interest rates, negotiating techniques, reviews,
forums and much more. Walking onto a dealer's lot with no information
is like walking into the lion's den. And relying on a dealer for
information is just slightly better.
4. Picking the most conveniently
located dealership. No, they're not all the same -- not even
for the same exact 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 Better Business Bureau," points out Mondin. Find the
BBB
on the Web.
5. 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.
6. 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 in your old car all cruddy and dirty,
the appraiser will rightly assume you don't put much value on it
yourself.
7. Not shopping interest rates.
Too many car buyers ignore the importance of shopping interest rates,
apparently thinking that if the payment fit into their monthly budget
okay, 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.
8. One-stop shopping at the
dealership. The big advantage to doing that 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.
9. 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 1-800-JOIN-AAA.
10. Thinking it's over before
it's over: Or, in the case of car buying, it ain't over 'til
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 door.
-- Updated: Jan. 20, 2005
