Buying a Car for the First Time? Avoid These 7 Common Mistakes
If you are looking forward to buying a car, naturally you are excited. However, it is also a serious financial commitment and involves a lot of critical aspects. You need to verify a lot of variables to ensure that you get the best possible deal.
Take a look at these 7 common mistakes most car buyers do so that you don’t end up doing any of them yourself.
Not Doing a Thorough Research
Thorough research initially will save you a lot of trouble later. The internet can be a very valuable resource for learning about a lot of important things for your car shopping. You can find unbiased reviews of your dream car, compare the deals, understand which features are actually worthy, know the trade-in value, explore flexible financing options, learn in-depth about the specifications and much more. The better you are equipped with information beforehand, the smarter you will shop.
Not Considering Other Financing Options
A majority of people are guilty of making the mistake of taking a financing option straight away from their car dealership without even thinking about alternative options. The salesman at your dealership is bound to try and convince you that they are offering the best car loan options available in the market.
However, do not make the mistake of choosing them without exploring other loan options. Nowadays, you can easily get a loan with flexible repayment options. Even if you are buying a secondhand car, there are trusted companies which offer a personal line of credit for buying a used car with a convenient repayment module.
Sticking to a Single Dealership
Don’t shy away from checking out multiple dealerships before making the final choice. Let the dealerships know that you are keeping your options open. It is important for you to know that you are comfortable doing a deal with that dealership and don’t feel pressured to buy from them. You can even do this online.
Check out the different deals available at the local dealerships. You can also ask for prices through quote request systems. This can help you get the car of your dreams at a great price.
Focusing on Monthly Payment and Not the Purchase Price
A monthly payment module breaks down the actual price and hence appears more attractive. However, focusing only on them can make you overlook your budget. It also gives the dealer a chance to sell you several add-ons which you don’t need. Not losing the sight of that specific entire purchase price can help you stick to your budget.
Ignoring Associated Costs
Don’t get sold on the tag price and ignore the long-term associated costs of owning and maintaining a car. Most people have no idea or simply tend to ignore the related costs such as fuel, auto insurance, service charges etc.
Factor in the fuel costs, insurance costs, maintenance charges etc., within your budget itself. Do your research about these associated costs in context with your shortlisted car models. It only takes a few minutes and saves you a lot of money in the long run.
Overlooking the Budget
You may be excited to buy your first car and hence you are bound to go overboard with your expectations. However, it is extremely important to have a budget and to stick to it throughout the buying process. The budget for your car should be applied to both – the tag price and the monthly payments if you are choosing a car loan.
Overlooking the budget even by a small amount can turn into a huge dent in your pocket over the next few months after you have made the purchase. Prioritize the features that you need. Match them with your budget and then decide whether or not you can afford to throw in some of the features that you want.
Skipping the Test Drives
Even if you may have done extensive research, do not buy the car based solely on the reviews and photographs online. Test drives are a surefire way of knowing whether the car is right for you or not. Before you hand over your hard-earned money, make sure you test drive that car. Test it out on different road surfaces and varied traffic conditions.
Even a brief test drive will tell you a lot about the car which no amount of online research can. So whether you are buying the car from a dealership or a private sale, do not skip the test drives.
Consider yourself forearmed, if you are forewarned. Whether you are buying a new car or a secondhand car, you know which mistakes to avoid.
Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India's first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life's mission to help and educate people on various financial topics, so email him your questions at email@example.com.